DENIED: April 28, 2008

Agency decision

Ask Donna

What actually matters in this document.

Text

CBCA 385

MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY

and THE CITY OF MINNEAPOLIS,

Appellants,

GENERAL SERVICES ADMINISTRATION,

Respondent.

Lawrence A. Moloney of Southern Minnesota Regional Legal Services, Inc., Saint

Paul, MN, counsel for Appellant.

Robert C. Smith, Office of General Counsel, General Services Administration,

Washington, DC; and Paul J. Maxse, Office of Regional Counsel, General Services

Administration, Chicago, IL, counsel for Respondent.

Before Board Judges BORWICK, DeGRAFF, and GOODMAN.

DeGRAFF, Board Judge.

“Most of the disputes in the world arise from words.” Morgan v. Jones, (1773)

98 Eng. Rep. 587, 596 (K.B.). As the appeal pending before us shows, words are no less

troublesome in the contract disputes of today than they were when Lord Mansfield, Chief

Justice was developing common law to govern commercial transactions.

In March 1993, the General Services Administration (GSA) entered into a

Development Agreement with the City of Minneapolis (the City) and the Minneapolis

CBCA 385

Community Development Agency (MCDA). The Development Agreement explained that

MCDA would assemble a development site, remediate environmental contamination on the

property, and convey the property to GSA in late November 1993. After the conveyance,

GSA would select a contractor to design and build a courthouse and an underground parking

garage on the site. When the parties entered into their agreement, they knew the site was

contaminated with petroleum hydrocarbons.

MCDA did not finish remediating the environmental contamination at the site by the

end of November 1993, which led the parties to amend the Development Agreement in

January 1994. The amended Development Agreement said GSA would modify the

design/build contract to require the contractor to develop an environmental contamination

remediation plan and MCDA would pay the cost of the modification.

In June 1994, MCDA told GSA it would not pay for a remediation plan based upon

either of the two concepts developed by the design/build contractor, and an MCDA

consultant subsequently developed a remediation plan. In August 1994, GSA asked the

design/build contractor to prepare a proposal to modify the contract to include the work

required by MCDA’s consultant’s plan, which it did. In September 1994, GSA and the

design/build contractor reached a negotiated agreement regarding the price of the contract

modification and MCDA deposited $2,420,295 with GSA to pay the cost of the

modification. Part of the cost of the modification included costs caused by delays to the

design/build contractor’s progress which caused a ninety-day delay to the contract

completion date.

In April 1999, MCDA and the City sent the contracting officer a certified claim for

$2,693,055.50, alleging GSA had breached the parties’ agreement by adopting a remediation

plan which exceeded the scope of the required remediation, by failing to allow the City and

MCDA to consult with the design/build contractor during the development of foundation

design plans, and by not limiting the cost of the project. The City and MCDA also said they

were not responsible for any of the delay to the completion of the construction of the project

or costs related to the delay. Appellants did not identify any differences, for purposes of this

claim, between the rights and obligations of the City and those of MCDA.

The contracting officer denied the claim and this appeal followed. The Board held

a hearing in May 2007, and the parties finished their briefing in January 2008.

CBCA 385

Findings of Fact

The parties sign a memorandum of understanding, discover environmental

contamination, and draft a development agreement

In 1990, GSA began the process of selecting a site for a new courthouse in

Minneapolis, Minnesota, and part of this process involved discussions between GSA and

MCDA. Appeal File, Exhibits 1, 2.1 In November 1990, MCDA drafted a memorandum

of understanding which said MCDA would acquire a site and convey it to GSA at no cost.

The parties realized the cost of the project would exceed the amount of federal funds

available, and the draft memorandum said MCDA would provide funds, referred to as its

project obligation, to help defray the project’s cost. The draft also said MCDA would not

make any warranties or representations regarding environmental conditions at the site.

Exhibit 2.

The proposed project site was one city block square. The Flour Exchange Building

was located in the northeast corner of the block. To the west of the Flour Exchange

Building was a parking garage which was used by the City. Within the basement of the

garage were two underground fuel storage tanks. To the west of the Flour Exchange

Building and to the north of the City garage was one additional underground fuel storage

tank. Two more underground tanks were located in the southwest part of the site, under the

Court Park parking garage, which was a privately-owned parking garage. The remainder

of the site contained a surface parking lot and a three-story brick building. In order for the

proposed project to be constructed, the block would have to be cleared of all existing

structures except the Flour Exchange Building. Exhibits 2, 8, 37; Transcript at 19-20.

In April 1991, MCDA met with STS Consultants (STS) regarding the proposed site

and STS gave MCDA a proposal for providing geotechnical engineering services for the

project. The services were to include subsurface exploration and evaluation of the

foundation bearing soils, and providing recommendations for foundation design and

constructability of the project. STS said that because of the potential for petroleum leakage

from underground storage tanks, all soil samples would be screened for the presence of

petroleum hydrocarbons. Exhibit 6. STS is a firm with extensive experience in dealing with

petroleum contamination and had an existing contractual relationship with MCDA to deal

with contamination issues. Transcript at 14.

All exhibits are found in the appeal file, unless otherwise noted.

CBCA 385

The parties signed the final version of the memorandum of understanding in May

1991. The memorandum explained the parties intended to enter into a binding Development

Agreement, and said the estimated date for MCDA to convey the property to GSA was

January 1, 1993. Exhibits 7, 9.

In June 1991, STS sent its subsurface exploration report to MCDA, and MCDA

provided the report to GSA. STS made nine soil borings in the course of its exploration.

Although a complete copy of the report is not contained in our record, the portion we have

shows STS found groundwater and possible soil contamination due to the presence of

gasoline. In addition, the report mentions the presence of several petroleum storage tanks.

Exhibits 8, 51 at 816.

MCDA prepared a draft Development Agreement and gave it to GSA in early July

1991. According to this draft, GSA, MCDA, and the City were aware of the existence of

a gasoline release on the site and MCDA, would be responsible for remediating this

condition. The draft said GSA’s obligation to accept conveyance of the property would be

conditioned upon review and approval by GSA of environmental conditions, among other

things, and established times within which GSA would have to make any objections to such

conditions. If MCDA could not cure the objectionable conditions, GSA could terminate the

agreement, waive its objections, or accept conveyance of the property. If GSA accepted the

property, the draft said the amount of money needed to cure the conditions would be taken

into consideration when determining the amount of MCDA’s project obligation. The draft

Development Agreement said MCDA would not make any warranties or representations

regarding environmental conditions at the site, except to disclose any actual knowledge it

had of such conditions. Exhibit 9.

In mid-September 1991, GSA supplied MCDA with its proposed changes to the draft

Development Agreement. Exhibit 12. Among other things, GSA wanted to include

language which said that before MCDA conveyed the property to GSA, MCDA would

ensure remediation of “any and all” environmental hazards and which also said such hazards

included, but were not limited to, gasoline and other hydrocarbon leaks discovered during

initial soil testing. Also, GSA wanted the agreement to provide that if GSA objected to

conditions which MCDA could not cure within ninety days, GSA could decide to accept

conveyance of the property if the amount required to correct the condition was added to

MCDA’s project obligation. Exhibit 12 at 290.

By the end of December 1991, the parties had agreed upon several additions to the

text of the draft agreement. MCDA acknowledged the existence of an adverse

environmental condition consisting of a release of gasoline and/or other hydrocarbons.

MCDA said before it conveyed the property to GSA, it would assure remediation of this and

CBCA 385

any other adverse environmental condition “theretofore identified” by GSA. Also, at closing

MCDA would deliver an agreement to hold GSA harmless from liability in connection with

the existence or remediation of such conditions. Exhibit 14.

STS completes its remedial investigation and corrective action design

On June 12, 1992, STS provided MCDA with the results of its remedial investigation

of the building site. In order to prepare this report, STS made eight additional soil borings

in January and February 1992. The results of the investigation showed the presence of

petroleum-impacted soils and groundwater perched on a clay layer above bedrock. STS said

the affected area appeared to be limited to the northeast part of the site. STS’s report

included a diagram of the contour of the groundwater. STS recommended removing the

underground storage tanks, as well as treating the petroleum-impacted soils and the

contaminated groundwater. Regarding affected soils, STS recommended excavating and

treating contaminated soil which had already been identified and which would be identified

when the storage tanks were removed. STS recommended stockpiling the excavated

affected soil, which it expected to be approximately 400 cubic yards, and transporting it to

a treatment facility. In addition, STS recommended installing a soil vapor extraction system

to remove petroleum vapors from affected soil which remained at the site. Regarding

affected groundwater, STS recommended creating a collection sump and installing a

pumping system to remove the groundwater from the saturated sands. The extracted

groundwater would then be pumped to treatment equipment. The proposed treatment

equipment could involve transporting the groundwater to an approved disposal location,

using charcoal filters to remove the contaminants on site, or using an air stripper equipped

with a charcoal filter to remove contaminants from a discharge stack. STS’s

recommendations were contingent upon gaining access to the site after demolition of the

existing structures on the property, when excavation could begin. Exhibits 18, 51 at 816.

MCDA provided the STS report to GSA in early July 1992. Exhibit 506.

On October 19, 1992, STS gave MCDA its corrective action design for the project

site. Exhibit 19. The ongoing operation of the City parking garage limited the area which

STS could affect with its design. Transcript at 23-24. STS decided it was not feasible to

remove and treat all of the affected soils. Also, STS decided bioremediation would not be

the most cost-effective treatment method when taking into account the physical constraints

at the site. Exhibit 20. Bioremediation is the process by which, over time, petroleum

contamination is broken down by naturally-occurring bacteria in the soil, which are

sometimes assisted by the introduction of additional oxygen and nitrogen. Transcript at 44

45. The process requires that the site conditions allow some control over factors such as

moisture, nutrients, soil chemistry, and permeability. Exhibit 19.

CBCA 385

STS’s design included a soil vapor extraction system to remediate the soil on the site.

The soil vapor extraction system consisted of wells which would be used to pull air and

volatilized petroleum compounds through the contaminated soil. STS said this system

would “remove residual vapors from the soil so that when the groundwater treatment is

complete, no residual compounds will be contained within the soil.” To remediate the

groundwater at the site, STS’s design included a groundwater sparging, extraction, and

treatment system. Exhibit 19 at 426. STS determined the majority of contaminants at the

site were in the groundwater and the extraction system consisted of wells from which

contaminated groundwater would be pumped. Groundwater extraction would be the primary

means of contaminant removal at the site. The groundwater sparging system consisted of

wells through which air would be forced into the contaminated soil below the contaminated

groundwater. Sparging would be used as a form of treatment for the groundwater if the

recovery rates at the extraction wells were limited and also used as a means of pretreating

extracted water. STS proposed to install its system in the basement level of the existing City

garage at the site, to operate the system for approximately four months, to remove it when

demolition began, and to reinstall the system after demolition if remediation was not

completed. The estimated cost of this system was approximately $51,000. Exhibit 19;

Transcript at 223-24.

A few days later, MCDA provided STS’s corrective action design to the Minnesota

Pollution Control Agency (MPCA). Exhibit 20. MPCA reviewed the STS reports and

recommendations, and approved the corrective action design with modifications and

comments on February 22, 1993. MPCA said the full extent of soil contamination and

groundwater within the perched aquifer had not been fully determined, and additional work

would be required by MCDA in order to determine the full lateral and vertical extent of the

groundwater. MPCA also provided specific guidance as to cleanup goals and monitoring

requirements. MPCA understood a final design for the new courthouse had not yet been

selected, and knew the design could determine the amount of soil excavation which would

be required. MPCA said it appeared STS’s proposed corrective action design would be used

“at least as a temporary remediation effort depending upon the final outcome of the building

design process.” Based upon conversations with STS, MPCA said it appeared that

excavation to bedrock might be necessary. If so, MPCA said it would ask that the clay

deposit on top of the bedrock not be excavated because the clay acted as a barrier to the

migration of petroleum contamination. Also, deep excavation could require dewatering of

contaminated groundwater. MPCA cautioned that if deep basements were to be constructed,

“the potential for migration of petroleum vapors into these deep structures should be

considered in the building design” because the contaminated clay deposit would remain at

the site. Exhibit 21.

CBCA 385

MPCA also said its approval of the corrective action design qualified MCDA’s

cleanup costs to be eligible for reimbursement from the Minnesota Petroleum

Reimbursement Fund (the Petrofund). Exhibit 21; Transcript at 43. The Petrofund was

established by the state in the mid-1980s to reimburse owners of underground storage tanks

for the cost of cleaning up their sites. In the beginning of the program, MPCA required the

near-total cleanup of contaminated sites. As time went on, however, MPCA became the

owner of orphaned contaminated sites and it became much more aware of the cost of total

remediation. As a result, it began to allow some contaminants to remain in place if there

would be no affect upon future users of the groundwater or the soils. MPCA realized that

instead of spending hundreds of thousands of dollars to remediate a site, it could allow

bioremediation to occur over a period of time. Transcript at 43-44.

GSA issues a request for proposals and the parties sign the Development Agreement

On November 27, 1992, GSA issued a request for proposals (RFP) for designing and

constructing the project. The deadline for submitting a proposal was February 16, 1993.

Exhibits 25 at 613, 46 at K-1.

GSA, MCDA, and the City entered into the Development Agreement on March 19,

1993. The agreement said that after remediation of environmental conditions, MCDA would

convey title to the project site property to GSA. The project to be designed and built by the

GSA contractor would include a courthouse with an underground parking garage and a

second underground parking garage beneath a public plaza. GSA would lease the second

garage to the City for operation as a municipal parking garage. Approximately $90 million

in federal funds and $9.6 million in MCDA funds (the project obligation) would be used for

the project. Exhibit 22.

The Development Agreement said GSA, MCDA, and the City were “aware of the

existence of petroleum hydrocarbons on the Property, the remediation of which for all

purposes of this Agreement shall be the responsibility of MCDA.” Exhibit 22 at 468, 470

71. Section 4.03 of the agreement said the extent of GSA’s obligation to accept conveyance

of the property was conditioned upon GSA’s review and approval of, among other things,

environmental matters and conditions. After the agreement was signed, MCDA was to carry

out at its expense soil, environmental, and other tests as MCDA and GSA deemed

reasonably necessary. The agreement explained how the parties would proceed if GSA

objected to any of the test results. Exhibit 22 at 477. MCDA agreed to clear the property

of all structures and improvements and to convey it to GSA “ready for commencement of

construction of the Project.” Exhibit 22 at 478, 589-90.

CBCA 385

Section 4.03(b)(iv) of the Development Agreement provided:

The MCDA acknowledges the existence on the Property as of the date of this

Agreement of an adverse environmental condition consisting of petroleum

hydrocarbons discovered in the course of initial soil testing. Prior to

conveyance of the Property to GSA the MCDA shall assure remediation of all

adverse environmental conditions theretofore identified by MCDA, the City

or GSA. At closing the MCDA will deliver an undertaking to hold harmless

and defend GSA from liability in connection with the existence or remediation

of adverse environmental conditions theretofore identified by MCDA, the City

or GSA.

Exhibit 22 at 479.

Section 8.04 read as follows:

Cost Containment. GSA’s mission is to provide quality space in a timely

manner and to ensure the best value to the government and the public. GSA

will strive to maximize the efficiency and effectiveness of its procurement

process in order to deliver the greatest value to the public and minimize the

construction cost. This concern shapes GSA actions throughout the

procurement, construction and operation of a Federal facility. GSA will

solicit the assistance of MCDA and the city in cooperative efforts to minimize

Project and Plaza Garage costs, and thereby GSA, MCDA and City

expenditures, throughout the life of the Project and Plaza Garage.

Exhibit 22 at 498.

The Development Agreement contained a timetable which contained estimated dates

for upcoming events, such as the beginning of demolition activities and the receipt of best

and final offers (September 1, 1993), closing the conveyance of the property to GSA

(November 23, 1993), award of the design/build contract (December 15, 1993), and

completion of the project (June 15, 1996). Exhibit 22 at 537.

STS’s corrective action design is implemented and the remediation effort begins

In March or April 1993, STS made another exploration of the site and drilled four

additional borings. Exhibit 51 at 817. The STS system for remediating conditions at the site

was put in place by a well drilling company in April and began operating in mid-May 1993.

Exhibit 28 at 645. The system contained four drilled wells. Three of the wells were to be

CBCA 385

used for the combined tasks of vapor extraction, air sparging, and groundwater extraction,

and one well was to be used for vapor extraction and air sparging. The system also

contained pumps, a blower, a compressor, a groundwater treatment vessel, and an electrical

control system. Exhibit 28 at 639-42. When STS designed and installed this system, it did

not know the Development Agreement called for MCDA to convey the site to GSA in

November 1993. Transcript at 102.

At the end of June, in accordance with the Development Agreement, GSA noted its

objections to the presence of the underground storage tanks and the presence of gasoline and

soil contamination due to leaks from the tanks. Exhibit 23. In early August, MCDA

responded to GSA’s objections and said the tanks would be removed as part of MCDA’s

site clearance activities in September. MCDA also told GSA of MPCA’s approval of the

STS corrective action design. In addition, MCDA said it expected the corrective action

being taken would be completed by the closing date. Exhibit 26.

In late September 1993, the STS remediation system was removed to make way for

demolition of existing structures on the site. One underground storage tank was removed

from the site on October 15. Exhibits 35, 37 at 676. In a supplemental report dated

October 21, STS recommended the system be reinstalled after demolition was complete

because its analysis of groundwater showed its contamination had not been sufficiently

remediated when the system was removed. Exhibit 28 at 649-50.

In mid-October, MCDA asked GSA if it intended to award the design/build contract

on December 15, as scheduled in the Development Agreement. If GSA planned to delay the

award of the contract, MCDA wanted to delay the conveyance of the property to GSA,

which was supposed to occur in late November. MCDA said it was in the process of

evaluating the results of its remediation efforts and might require added time to clean up the

site to MPCA’s standards. Exhibit 27.

In response, GSA expressed its concerns to MCDA about the timing of the pollution

remediation effort. GSA explained it could not award the design/build contract before it had

title to the property, and could not take title to the property until the adverse environmental

conditions were remediated. Also, GSA noted that closing the conveyance of the property

was supposed to occur fifteen days prior to contract award, which was scheduled for

December 20. GSA said it needed to resolve this issue as soon as possible, because it might

affect GSA’s ability to award the design/build contract on schedule. Finally, GSA asked

MCDA when it anticipated completing the remediation work. Exhibit 30.

GSA spoke with MCDA about these concerns on November 8, and again on

November 10. Exhibits 30, 509. On November 10, GSA said MCDA’s suggestion to delay

CBCA 385

the closing date was an unworkable alternative because it would seriously affect the

project’s schedule. GSA said it had worked to keep the project on schedule and asked

MCDA to expedite the remaining demolition and remediation work and do whatever it

needed to do in order to convey the property to GSA at the end of November. MCDA said

it would have additional information about the remediation efforts at the end of the

following week, and GSA asked MCDA to share its information with GSA. GSA

emphasized the importance of receiving a clean site in accordance with the Development

Agreement. Exhibit 509.

Two underground storage tanks were removed from the site on November 11, 1993.

Although the soil appeared to be clean, it emitted a rather strong odor of petroleum when

it was disturbed. The depth of soil contamination was considerably greater than GSA’s

architect had been led to believe by MCDA in a conversation the previous week. GSA’s

architect was The Leonard Parker Associates (TLPA), which provided GSA with design and

construction quality management services for the project. Exhibits 29, 31; Transcript at 342.

STS said remediation would be completed thirty to sixty days after November 23, which was

apparently when it anticipated reinstalling its system. The remaining underground storage

tanks were scheduled to be removed on November 15. Exhibits 31, 537.

On November 15, 1993, MCDA, MPCA, STS, the demolition contractor, and the

well drilling contractor met to discuss the reinstallation of the remediation system. They

decided to install several new system components, including a soil vapor extraction intercept

trench to capture the off-site migration of petroleum vapors and nineteen air sparging points

to force air into the groundwater. In addition, the initial STS plan was to excavate all of the

contaminated soil around two underground storage tanks in the southwest part of the site.

However, when the tanks were removed, all of the contaminated soil could not be removed

without collapse of the adjacent street and sidewalk. Therefore, STS planned to install the

soil vapor extraction system to treat the soil which could not be removed. Also, accessible

contaminated soils above the water table were to be excavated, a forced air system was to

be put in place to treat contaminated soil which had been excavated, and a large-diameter

groundwater extraction well was to be installed. Due to a threat of litigation by the Flour

Exchange Building, no groundwater had been extracted since demolition had begun.

Exhibit 37 at 681-87; Transcript at 41.

Demolition work on the site was completed on November 19, 1993. On

November 24, STS reinstalled the venting and air sparging system, with the additions and

modifications discussed on November 15. Exhibit 537; Transcript at 48-49. Because

MPCA had attended the November 15 meeting, because MPCA typically takes months to

approve a remediation plan, and because STS understood MCDA wanted to maximize the

amount of remediation at the site before it was conveyed to GSA, STS did not seek MPCA’s

CBCA 385

formal approval for the additions and modifications to the remediation system. Transcript

at 49. STS did not believe it needed to obtain MPCA’s approval at this time. Transcript at

54-55.

On November 23, the day before STS reinstalled its system, GSA, MCDA, and

MPCA representatives participated in a conference call to discuss remediation. In a letter

sent to MCDA the next day, GSA said it had serious concerns regarding MCDA’s efforts

to fulfill its Development Agreement obligations. During the conference call, GSA

understood MCDA and MPCA to suggest it was GSA’s responsibility to remediate the

adverse conditions before the property was conveyed to GSA. GSA disagreed and said the

suggestion was contrary to MCDA’s commitments to GSA. Until recently, GSA said, it

understood remediation efforts were moving forward and the property would be conveyed

to GSA at the end of November. GSA said it would not take title to the site in its current

condition and could not award a design/build contract before it had title and received the

financial contribution from the City and MCDA. GSA pointed out the lack of timely

remediation could jeopardize the design/build procurement. GSA said it was inappropriate

for MCDA to suggest GSA either assume responsibility for excavation or remediation of soil

and groundwater, or amend the RFP and place additional limitations or obligations upon

prospective design/build contractors. GSA said the RFP did not include restrictions on

excavation of the site and the entire site had to be available for development without any

restrictions on the depth of excavation or foundation work. GSA wanted the City and

MCDA to tell GSA what they intended to do to resolve the remediation issue. Exhibit 32.

An MCDA memorandum dated November 30, 1993, summarizes a discussion among

GSA, MPCA, and MCDA. In response to the RFP, some offerors proposed excavating the

entire site down to bedrock. MPCA said if there was no longer any contamination at the

site, there would be no problem with excavating the clay over the bedrock and removing the

groundwater, so long as MPCA approved the excavation method. In addition, caissons

drilled to bedrock would be acceptable if they were sealed. GSA said it had not provided

the STS corrective action design to offerors because it assumed MCDA would turn over a

clean site. However, MCDA understood GSA was considering making information

regarding the remediation effort available to offerors, reopening negotiations, and asking for

new best and final offers. MCDA proposed to continue soil and groundwater venting and

sparging, and said it expected to reach MPCA approval limits in two weeks. Exhibit 511.

On December 3, 1993, MCDA responded to GSA’s November 24 letter. MCDA said

it fully accepted its responsibility for remediation as required by the Development

Agreement. It also said completing the remediation of a petroleum release could take an

extended period of time if, as at the project site, groundwater was affected. MCDA

underscored that its obligation was to assure remediation was accomplished. MCDA said

CBCA 385

discussions among GSA, MCDA, and MPCA after November 24 appeared to have

established that a remediation plan could be in place which would have necessary water and

soil remediation activities completed off-site or in some other manner which would not

require GSA to amend the RFP. MCDA said it would bear the cost of such remediation

activities. Exhibit 35.

Representatives from GSA, MCDA, MPCA, STS, TLPA, and Sverdrup Corporation

(a consultant to TLPA) met on December 16 to discuss conditions at the site, remediation

efforts, and conveyance of the property to GSA. STS said it had excavated contaminated

soil which would have to be cleaned and taken to a disposal site. Soils above groundwater

could be treated within thirty to sixty days using the current STS system. However, soil in

contact with groundwater would continue to be affected. Between 250,000 and 1,000,000

gallons of groundwater on the site were near the Flour Exchange Building and pocketed

above the clay layer. STS was air sparging the water, but could not extract the water due to

a threatened suit by the Flour Exchange Building and this meant the remediation process was

going to take longer than expected. GSA was ready to award a contract and did not believe

offerors should have to pay for any additional design effort due to the current conditions at

the site. MCDA acknowledged that developing a remediation system after award would be

a change to the contract, and said it would pay for added costs caused by the change.

MCDA and GSA agreed that the Development Agreement would be amended to say GSA

would inform the design/build contract offerors that the contractor would be required, after

award, to design a remediation system together with GSA, MCDA, and MPCA. The cost

of designing the system and associated administrative costs would be borne by MCDA.

Exhibit 36.

On December 20, 1993, STS provided MCDA a report regarding the activities it had

undertaken at the project site during and immediately after demolition. The system

components mentioned on November 15 were in place and operating, except STS had not

been able to extract and treat groundwater. During installation of the remediation system

components, approximately 590 cubic yards of contaminated soil were removed in addition

to the approximately 160 cubic yards which were removed from around four of the storage

tanks. STS had recently made twenty-three additional soil borings, which showed there

were several small areas where contaminated soils remained in place. Exhibit 37.

GSA amends the RFP, the parties amend the Development Agreement, and MCDA

conveys the property to GSA

GSA issued amendment 12 to the RFP on December 21, 1993. The amendment said

GSA was reopening negotiations and established January 11, 1994, as the revised date for

best and final offers. The amendment said there were at least two areas of contamination

CBCA 385

at the site, explained the City and MCDA were working to remediate these problems, and

said the exact condition of the site would not be known at the time the design/build contract

was awarded. The amendment also said any further remediation efforts and/or additional

foundation work required to be performed by the design/build contractor would be

addressed through a contract modification. Also, before construction, if required, the

contractor in consultation with GSA, the City, MCDA, and MPCA would submit plans for

design modifications related to foundation work and remediation efforts so the selected

design could be constructed on the site without worsening any existing adverse

environmental conditions and/or to allow remediation efforts to continue for as long as they

were needed. Amendment 12 included three reports prepared by STS regarding conditions

at the site and one report prepared by the contractor who removed the underground storage

tanks. Exhibit 38. GSA issued amendment 13 to the RFP on December 29, to provide

offerors with a copy of the STS report dated December 20. Exhibit 40.

In early January 1994, GSA provided the City and MCDA with a draft amendment

to the Development Agreement. The draft said the Development Agreement required

MCDA to remediate all adverse environmental conditions identified before the property was

conveyed to GSA. It also said that after the parties signed the Development Agreement, they

became aware of contaminants other than petroleum at the site. The draft amendment said

the parties realized the conveyance of the property and construction of the project would be

unduly delayed if they had to wait until MCDA remediated all adverse environmental

conditions at the site. Therefore, said the draft, the parties wanted to amend the

Development Agreement to provide that MCDA would fund remediation of all adverse

environmental conditions and related site preparation after award of the design/build

contract. Exhibit 41.

GSA’s draft amendment to the Development Agreement said GSA would issue a

contract modification telling offerors of the conditions at the site. After award, GSA would

tell the contractor that its development of foundation design plans would be prepared in

consultation with GSA, MCDA, the City, and MPCA, in order to address the remediation

effort to be undertaken by the contractor and/or MCDA to remove contaminated soil; to

remove, treat, and/or seal the property from contaminated groundwater; and/or to isolate the

site from adjacent properties. The foundation design plans would be made available to the

City, MCDA, and MPCA for review, consultation, and comment. MCDA would pay all

costs reasonably associated with the remediation effort. The draft also said the contractor

would not be required to alter its awarded design, the remediation plan, or the project

schedule in order to achieve a less costly remediation effort. GSA would issue a contract

modification to carry out the remediation efforts in conjunction with the excavation and

foundation phases of construction, and MCDA and the City would pay the cost of the

contract modification, including but not limited to design, construction, overhead and profit,

CBCA 385

delays, and all associated administrative costs of GSA. The draft amendment said MCDA

would participate with the City, GSA, and MPCA in reviewing the contractor’s foundation

design plans and MCDA would comment on the plans in order to ensure they identified all

remediation efforts associated with the site. The draft also said MCDA would provide the

design/build contractor with an approved site for disposing of contaminated soil. Exhibit

41.

An attorney for the City and MCDA revised the draft and returned it to GSA and

MCDA on January 7. Among other things, the revised draft limited MCDA’s responsibility

to the remediation of contamination caused by petroleum. It also said the standard for

remediation would be the rules, regulations and determinations of MPCA. Also, it required

the foundation design plans to be made available to the City, MCDA, and MPCA for review,

consultation, comment, and approval. The revision eliminated the provision contained in

the draft which said the design/build contractor would not be required to alter its awarded

design, the remediation plan, or the project schedule in order to achieve a less costly

remediation effort. The revision also said MCDA and the City would participate with GSA

and MPCA in reviewing the contractor’s site foundation design plans. In addition, MCDA

and the City would make sure the contractor’s plans would be coordinated with MCDA’s

remediation efforts. Regarding payment of the cost of the contract modification, the revision

said MCDA and the City would pay the reasonable cost of the modification, including

design, construction, overhead, and profit, but not delay costs or GSA’s administrative costs.

The revision said MCDA would continue its petroleum contamination remediation efforts

following award of the design/build contract. The revision to the draft amendment also said

GSA would use its best efforts to cause the design/build contractor to implement the least

costly remediation design. The revision said MCDA would decide whether to approve

paying for the excess cost of disposing of contaminated soil. Exhibit 42. The attorney who

drafted the revisions said the purpose of giving the City and MCDA the right to approve the

foundation design plans was to protect against writing a “blank check.” Exhibit 513 at 2.

On January 11, 1994, GSA told MCDA the revisions to the draft amendment were

unacceptable because they did not represent the agreement reached by the parties on

December 16, 1993. GSA said the result of the December 16 meeting was an

acknowledgment by MCDA that it could not convey a remediated site on the date the

conveyance was supposed to occur, and a major concession by GSA to accept a

contaminated site in exchange for MCDA’s agreement to fund a remediation plan to be

designed and implemented by GSA’s design/build contractor pursuant to a contract

modification. GSA objected to limiting MCDA’s responsibility for remediation to

contamination caused by petroleum hydrocarbons. It also objected to allowing MCDA to

fulfill its responsibility by approving the least expensive remediation method. In addition,

GSA objected to MCDA’s position that it would not pay delay and administrative costs

CBCA 385

associated with the remediation effort. GSA also said it could not assure MCDA access to

the site in order to continue its remediation efforts after the design/build contractor began

its work because MCDA’s presence on the site could interfere with construction. Exhibit

43.

The parties signed the amended Development Agreement on January 14, 1994.

Section 13.01 said MCDA agreed to pursue and fund remediation of contamination. It also

provided, “The definition of contamination and the standard of remediation for all purposes

of this Agreement shall be in accordance with the rules, regulations and determinations of

the [MPCA].” Contamination was limited to contamination identified before January 14,

1994, or subsequently identified as the result of excavation for construction or as the result

of implementation of remediation. The amendment said if MCDA performed the obligations

imposed by the amendment, this would satisfy the responsibilities imposed upon MCDA by

the second sentence of section 4.03(b)(iv) of the Development Agreement. Exhibit 46 at

776.

The general thrust of the amended agreement was that GSA would tell the

design/build contractor about the environmental condition of the property, the design/build

contractor would develop a remediation plan and a foundation plan which addressed the

remediation effort to be undertaken by the contractor, GSA would issue a contract

modification to effect the remediation effort, and MCDA would pay the cost of the

modification. Exhibit 46. The language of several portions of the amended agreement are

important to a resolution of this appeal and we set these out in the following paragraphs.

Section 13.03 of the amended Development Agreement read as follows:

Plan Development and Approval. The Design/Build Contractor, immediately

after award of the Design/Build Contract, will be advised in writing by GSA

that its development of the design plans for the foundation of the Project and

the Plaza Garage will be prepared in consultation with GSA, MCDA, the City

and MPCA in a manner which addresses the necessary Contamination

remediation effort to be undertaken by the Design/Build Contractor in

conjunction with the excavation and foundation phase of construction. The

Design/Build Contractor will develop a remediation plan which may include

but shall not necessarily be limited to removing remaining contaminated soil

and/or contaminants, removing, treating and/or sealing the Property from the

contaminated groundwater located in portions of the Property, and/or isolating

the Property from adjacent properties. The foundation design plans and the

remediation plan, including cost itemization in reasonable detail and

specificity of all costs, if any, above and beyond the costs in the fixed price

CBCA 385

contract which are reasonably associated with the remediation effort, will be

made available to the City and the MCDA for review, consultation and

comment. The MCDA and the City will participate with GSA and MPCA in

reviewing the selected Design/Build Contractor’s site foundation design plans

including the remediation plan, and will receive all relevant information

relating thereto. The MCDA and the City will constructively comment on the

plans being developed. The MCDA and the City shall be afforded reasonably

adequate time within the parameters of the project schedule as determined by

GSA, for their review, consultation and comment. GSA will use its best

efforts on behalf of the project and the parties involved to direct the

Design/Build Contractor to develop a reasonable and effective foundation

plan and remediation plan which provides the greatest value to GSA, MCDA

and the City. GSA shall have sole authority to approve and determine (a) the

appropriate foundation plan (subject to rights of the City regarding the Plaza

Garage . . .); and (b) the appropriate remediation plan subject to MPCA

approval.

Exhibit 46 at 777.

Section 13.04 of the amended Development Agreement read in relevant part as

follows:

Contract Modification. A contract modification for the design of a

remediation plan will be issued. Upon approval of the remediation plan by

MPCA, the GSA will issue a contract modification to the Design/Build

Contractor in accordance with GSA’s procurement and contract rules and

regulations to effect the appropriate approved remediation efforts in

conjunction with the excavation and foundation phase of construction. The

MCDA acknowledges responsibility for and agrees to pay the cost of such

contract modification(s), including but not limited to design, construction,

overhead and profit costs, delay costs and all associated management and

inspection costs to GSA. No delay costs or management and inspection costs

shall be incurred with respect to any period prior to award of the Design/Build

Contract.

Exhibit 46 at 778.

GSA agreed to permit MCDA to pursue remediation activities on the property and

the parties agreed to use their best efforts to ensure cooperation with the design/build

contractor regarding their activities so, for example, off-site activities under MCDA’s

CBCA 385

control would not adversely affect the contractor’s performance of the design/build contract.

At any time, GSA could terminate the permission it was granting to MCDA to carry out its

remediation activities. MCDA agreed to provide the design/build contractor with an

approved site for MCDA’s storage, treatment, or disposal of contaminated soil, if necessary.

Exhibit 46 at 778-79.

Section 13.07 of the amended Development Agreement read as follows:

Cost Containment; Contract Administration. The MCDA and the City

acknowledge that they may not compel GSA to have the Design/Build

Contractor to [sic] alter the awarded design, including but not limited to

foundation design or the project schedule, in order to achieve a less costly

remediation effort. All matters affecting the Design/Build Contract

administration shall be the sole responsibility and authority of GSA and the

GSA contracting officer, with the exception of funding to be provided by the

MCDA. All parties acknowledge the need for expediency in developing a

remediation plan and will pursue all reasonable efforts to develop a MPCA

approved remediation plan within the project’s established work schedule.

Exhibit 46 at 779.

Section 13.08 of the amended Development Agreement read as follows:

Funding. The MCDA’s funds to pay the cost of the contract modification(s)

as set out in Section 13.04 will be transferred to GSA within five (5) working

days prior to the issuance of the contract modification(s), as a further

contribution for deposit in the Federal Building Fund set up for use on the

Project. The transfer of such funds shall not be contingent upon which design

or remediation plan/design/effort is selected. Furthermore, the MCDA and the

City acknowledge that the current foundation plans and the resulting

remediation plans and costs shall not be a condition/factor in determining the

award of the Design/Build Contract.

Exhibit 46 at 779.

On January 19, 1994, MCDA conveyed the project site property to GSA. Exhibit

537.

On February 4, Sverdrup sent GSA a technical memorandum which contained

Sverdrup’s review and evaluation of documents generated by other consultants who had

CBCA 385

explored environmental issues at the project site. Based upon its review, Sverdrup did not

believe the groundwater at the site was contained within a depression in the clay layer

immediately above the bedrock, which is how the location of the groundwater was shown

in the STS June 12, 1992 report. The groundwater appeared to be recharging from some

unknown source, and this meant there was a possibility of the presence of a nearly constant

supply of groundwater which could enter a construction excavation. Sverdrup also

commented on the remediation efforts undertaken and said the STS system was performing

as intended. However, Sverdrup also said the system appeared to be a slow means of

removing contamination. Exhibit 51.

GSA awards the design/build contract and requests a proposal to design a plan to

remediate conditions at the site, while MPCA continues its oversight

On February 14, 1994, GSA accepted the best and final offer presented by BPT

Courthouse Associates (BPT). BPT’s concept was to build the new courthouse on the north

part of the site. It would be thirty stories tall and have an underground parking garage. On

the south part of the site, BPT would construct the public plaza and beneath it, a deep

underground parking structure. GSA’s acceptance told BPT it was not to proceed with its

work until it received a notice to do so. Exhibits 52, 120. A few days later, GSA, through

TLPA, asked Sverdrup to prepare a request for proposals to accomplish the remediation of

the conditions at the project site, which Sverdrup did. So far as our record shows, GSA

never issued this request for proposals. Exhibit 53. On March 17, GSA gave BPT notice

to proceed to perform the design/build contract. The notice to proceed told BPT it had 915

calendar days to complete its work and that its performance period began running when it

received the notice on March 18. Exhibit 54.

On March 18, GSA gave BPT a request for a proposal to change the terms of the

contract (the remediation RFP) and asked for a response within ten days. GSA said BPT’s

response should include an itemized cost breakdown and documentation to support any

delay which would result from the change to the contract. The remediation RFP described

the work required by the change as follows:

The contractor shall perform all services necessary for the design of the

remediation of the site of the New Federal Building - United States

Courthouse in Minneapolis, Minnesota. Remediation of the site shall include,

but not be limited to the removal of contaminants in the soil and groundwater

to the levels acceptable to the General Services Administration and the

Minnesota Pollution Control Authority and, if applicable, redesign of the

building foundation system. Work shall include, but not be limited to, related

planning, additional exploration, and engineering design. Remediation shall

CBCA 385

take into consideration limiting the impact upon completed construction.

Provide construction documents, plans, specifications, and all other necessary

documentation for remediation.

Exhibit 54 at 847. BPT told GSA it wanted to talk to MPCA and would need more than ten

days to respond to the remediation RFP. Exhibit 54 at 866.

On March 22, BPT transmitted the remediation RFP to its architect and its

construction contractor, Turner Construction Company (Turner). The transmittal included

a copy of the amended Development Agreement. Exhibit 55. The record does not establish

when BPT received a copy of the amended Development Agreement.

As GSA was proceeding to award the design/build contract, MPCA continued to

monitor the activities at the project site. On February 28, 1994, MPCA wrote to MCDA

regarding the remediation effort. MPCA said it thought the original STS corrective action

design was a feasible method for reducing the contamination levels at the site because

treating the soil and groundwater in place instead of moving it to another location minimized

the risk to public health and the liability of the responsible party.2 MPCA said it had been

told that “most of the soil beneath the property would most likely have to be removed” when

the site was developed, and treating the soil in place before it was removed would reduce

or eliminate the need to treat the soil when it was excavated. MPCA also said it had been

told the contractor might find it necessary to excavate through the clay layer above bedrock,

and had warned of the consequences of removing the clay which held the perched,

contaminated groundwater. MPCA said it approved the STS design based upon MPCA’s

understanding that the date upon which the property was to be conveyed to GSA was not

known and sufficient time was available to meet MPCA’s cleanup goals. Exhibit 53 at

838-39.

MPCA reviewed in its letter the remediation work which had been accomplished,

which consisted of removing the underground storage tanks, excavating 160 cubic yards of

contaminated soil stored at the site, installing the STS system, and removing the STS system

so demolition could take place and the site could be cleared before it was conveyed to GSA.

After the site was cleared, a remediation system was installed by STS which MPCA had not

approved. During the installation process, an additional 590 cubic yards of contaminated

soil were excavated and stored at the site and efforts were currently being made by MCDA

to remediate all of the excavated contaminated soil. Exhibit 53 at 839-40.

The City was the responsible party for purposes of paying the cost of dealing

with the contamination present at the site. Exhibit 515 at 1538.

CBCA 385

In its February 28 letter, MPCA said it had not approved the excavation of the

additional contaminated soil, the new remediation plan, or the treatment of the excavated

soil, and would not likely have done so. MPCA said it would have required modifications

to all of the systems MCDA had put in place. Because development would begin soon,

MPCA said it was not likely the soil could be remediated in place to the extent it would not

require further treatment, which meant there was little financial gain to be made from the

remediation efforts which were being carried out at the site. MPCA explained that MCDA’s

reimbursement from the Petrofund was quite likely going to be reduced because MPCA did

not approve of the actions which were taken after the site was cleared, because the approved

remediation system was in place for only four months, and because MPCA had not agreed

to the excavation of any more than 400 cubic yards of contaminated soil. Exhibit 53 at 840

41. The policy of the Petrofund was to reimburse for the excavation and treatment of no

more than 400 cubic yards of contaminated soil per site. Transcript at 50-52, 154.

In a section headed “MPCA Requirements,” the February 28 letter reiterated MPCA’s

concern about excavating all of the soil, including the clay layer, above bedrock because this

could cause contaminated groundwater to migrate to bedrock. Such migration would be

unacceptable to MPCA, and MPCA understood BPT was going to work with MCDA and

MPCA to mitigate this concern. MPCA said discussions with BPT could also include “the

necessity of having to potentially mitigate the accumulation of organic vapors into the future

building.” MPCA noted the analysis of a groundwater sample collected by Sverdrup

showed the presence of semi-volatile substances which exceeded allowable limits and which

were not found in fuel products, and set out sampling and testing requirements. MPCA said

contaminated soil remaining at the site would have to be removed due to future construction

activities, and also said soil removed due to excavation activity would have to be screened,

sampled, and stored. Excavated soil which was contaminated with more than ten parts per

million of petroleum product would have to be separated from other soil, sampled, and

analyzed. Exhibit 53 at 841-42.

MPCA did not believe MCDA had acted illegally or neglected the environmental

concerns at the site, and did not intend to take any enforcement action against the City or

MCDA. Exhibit 515. MPCA’s main objection to reinstalling the system was that doing so

made no sense because the site was to be excavated soon. Given no time constraints, MPCA

thought the STS system most likely would have been successful. However, because

construction was to begin in three months, MPCA did not see a large benefit would be

achieved by reinstalling the system. The bulk excavation required for construction would

achieve the remediation objective. Transcript at 245, 305-07.

MPCA’s concern regarding the excavation of more than 400 cubic yards of soil

stemmed from the fact that the Petrofund was not likely to reimburse MCDA for removing

CBCA 385

more than this amount of soil. Transcript at 243-44. MCDA had known of the 400 cubic

yard limit and made the decision to remove more soil, knowing it would not be reimbursed,

because leaving the contaminated soil in place made no sense to MCDA. Transcript at

153-54.

STS understood MPCA’s concern regarding the excavation of more than 400 cubic

yards of soil was strictly financial, not environmental. Transcript at 50-52. STS also knew

the semi-volatile substances which were not found in fuel products would need to be dealt

with in order to have an acceptable site. These substances were not susceptible to treatment

by the soil vapor extraction and air sparging techniques used by the STS remediation system,

so STS would need to devise another method to deal with these contaminants. Transcript

at 104-05.

STS responded to MPCA on April 19, and explained how it would screen, sample,

remove, store, and analyze soils. STS explained its plan to use some soils as controlled fill

and to use soil vapor extraction to treat stockpiled contaminated soil. Exhibit 68. On

May 26, MCDA provided GSA with STS’s April 19 response and GSA forwarded the

response to BPT. Exhibit 82.

BPT responds to the request for proposals and MCDA rejects BPT’s alternative plans

If GSA had known exactly what it wanted BPT to do to remediate the site, it would

have issued a remediation RFP which set out GSA’s requirements. In issuing the

remediation RFP as it did, GSA intended for BPT to develop a proposal which contained

its own means and methods for designing a system to remediate the site. GSA did not want

to influence BPT’s response. Transcript at 414.

On March 25, 1994, a meeting was attended by representatives from GSA, BPT,

Turner, MPCA, Sverdrup, TLPA, MCDA, STS, GME Consultants (BPT’s geotechnical

engineer), and Ericksen, Roed/Johnston-Sahlman and Associates (BPT’s structural

engineer). The attendees discussed the status of the site, MCDA’s current remediation

efforts, MPCA’s awareness of remediation efforts, MPCA’s remediation goals for the

project, and design and construction issues. Exhibits 56-58. BPT had engaged GME, a

competitor of STS, to help formulate a response to the remediation RFP. Transcript at 122;

Exhibit 58.

The meeting attendees discussed the contaminated soil stored on site, which they

thought was close to being clean. The groundwater, located in the northeast corner of the

site, was contaminated and current efforts would not remediate it. The water could not be

removed due to concerns about how this would affect the Flour Exchange Building. GSA

CBCA 385

was concerned that petroleum vapors from contaminated groundwater could affect the

operation of the new construction. STS felt a permanent venting system would have to be

installed to protect the courthouse from vapors in the future. MPCA said excavation had to

comply with its requirements and if additional contaminants were encountered, excavation

would have to stop until it approved the remediation actions to be taken. If contaminated

soils were not removed, they would have to be monitored and remediated until they reached

an acceptable level of contamination. MPCA also said if all the excavated soils were clean

or if all contaminated soils above the groundwater were removed during excavation, the

groundwater could remain in place and be allowed to remediate naturally. If all

contaminated soils were not removed, the soils and groundwater would require further

remediation. STS thought the soils would be free of contaminants within a short period of

time and did not think soil contamination would cause a problem for construction. Exhibits

56-58.

After MPCA said the contaminated groundwater could remain in place if the

contaminated soils were remediated, the discussion at the meeting concentrated on methods

of construction. BPT provided a foundation plan sketch which showed the elevations of

planned excavation across the site. The south part of the site would be excavated to greater

depths than would the north part of the site. In the south, the foundation was to be slab-on

grade, one or two feet above bedrock. In the north, excavation would remain ten to eighteen

feet above bedrock, and the foundation would be four-feet to six-feet diameter caissons set

into rock. The parties then discussed methods of drilling the caissons that would be

acceptable to MPCA. STS outlined a method for sealing the caissons to prevent polluted

water from penetrating below the clay layer and MPCA said it would approve this method

if it got a sketch showing the process. BPT planned to begin excavation in June or July

1994, and would provide MPCA with the sketch it wanted. Exhibits 56-58.

On March 29, based upon the discussion at the March 25 meeting, GME sent a letter

to BPT which provided options for remediating the site in ways which would eliminate

liability to BPT and its team members for the environmental conditions at the site. GME

explained it had considered pumping and treating the contaminated water, air sparging and

venting the soil, and bioremediation. However, GME concluded each of these remediation

methods could be a long-term process and would leave some residual levels of contaminants.

Also, each of these methods would have to be employed after construction, which would not

alleviate the risks during construction. Moreover, each of these remediation methods could

be difficult to install, operate, and maintain due to the presence of the new construction and

the Flour Exchange Building. Exhibit 58.

GME also considered removing only unsaturated contaminated soils and leaving the

contaminated groundwater in place, which MPCA said it would approve. This method

CBCA 385

would require underslab venting and monitoring for an extended period of time due to the

volatilization of petroleum from the saturated soils and groundwater. This would leave in

place a long-term, latent liability because the water could spread or might have to be

remediated later if standards and requirements changed. It could also give rise to claims by

the owners of the Flour Exchange Building. Another option was to isolate the site by

constructing a slurry wall around the entire site. After this was accomplished, all

groundwater and contaminated soil could be removed from the site. Exhibit 58.

In its March 29 letter, GME also told BPT that, based upon a conversation with a

representative of MPCA, it understood the Petrofund would not reimburse any more costs

incurred in order to remediate conditions at the site because MPCA had previously approved

one reimbursable remediation system for the site which MPCA thought would have cleaned

the site to MPCA standards if it had been left in place. Exhibit 58.

On March 31, 1994, GSA told BPT it could have more time to respond to the

remediation RFP and asked BPT to submit its response at its earliest convenience. Exhibit

61. On April 6, GSA met with BPT to provide GSA’s comments on BPT’s preliminary

building design concepts. GSA’s comments, which amounted to ten pages, spelled out the

strengths and weaknesses of various aspects of BPT’s preliminary courthouse design.

Exhibit 64.

Ericksen wrote to BPT on April 7. Based upon recent meetings with MPCA and

MCDA, Ericksen said it had worked to define a program which would remove all

contaminated soils above the groundwater and prevent the groundwater from entering below

the clay layer. Soils adjacent to the west wall of the Flour Exchange Building could remain

in place because the existing data showed contamination levels there were below acceptable

limits. Ericksen believed by using a grout curtain, a four-inch to six-inch wide barrier, along

the south and west sides of the Flour Exchange Building, it could isolate the contaminated

groundwater, remove contaminated soils as necessary, and comply with MPCA’s

requirements. Creating a grout curtain would eliminate the need to dewater below the Flour

Exchange Building and would prevent the contaminated water from flowing into excavated

areas. If it became necessary to remove all of the contaminated soils and water down to

bedrock, this could be accomplished by adding a grout curtain around the perimeter of the

site where sheet piles and wooden lagging were to be installed as a temporary retention

system for the roadways around the site. Exhibit 63. Also, Ericksen recommended making

more soil borings to investigate environmental conditions near the south edge of the Flour

Exchange Building, where there seemed to be a gap in the available data. Exhibit 63 at 945.

Turner reviewed Ericksen’s April 7 letter and provided comments to BPT on

April 13. Turner was concerned about the unknown health hazards and potential liability

CBCA 385

of creating a grout curtain around only the Flour Exchange Building. Turner liked the idea

of using a grout curtain to dam the water and then completely removing the contaminated

soils and the clay layer down the surface of the rock. Turner said it was ready to proceed

immediately, assuming it received appropriate hold harmless and indemnification language

from BPT and GSA with regard to removing the contaminated material. Turner also

proposed to accomplish the work on an expedited schedule in order to minimize the impact

of the remediation work on the overall construction schedule. Exhibit 65.

On April 14, 1994, GME summarized for BPT the alternatives which they had

discussed. GME described the goals as being technically responsive to GSA and MPCA,

while mitigating “100% of the risk associated with the remediation of the contaminated

soil.” GME’s summary included Alternatives A and B, discussed in the following

paragraphs. Exhibit 66.

Alternative A was to remove all or nearly all of the contaminated soil and

groundwater from the site. This would satisfy MPCA and reduce the exposure of BPT and

its subcontractors from the possibility of contaminants migrating to or from the site and

vapors coming into the courthouse. Either the pile and lagging system would be redesigned

to allow excavation to bedrock and a grout curtain installed behind the wall, or a structural

slurry wall would be installed around the perimeter of the site. Then, all soil would be

excavated to bedrock, the site would be dewatered, and the sand and clay would be

excavated. No special approval would be needed to install the caissons and no vapor

venting system would be needed. If BPT could not obtain indemnification from

environmental contamination claims, this alternative would be considered. Exhibit 66.

Alternative B was based upon MPCA saying at the March 25 meeting that the

contaminated groundwater could remain in place so long as the contaminated soil above the

groundwater was removed. GME recommended asking MPCA for written approval of such

a plan and also asking MPCA to confirm that soils which were contaminated with less than

ten parts per million of petroleum product would not have to be excavated. Alternative B

called for excavating contaminated soil to within one foot of the perched groundwater.

GME recommended asking MPCA if contaminated soil near the west wall of the Flour

Exchange Building could remain in place above the groundwater. If MPCA would approve

this procedure, the soldier pile system would not have to be redesigned and the Flour

Exchange Building would not need to be underpinned. Alternative B also included a grout

curtain which would be installed parallel to the walls of the Flour Exchange Building,

behind the pile and lagging and down to bedrock. Caissons and soldier piles would be

installed in a method that satisfied MPCA and a vapor venting system would be installed.

Alternative B would require BPT to obtain indemnification from environmental

contamination claims. Exhibit 66.

CBCA 385

On April 15, GME sent a letter to MPCA which contained a written description of

the foundation construction, so MPCA could confirm its verbal approval to install caissons

to bedrock through contaminated soil. GME explained its proposed procedure for installing

the caissons and attached a diagram showing the steps involved in the installation. GME

also provided a description of the proposed excavation plan and STS boring logs to show

where contaminated soils had been found. GME said a key element of the excavation plan

was its understanding that MPCA would allow contaminated soil to remain in place

provided it was contaminated with less than ten parts per million of petroleum product.

Exhibits 58 at 899-901, 67. On April 21, BPT asked GSA to confirm that MPCA agreed

with the concepts contained in the GME letter. Exhibit 69. GME subsequently made

twenty-four additional borings across the site because nearly all of the previous borings had

been made in the two areas near where the underground fuel storage tanks had been located.

GME’s work was done entirely at BPT’s expense. Exhibits 68, 91, 120.

On April 21 or 22, BPT provided GSA with a copy of GME’s April 14 letter, which

contained Alternatives A and B. BPT said it was in the process of preparing price estimates

as well as preliminary estimates of the delays to construction associated with each

alternative. Exhibit 70. Turner provided BPT with schedules related to the remediation

effort and an estimate that the remediation effort would cost approximately $3.2 million.

This included $97,000 in overtime pay which Turner would expend in an effort to make up

delay days. Turner wanted to make up any lost time before December 1994, so it would not

experience the ripple effect of the delay in the winters of 1994-1995 and 1995-1996.

Exhibits 71, 73.

Sverdrup reviewed the alternatives proposed by GME and provided GSA with its

comments on April 29. Sverdrup did not like Alternative B because, although it might be

less costly than Alternative A, GSA would end up with a site which would require constant

monitoring, which might require continuous venting of vapors, and which could produce

liability issues in the future. Sverdrup divided Alternative A into A-1, which proposed the

installation of a grout curtain behind the pile and lagging system, and A-2, which proposed

the installation of a structural slurry wall. Sverdrup preferred Alternative A-2 because it

would cut off water flowing into the site and also act as a structural system for the

underground parking garages. Exhibit 72.

On May 3, Turner provided BPT with a draft scope of work for bidding the

excavation, sheeting and bracing, and site remediation work based upon Alternative A. The

work included isolating the site by installing a grout wall completely around the site’s

perimeter to cut off the potential flow of groundwater and soil vapors, and removing all

contaminated materials down to bedrock and then backfilling with clean soil. Turner’s draft

included a substantial amount of detail describing how this work would be accomplished.

CBCA 385

Exhibit 74. On May 19, Turner told BPT it expected a delay to its planned construction start

date. It also told BPT this delay would cause other delays because it would shift work into

the winter months which the best and final offer anticipated would be performed before

winter. Turner also said it could not proceed with the design upon which its best and final

offer was based, and it was continuing to work with GME and expected to have estimated

prices for GME’s alternatives available on May 24. Exhibit 76.

In a letter to BPT dated May 19, GSA said it was concerned that BPT had not yet

responded to the remediation RFP. GSA asked for a response within ten days and said it

could then continue the dialog with BPT, the City, MCDA, and MPCA. Exhibit 75.

GME completed a preliminary comprehensive corrective action plan for the site for

purposes of MPCA’s review, and provided the plan to BPT on May 19. The plan was

preliminary because GME said it would need additional information before it could prepare

a final plan. GME discussed the technical design of its Alternatives A and B, both of which

would satisfy MPCA’s requirements, and explained how the designs would be constructed.

Alternative B was different from the Alternative B discussed in GME’s April 14 letter to

BPT. Instead of isolating only the Flour Exchange Building, Alternative B now called for

isolating the north part of the site. This involved constructing a cutoff wall beginning at the

southwest corner of the Flour Exchange Building and running east to west across the site,

and then jet grouting around the west and north sides of the site and along the west wall and

the southwest corner of the Flour Exchange Building. GME estimated it would take eight

weeks to clean up the site using Alternative A and six weeks using Alternative B. Exhibit

77.

MCDA wrote to GSA on May 20. The amendment to the Development Agreement

said BPT would develop a foundation plan in consultation with GSA, MCDA, the City, and

MPCA. MCDA was concerned that GSA was not following this process. In MCDA’s view,

GSA would not fulfill the terms of the amendment if it were to present MCDA with a plan

prepared by BPT or Turner without input from MCDA, even if GSA had not approved the

plan. MCDA had received a copy of a Turner document which showed GME’s Alternative

A. In MCDA’s view, such a concept would go far beyond what it called the “limited

purpose and scope of remediation” called for by the amended agreement. MCDA described

the actions needed to fulfill its responsibilities as perhaps including the removal of any “very

localized soil contamination discovered during further excavation” and the “possible need

to continue the perched water treatment.” It also characterized as “minimal” the financial

obligations imposed upon it by the amended agreement. Exhibit 519. MCDA gave the City

Council a copy of its letter to GSA and said it was concerned GSA planned to demand a

high price for wholly unnecessary remediation work. Exhibit 520.

CBCA 385

Turner told BPT on May 23 that it would incur $57,860 in costs related to preparing

the design of a remediation plan. Exhibit 78. GME’s estimated costs for the engineering

and consulting work needed to remediate the site were $116,000 for Alternative A and

$105,000 for Alternative B. Exhibit 79.

TLPA, MPCA, MCDA, Turner, and BPT met on May 26 to review Turner’s scope

of work for excavation, sheeting and bracing, and soil remediation. As we said earlier, this

scope of work was based upon Alternative A. At the meeting, neither MPCA nor MCDA

expressed any serious problems with Turner’s proposal. MCDA and MPCA felt that

isolating the north part of the site along the west, north, and east sides and removing soil

below the planned level of the slab on the north part of the site was not necessary for

remediation purposes. MPCA said it would not approve the plan as proposed by Turner

because the plan went beyond what MPCA would require of MCDA. However, MPCA

would not object to Turner’s proposal so long as GSA and MCDA agreed as to the scope

of work, GSA and MCDA developed a plan defining who was responsible for disposing of

soil, and MPCA’s requirements were met during excavation and off-site remediation. Costs

were not discussed during this meeting. Exhibits 84, 86. Based upon the meeting, Turner

provided BPT with a revision of the draft scope of work it prepared earlier in the month.

The revision, like the draft, called for the site to be completely isolated and excavated.

Exhibits 81, 87.

Also on May 26, Turner provided BPT with estimated construction costs for

Alternatives A and B. The estimates were based upon MPCA’s approval of a GME design

and Turner beginning work on July 5. Turner expected a four-month delay to the

completion of construction work. The cost of soil remediation for each of Turner’s plans

was approximately $2.5 million, plus additional amounts for working in winter weather,

added staffing and administrative costs, profit, bond, and contingencies. The total estimated

costs were between approximately $4.3 and $4.5 million. Exhibits 85, 522.

On May 26, GSA responded to MCDA’s May 20 letter. GSA said it had been

following the procedures established in the amendment to the Development Agreement.

GSA said it had not yet received a specific recommendation from BPT regarding

remediation, and understood BPT was still discussing possible approaches with MPCA.

BPT’s ideas needed to be refined and developed, and additional meetings would be held

with MPCA, the City, and MCDA to discuss the issue further. The statements MCDA made

in its letter gave GSA the impression that MCDA was committed to an outcome which

would minimize MCDA’s costs and increase GSA’s risks. GSA said it viewed this outcome

as contrary to the amended agreement. Exhibit 521.

CBCA 385

On May 27, BPT’s architect provided BPT with its estimate of the cost of responding

to the remediation RFP. Assuming there would be no modification to the design of the

building and the design schedule remained unchanged, the architect estimated its costs

would be approximately $240,000. Exhibit 88. The architect later revised its estimate to

$57,817.94 for costs related only for the design phase. Exhibit 92.

On June 1, BPT provided GSA with a proposal in response to the remediation RFP.

The proposal, which is dated May 27, included $538,222 for the design costs of Alternative

A and $524,912 for the design costs of Alternative B. Exhibit 89. The following day, BPT

sent GSA Turner’s May 26 cost estimates for delay and construction associated with the

remediation design concepts. Exhibit 90.

On June 2, GSA, MPCA, MCDA, BPT, Turner, GME, STS, TLPA, and Sverdrup

met to review and evaluate the alternative remedial action design concepts developed by

Turner, GME, and BPT. GME explained Alternatives A and B, and BPT recommended

Alternative A. BPT anticipated a two-month delay to remediate the soil and install a grout

wall around the site, and said it expected an added one-month delay because the initial

delays would probably prevent closing the building before winter. Also, said BPT, there

might be one more month of delay due to negotiations about the remedial design to be used.

The attendees at the meeting discussed the location of groundwater at the site and how to

prevent it from flowing into the construction excavation. They discussed the possibility of

developing a third option, in addition to the two alternatives developed by BPT. They

discussed the fact that the stockpiled contaminated soil, which had been receiving treatment

using STS’s remediation system since 1993, was still contaminated. GME pointed out that

MPCA could always reopen its file regarding a site and the owner would be responsible for

the cost of any additional work required at the site. Throughout the meeting, the participants

discussed the indemnification of BPT and Turner. Exhibit 91.

Before the June 2 meeting, MCDA asked STS to develop a conceptual design for a

remediation system. Transcript at 77-78. At the meeting, MCDA said it would not pay for

either Alternative A or B, because it believed each alternative exceeded what was needed

in order to remediate the conditions at the site. MCDA felt GSA wanted more than the

minimal cleanup which MPCA would allow. Exhibit 91; Transcript at 143. MPCA felt

although Alternative A was one way of remediating the contamination at the site, there were

more practical methods which would accomplish the same result for far less money.

Transcript at 313. BPT felt MCDA was oversimplifying the remediation effort. MCDA

said it would not budge from the position that BPT’s proposals were beyond what was

required. Exhibit 91. GSA was looking for a solution to remediate the site and was

amenable to anyone coming up with a plan. Transcript at 366. GSA suggested MCDA

provide a remedial design and give it to BPT to implement, and MCDA asked STS to

CBCA 385

provide such a design. Exhibit 91. Everyone agreed STS and MCDA would prepare a

remediation plan which would meet MPCA’s requirements. STS asked for GME’s boring

log information so it could develop its design. GSA said there would be another meeting

when STS completed its design. As of June 2, BPT had not been reimbursed by anyone for

the work it and its team had done in order to respond to the remediation RFP. Exhibit 91.

Turner begins work and STS begins developing a remediation design plan

On June 6, 1994, Turner began demolition of the foundations and foundation walls

which remained along the perimeter of the site, and started mobilizing for its pile driving

operation. Turner said until the remediation issue was resolved, it could install soldier piles

until it had to penetrate the clay layer or until it had to remove soil. Some demolition work

could not proceed because Turner did not want to increase costs by excavating soil, moving

it to a stockpile on site, and then moving it to another location. Turner provided BPT with

a schedule which showed the work it planned to accomplish during the next three or four

weeks, and showed which work it could not do without excavating soil or without an

approved remediation plan. Exhibits 93, 98.

Also on June 6, GSA spoke with MCDA. MCDA said as a last resort, it was

prepared to indemnify BPT. However, MCDA hoped GSA could help avoid this by

negotiating with BPT. Exhibit 94.

On June 8, BPT provided STS with the courthouse basement plan as it was submitted

to GSA pre-award. BPT said every column shown on the plan would be built over a caisson

socketed into rock. BPT also showed on the plan the approximate location of the wall

between the portion of the site to be excavated to bedrock and the portion to be excavated

to a lesser depth. Exhibit 95.

Also on June 8, BPT told GSA it would be willing to implement a soil remediation

plan designed by MCDA if the plan was approved by MPCA and GSA, if MPCA would

consider the site clean if the plan was implemented, if BPT was indemnified for claims

related to contamination, and if BPT was given time to review the plan and determine its

effect upon construction and the schedule. Exhibit 97.

On June 9, GSA, MPCA, MCDA, BPT, Turner, GME, STS, TLPA, and Sverdrup

met to review and evaluate the additional remediation plan being developed by STS on

behalf of MCDA. STS said it had not been able to complete its plan because it had not

received all of the information it had requested from GME and BPT. It had been able to use

drawings BPT provided, but it needed additional information regarding the area and

elevations of the lower levels of the new courthouse building and the Flour Exchange

CBCA 385

Building, additional plans of details of the courthouse, and additional subsurface

information from GME. Turner gave STS the estimated elevations of the floor of the new

courthouse building and the bottom of the footings of the Flour Exchange Building, which

showed the floor elevation would be twelve feet lower than the elevation of the bottom of

the footings. Although we are not sure when STS received GME’s boring logs, it had them

at this meeting. Exhibits 98, 528.

At the June 9 meeting, STS said the installation of Turner’s pile and lagging retention

system would not require any special construction methods because the soldier piles would

not penetrate the clay layer. However, a special construction method would be needed when

caissons were installed in areas of contaminated soils and groundwater. BPT had provided

STS with drawings of typical caisson construction, but STS did not believe all of the

elements shown on the drawings were necessary. STS asked Turner about its plan to

underpin the Flour Exchange Building and they agreed underpinning was necessary only at

the building’s southwest corner. Exhibit 98.

STS expressed concern about the possibility of contaminated groundwater entering

the excavation from beneath the Flour Exchange Building and, in general, the movement of

groundwater from the north part of the site to the south part of the site, where excavation

would be significantly deeper. STS noted the groundwater at the site had risen between six

and nine inches since demolition occurred. STS suggested installing a grout cutoff wall

running east to west to separate the north and south parts of the site. MPCA shared STS’s

concern and said a wall would be necessary, at a minimum, along the south side of the Flour

Exchange Building. BPT suggested the wall serve as the underpinning of the Flour

Exchange Building, instead of the soldier piles and lagging BPT currently planned to use.

Exhibit 98.

TLPA asked if a vapor barrier would be installed beneath the courthouse garage

where contaminated soil was being left in place. STS thought there were no confined spaces

below grade, so no barrier would be necessary. However, when STS realized there were

going to be rooms below grade, STS said it might be more cost effective to ventilate the

confined areas than to use a vapor barrier. Exhibit 98. In STS’s view, an underslab venting

system was needed to capture any vapors from the contaminated groundwater and soils, and

to prevent vapors from migrating to occupied areas of the building. STS thought such a

system was a reasonable and proper element of the remediation plan. Transcript at 108-09.

So did GSA’s on-site project manager, who was an expert in commercial construction.

Transcript at 562, 581.

Turner continued to be concerned about indemnification and said it would not mind

if MCDA used another contractor to perform the remediation work, so long as Turner had

CBCA 385

control of the construction schedule. MCDA said if it used another contractor, it would have

to solicit bids and this could take up to two months. Exhibit 98.

At the June 9 meeting, Turner explained it was performing demolition work, but it

did not know which soil was considered contaminated so it could not move any soil away

from the site and the stockpiled soil would soon begin to congest Turner’s work area. BPT

asked if MCDA could remove stockpiled contaminated soil and MPCA said this should not

be a problem. STS thought the removal could begin immediately using trucks hired by

MCDA, and said it would be available to monitor the soils being removed. Turner felt

coming to some resolution about remediation as soon as possible was important so it could

create a schedule, and BPT explained that construction of the courthouse was critical path

work, and it was to be built on the north part of the site where there was known to be

contamination. Exhibit 98.

Near the end of this meeting, BPT asked STS what it needed in order to develop its

remedial design. STS said it needed the retention system design, caisson design, location

and design of the grout wall to run across the site from east to west, elevations of the

foundations of the Flour Exchange Building and the elevations where BPT would underpin

the building, the location and elevation of below-grade enclosed areas, a plan of the drain

tile system, and a plan of a ventilation system of the enclosed areas. Exhibit 98.

There was another meeting held on June 13. Sverdrup attended on behalf of GSA.

Also in attendance were MCDA, STS, GME, Turner, and Ericksen. The purpose of the

meeting was to provide STS with information so it could design its remediation plan, and

STS had many of its questions answered. STS needed foundation, footing, and basement

plans from BPT, and BPT said it could provide STS with a copy of BPT’s best and final

offer plans. However, preliminary building design plans were not due from BPT to GSA

until mid-July, and final design plans were not due until September. BPT’s best and final

offer plans were preliminary design plans which showed the amount of excavation work

BPT would perform in order to construct the building. The foundation design plans could

be finished while the excavation work was taking place. Exhibits 101-03, 105, 525, 528;

Transcript at 569.

STS said the caisson design outlined by GME was acceptable and STS would decide

which locations needed to use the design and how to deal with the spoils from the

installation, recognizing that the exact locations of caissons and pilings were in the process

of being designed by BPT. After this June 13 meeting, GSA determined BPT’s plans could

not be released, but could be reviewed by STS at the offices of Turner, TLPA, or GSA.

Exhibits 101-03, 105, 525, 528. GSA did not release the plans due to security concerns.

Exhibit 553.

CBCA 385

Also discussed at the June 13 meeting was the system of underpinning at the

southwest corner of the Flour Exchange Building proposed by BPT in its best and final

offer. STS said it would recommend an underpinning system to be used and the extent of

the underpinning which was needed. The cutoff wall which STS was to design to divide the

north and south parts of the site would most likely be connected to the underpinning in order

to provide a continuous barrier. Elevator shafts would penetrate the clay layer to rock and

STS’s plan would provide for this installation. In addition, STS would provide a plan for

venting the occupied spaces in the courthouse basement and electrical vaults. Turner said

the electrical vault would be located above the most contaminated part of the site and asked

STS to evaluate the system for venting vapors below and around this area. BPT planned to

use perimeter drains and STS was to decide how to deal with vapors and groundwater

collected in the drain lines, especially along the Flour Exchange Building. STS said it had

enough information to prepare a plan by June 17. Exhibits 101-03, 105, 525, 528.

Another item discussed at the June 13 meeting was the removal of soil from the site.

The removal of the soil which had been stockpiled during previous remediation efforts was

going well. The affected soils in the middle of the site needed to be removed as soon as

possible. STS said Turner could begin driving piles to bedrock on the west side of the site

the next day. Turner had placed seismic recording devices and crack gauges in the Flour

Exchange Building and notified the owner that pile driving would begin on June 14. BPT

and Turner continued to discuss the indemnification issue. MCDA said it was having a

meeting on the afternoon of June 13 to discuss how it would contract for the remediation

work at the site. Exhibits 101-03, 105, 525, 528.

On June 14, STS wrote to MCDA about the environmental aspects of the installation

of the soldier pile and lagging system. STS thought the only contaminated soil which might

be encountered would be along the east edge of the north side of the project, and that no

contaminated groundwater would be encountered. Exhibit 104.

On June 16, MPCA sent a letter to MCDA saying it had recently completed a review

of several pieces of information regarding the actions to be taken in response to the

petroleum tank releases at the site. MPCA did not object to the method of caisson

installation proposed by GME. MPCA reviewed STS’s April 19 response to MPCA’s

February 28 letter, and said it did not oppose the actions proposed by STS on April 19, with

certain modifications. MPCA’s letter went on to explain that if contaminated soil was

exposed when excavation was completed to the final construction grade, excavation should

continue until contamination levels fell below ten parts per million, but should not continue

into the clay layer or below the soil under the perched groundwater. MPCA said it was not

sure how excavated soil which required additional treatment would be handled, but it would

have to approve a method for handling this material. MPCA mentioned that Turner had

CBCA 385

prepared two preliminary conceptual remediation designs and STS was working to develop

a plan, and MPCA said it would continue to work with everyone to develop a remediation

plan which would address all identified contamination at the site. Exhibits 108, 115.

On June 17, Turner notified BPT that its excavation subcontractor had completed all

it could do and would stop work at the site in the afternoon. The existing perimeter

foundation walls and below grade walls had been demolished on the north, west, and south

sides of the site. None of the soil and building materials could be moved offsite as would

typically be done, due to the remediation issue not being resolved. The materials should

have been removed and Turner should have begun bulk excavation on June 13, but it could

not do so until the remediation and indemnification issues were resolved. Exhibits 109-10,

115, 124.

STS drafts a work plan and construction activities occur (June 17 - July 5)

On June 17, 1994, STS provided MCDA, TLPA, Sverdrup, GSA, and BPT with a

work plan for the remediation effort. The work plan contained four and one-half doublespaced pages of text. It said in areas where contaminated soils and groundwater were

present, caissons would be installed in accordance with a procedure developed by GME.

It explained how contaminated spoils from the caisson installation would be handled. The

work plan gave several options for underpinning at the southwest corner of the Flour

Exchange Building, pointed out there were environmental concerns in the area of the

underpinning, and said the underpinning had to tie into the groundwater flow cutoff wall

which was to be constructed east to west most of the way across the site. The work plan also

said elevator shafts to be constructed within or near the contaminated area would be

surrounded by a groundwater control wall in order to allow construction to occur. STS

recommended the installation of an underslab vent system beneath the electrical vault and

occupied spaces below ground. STS described this system as consisting of four-inch

perforated pipes installed fifteen feet apart under the slab, and said the system would provide

passive venting when connected either to the parking garage area or the exhaust vent system.

Regarding the perimeter drain lines, STS recommended venting the sump into which the

drain lines emptied, although it did not expect any vapors or contaminated water would enter

the drain lines. Exhibit 111.

Also on June 17, STS sent MCDA the specifications for the grout cutoff wall to be

installed across most of the site running east to west in order to impede groundwater from

flowing into the south part of the site, and to be installed around the elevator shafts. STS’s

document was one which MCDA could use to solicit bids for the construction of the wall,

which it did. Exhibits 112, 528.

CBCA 385

GSA, MPCA, MCDA, BPT, Turner, GME, STS, TLPA, and Sverdrup met on

June 24, 1994. The purpose of the meeting was to review STS’s June 17 work plan, to

discuss the issue of indemnification, and to discuss how to allow construction activity to

continue. MCDA had not shown GSA its solicitation for construction of the grout cutoff

wall before it issued the solicitation. GSA said it would not agree to take a piecemeal

approach to remediation and wanted to review and approve a complete remedial design

package. GSA emphasized that the remediation work had to be coordinated with the

construction schedule and said the remediation issue needed to be resolved because of the

effect on the schedule. GSA also said it did not want to move ahead with a remediation plan

until the issue of vapors accumulating in the building was addressed. Exhibit 115.

MPCA said it was not concerned with the issue of vapor control and would have no

comment on this. MPCA also said it was only obligated to comment on issues related to

contamination, and was not concerned with work in areas where no contamination had been

discovered. It said its June 16 letter to MCDA addressed caisson construction and the

removal of soil from the site, and that it had commented on action levels for the site,

monitoring requirements, and the sampling of excavated material. MPCA said it had given

as much approval – although, it noted, it did not want to use the word “approval” – as was

required for the remediation of the site. Exhibit 115.

At the June 24 meeting, Turner explained what work it had performed and how it had

been affected by the lack of remediation. Turner needed to work in the north part of the site

where contamination had been found and where the courthouse would be located. Turner

said it would not continue to work without the indemnification issue being resolved. This

issue could not be addressed at the meeting because MCDA had not drafted any

indemnification language, but it said it would do so by June 27. Turner also explained it

could not drive piles into bedrock on the west side of the site because it had not been told

it was permitted to do so. MPCA said it had no objection to Turner driving piles along the

west side of the site. The attendees at the meeting also discussed how contaminated soil

could be hauled from the site and MPCA clarified its requirements for this work. Exhibit

115.

At this meeting, STS said it could provide a more complete remediation plan if it had

structural drawings, but it understood drawings had not yet been developed by BPT. GSA

noted that STS had been given access to the available project drawings. Sverdrup pointed

out that, even without complete drawings, STS should be able to develop typical details of

a remediation design. Sverdrup also thought MPCA should be willing to put in writing its

position that contaminated soils and groundwater could be left in place on the site because

its regulations were not completely clear regarding this point. MPCA said it had allowed

CBCA 385

contaminated soils and groundwater to remain in place on other sites and would not provide

a written statement such as the one requested by Sverdrup. Exhibit 115.

Regarding STS’s June 17 work plan, the attendees at the June 24 meeting agreed it

explained the special procedure for caisson construction in contaminated areas. They also

agreed the remediation plan should include an excavation plan to show which soils would

have to be removed and which soils could remain in place. Regarding underpinning of the

Flour Exchange Building, STS said it did not know enough about the proposed

underpinning system to be able to explain how to tie in the groundwater flow cutoff wall,

and the design of the cutoff wall was briefly discussed. Regarding the building’s drain line

system, BPT said it had not yet developed the details of the system and STS said it could not

comment on how the system could be affected by the contaminated materials which would

remain at the site. As for elevator shafts, STS said it saw on the drawings that three shafts

would need to be constructed in an area containing contaminated materials. The meeting

attendees felt STS could provide BPT with sufficient details so the shafts could be

constructed. Regarding underslab venting, Sverdrup thought it should be installed beneath

all below-grade rooms. BPT said it would install the pipe as suggested in STS’s work plan

and vent it into the parking garage. Although MPCA said earlier in the meeting it would

have no comment on the issue of vapor control, during the discussion of vapor control

MPCA said it would be “the responsibility of MCDA to pay for any and all costs related to

the installation of an active vapor control system.” STS agreed to revise its work plan for

everyone to review on July 6. Exhibit 115.

GSA drafted a letter during the June 24 meeting and sent it to BPT. The letter said

Turner could continue its pile driving operations along the west side of the site. Also, GSA

asked BPT if it would allow MCDA to remove contaminated soils from the site for storage

and treatment. GSA suggested BPT agree to do this because it would help preserve the

construction schedule and MPCA had not objected to STS’s proposed methods for

monitoring soil excavation. Exhibit 116.

Turner said it would resume installation of the pile and lagging retention system along

the west, south, and east sides of the site, and would begin bulk excavation and removal of

non-contaminated soils. It also agreed to excavate contaminated material and load it into

trucks provided by MCDA. Turner said it would agree to do these things with the

understanding that some sort of indemnification agreement would be in place by July 9, and

that STS would be on site to monitor the excavated soils. Turner said it would be ready to

install caissons beside the Flour Exchange Building in two weeks, but could do so only if

a soil remediation plan and indemnification agreement were in place. Turner also said it had

experienced delays that could affect its schedule and costs. Exhibit 117.

CBCA 385

On June 27, an attorney for the City and MCDA sent proposed indemnification

language to the attorneys for BPT, Turner, and GSA. MCDA was willing to indemnify BPT

and Turner, but no one else. Exhibit 528.

GME completed a geotechnical report for BPT on June 28. The report described the

construction planned for the site, the topography, the geology, the soil conditions, the

groundwater encountered, and other features of the site. GME’s report said the remediation

plan being developed by STS was much the same as BPT’s Alternative B. GME explained

that, based upon MPCA stating at the June 24 meeting that contaminated soil could be left

in place along the Flour Exchange Building, the west wall of this building would need

underpinning only at its southwest corner where it was near the new courthouse, and would

not need underpinning all along its west wall as described in Alternative B. Also, instead

of isolating the north part of the site as described in Alternative B, the plan being developed

by STS would contain a grout wall which would run from east to west across most of the site

in order to isolate the part of the site where contaminated groundwater was found from the

part of the site where deeper excavation was to take place, and would contain cutoff walls

around the elevator pits in the north part of the site. Exhibit 120.

Turner returned to work on June 30 in areas not affected by contamination. Exhibit

124. On July 1, Turner informed BPT that the STS remediation plan was not scheduled to

be approved until July 15, which suggested to Turner that MCDA did not fully understand

the urgency of the situation. Turner also said that due to liability concerns, it was not going

to be able to load contaminated material into MCDA trucks until a remediation plan was in

place. Turner told BPT that the time for submitting bids to MCDA to construct the grout

wall expired without anyone submitting a bid. Exhibit 121.

Turner and BPT reviewed the STS work plan and provided GSA with a list of

comments on July 5. Turner and BPT thought the remediation plan should provide

procedures for how to handle contaminated groundwater and soils, assign responsibility for

emergency response and quality assurance, set out training and health safety requirements,

and explain the logs and reports which would need to be prepared in connection with

excavation and construction. Exhibit 123.

STS continues its work and construction activities occur (July 6 - 25)

On July 6, 1994, STS provided MCDA with its “Construction Soil Remediation

Plan,” which was a substantial revision of its June 17 work plan. This construction plan

contained nearly eleven double-spaced pages of text. Section 1 of the construction plan

covered general excavation work. STS said the air sparging and ventilation system had

partially remediated the conditions at the site, and STS anticipated there would be limited

CBCA 385

areas of contaminated soils encountered. Soils would be classified according to the levels,

if any, of petroleum they contained, and then handled in accordance with MPCA’s

February 28 and June 16, 1994 letters, which STS attached. STS also attached a diagram

prepared by Ericksen which showed the anticipated depths of excavation, and STS drawings

which showed the estimated extent of contamination at the site. Section 1 included a

decision tree which showed how to determine the proper method for handling soils. It also

explained how trucks hauling soils would be tagged according to their contents and how the

air would be monitored, and contained requirements for reporting and site safety. Section

2 consisted of STS’s June 14 letter, which dealt with the installation of piles and lagging.

Section 3 covered caisson installation and was nearly identical to STS’s June 17 work plan.

Section 4 covered underpinning at the Flour Exchange Building and was much the same as

the work plan. It referred to the underpinning mentioned in BPT’s best and final offer.

Section 5 covered the groundwater flow cutoff wall and elevator shafts. In addition to the

information contained in the work plan, this July 6 plan contained STS’s specifications for

the cutoff wall and several STS drawings related to the cutoff wall. One drawing showed

the cutoff wall beginning near the southwest corner of the Flour Exchange Building and

extending slightly to the south and to the east, as well as west most of the way across the

site. The plan said three groundwater cutoff walls would also be constructed to surround

each of three elevator pits. Section 6 covered the electrical vault and occupied basement

areas and was much the same as the work plan, except it provided a typical detail of the vent

system and also called for placing a vapor barrier directly below the floor concrete. Section

7 covered drain lines and was the same as the work plan. Section 8 covered groundwater

handling and said the only place contaminated water would be found was in the elevator

pits. STS suggested either having this water removed by someone authorized to do such

work or mixing the contaminated water with clean soils and then treating the soils as if they

were contaminated. Exhibit 125.

By July 6, Turner had installed sheet pile and lagging along the north side of the site

and two-thirds of the way along the west side of the site. Concrete rubble from demolition

was piled in the middle of the site and soil was stockpiled at the south end of the site.

Turner began bulk excavation in the south part of the site on July 6, and its excavation

subcontractor hauled the excavated material to a location where the Minnesota Department

of Transportation (MDoT) needed fill dirt. Shortly before noon on July 7, MDoT stopped

Turner’s subcontractor from depositing the excavated materials because MDoT was

concerned that the soil was contaminated. After MPCA called MDoT, MDoT agreed to

accept the excavated material if it received an explanatory letter regarding the soil. There

was no hauling of excavated materials on July 8. By then, Turner had installed sheet pile

along most of the west side of the site. Exhibits 126, 528.

CBCA 385

There was a meeting at the job site on July 12 to discuss the procedure for excavating

and removing material so Turner could resume its excavation work. STS agreed it would

be at the site whenever excavation occurred and would test and monitor material at the site.

GME would monitor and test the material at the MDoT site and would complete a manifest

for each load. Turner agreed to meet with MDoT on July 13, to explain this process so

hauling could resume. Excavation and hauling began again on July 14. During excavation,

perched water was encountered at a higher elevation than expected. Exhibits 127-28, 528.

Sverdrup reviewed STS’s July 6 construction plan, which it understood to be an

option in addition to those presented by BPT. Instead of being based upon MPCA’s

approval of a remediation plan, Sverdrup noted, the STS construction plan relied upon

MPCA’s lack of disapproval of leaving contaminated soil and water in place. Sverdrup

reviewed the construction plan in order to determine the degree to which it mitigated the

risks of leaving such material in place. Sverdrup was not convinced the STS construction

plan accounted for all of the contaminated areas at the site, and the levels of contamination

in the groundwater remained above the recommended regulated concentrations. The most

likely risk of leaving contaminated groundwater and soil in place was the presence of vapors

during and after construction. Sverdrup felt the remediation plan ought to include more

specific requirements for air monitoring during construction. Sverdrup also felt the cutoff

wall needed to be extended and the remediation plan ought to provide additional details

about elevator shaft construction. It also made suggestions for adding details about the vent

system and the drain lines and said the remediation plan should explain what would happen

if contaminated water entered the drain lines. Exhibits 129, 132.

GME also reviewed STS’s July 6 construction plan. GME understood GSA wanted

“zero impact” from environmental concerns. However, such a result could not be obtained

unless all contaminated material was removed from the site. GME recommended that GSA

and BPT aggressively pursue indemnification if contaminated material was to be left in

place. Like Sverdrup, GME was not convinced the STS construction plan identified all of

the areas of contamination at the site. Also, GME did not believe MPCA would allow

remediated soil to be handled as non-contaminated soil, which was something the STS

construction plan permitted. GME recommended keeping a record of all soil removed from

the site. In addition, GME did not agree with STS’s idea for monitoring of vapors during

construction because the standard of exposure STS proposed to use was not a standard

imposed by any regulatory agency. GME recommended redesigning STS’s proposed

underslab vent system to improve the flow of vapors and thought the system might need to

be installed under the entire building and be designed so it could be converted from a

passive system to an active system. GME noted the STS construction plan did not include

any method for dealing with contaminated groundwater if it entered the perimeter drain line

system, and GME thought the remediation plan should assume this could happen. Also, STS

CBCA 385

needed to explain what to do if contaminated ground water was encountered unexpectedly

during construction. Exhibit 131.

In a July 14 conference call, GSA, Sverdrup, MPCA, TLPA, STS, GME, MCDA,

BPT, and Turner, discussed the July 6 STS construction plan. GSA said the plan was

incomplete and, therefore, not acceptable. STS said it would resolve one of GSA’s concerns

by revising a drawing which showed the areas of contamination at the site. GSA said its

largest concern was that contamination was going to be allowed to remain on the site. BPT

asked that the cost of insurance for the remediation work be included in the cost of the work

because it did not carry liability insurance for remediation, and also asked that

indemnification be extended to its architect. Based upon MCDA agreeing to this term, BPT

said it would develop a price for the July 6 STS construction plan during the week of

August 1. As of July 14, BPT had experienced a thirty-day delay to its construction

schedule. Exhibits 133, 531, 537.

BPT, Turner STS, MPCA, MCDA, attorneys for the City and MCDA, GSA,

Sverdrup, and GME met on July 19. GSA’s goal was to get the construction project back

on schedule and moving forward, and resolve differences of opinion about delays and price

later. GSA explained how it thought the process of remediating the site was supposed to

occur. To begin, MCDA would develop a remediation plan and BPT would propose a price

for implementing the plan. Then, the City and MCDA would deposit their funds with GSA

and BPT would begin to implement the plan with the final price to be determined later.

Following this, GSA would negotiate a final price with BPT, and MCDA and GSA could

debate whether the price was too high. GSA wanted to know whether MCDA was prepared

to follow this process. GSA was concerned that if MCDA decided it did not like BPT’s

price proposal for the STS construction plan, it would want to develop yet another plan and

create additional delay. Exhibits 133, 137-38, 532-33.

At the July 19 meeting, BPT said it was prepared to provide a proposed price for the

STS construction plan based upon an indemnification agreement being in place. The City

felt that due to BPT’s increasing demands regarding indemnification, delays related to the

indemnification issue were not the City’s responsibility. GSA disagreed. GSA said

indemnification of BPT had been a part of the process from the time GSA agreed to allow

MCDA to formulate a plan in addition to the BPT alternatives. GSA said the City originally

had an obligation to turn over a clean site. When this did not happen, GSA issued a request

for proposals to ask BPT for a remediation design. When the City and MCDA objected to

the costs associated with BPT’s proposed designs, GSA agreed to allow STS to design a

plan, provided MCDA would work with BPT to see if they could agree upon a suitable

indemnification arrangement. Because BPT would not be designing the plan it would be

asked to implement, it wanted to be indemnified. GSA and GME pointed out that if all of

CBCA 385

the contaminated soil and water were removed as BPT proposed to do, there would be no

potential for future migration of contamination and no need for indemnification. When

MCDA said it would need to examine BPT’s claims for delay and the cost of the delay, GSA

stressed that this needed to occur after it told BPT to proceed with the work. Otherwise, the

delay would continue to grow. Exhibits 133, 137-38, 532-33.

MCDA asked if BPT would be more comfortable if the July 6 construction plan said

contaminated soil below grade would be totally encapsulated. After some discussion, the

group concluded there were problems with this approach because the encapsulated layer

would be penetrated by caissons and elevator shafts, and because vapor emissions would not

be controlled. Also, there would need to be a procedure developed for encapsulating the

contaminated soil and BPT would have to provide a price for this work, which would take

time. Also, GSA said if certain areas within the site were defined as contaminated and then

sealed, MPCA ought to be willing to say the rest of the site was not contaminated and did

not need to be tested. MPCA said it absolutely would not agree to this because although

there were some areas it was relatively sure were contaminated, there were other areas about

which it was unsure. GSA stressed that its main concern with MCDA’s suggestion was

time. Time was money, according to GSA, and to introduce another plan might produce

something which was cheaper to construct, but more expensive overall because of delay

costs. Exhibits 133, 137-38, 532-33.

The participants in the July 19 meeting discussed the July 6 STS construction plan.

BPT said it expected to receive a document which was a complete remediation plan authored

by STS, not an STS plan which referred to documents and letters and drawings prepared by

others. GSA and BPT thought STS had been working to develop a remediation plan which

contained its own design and which included the details needed to implement the plan and

remediate the site. STS said it did not have all of the information it needed to design

something that would, for example, tie into the new building, because most of BPT’s

design/build drawings had not yet been developed. BPT and GSA pointed out, however,

that there were some things BPT could not design until it knew what STS had planned.

Exhibits 133, 137-38, 532-33.

Regarding the specifics of the July 6 STS construction plan, STS agreed to remove

references to GME and BPT, and to include references to GSA only if needed for clarity.

It also agreed to revise a drawing contained in section 1 of the plan to show contaminated

soils where all of the underground storage tanks had been located and to clarify the affected

area near the Flour Exchange Building. Also, it would modify the decision tree contained

in the plan and the truck tagging procedure. In addition, it would include benzene as a

substance to be monitored. Regarding caissons, MPCA said the special installation method

would need to be used in areas of perched groundwater, even if this was outside the area of

CBCA 385

contaminated soil. MPCA also said STS’s plan should specify precisely which caissons

would need to be specially installed and which could be installed conventionally. STS said

it would remove references to BPT’s plan for underpinning the Flour Exchange Building.

Regarding the cutoff wall, MPCA recognized BPT’s concern about contaminated water

flowing around the end of a wall which did not extend completely across the site, and

acknowledged the advantage to be gained by extending the wall completely across the width

of the site. MPCA did not say, however, that running the wall completely across the site was

necessary. BPT said it would provide a price for extending the wall completely from the

east to the west side of the site and would also provide a price for making the cutoff wall a

structural element of the building. In addition, the parties concluded the description of the

wall would be modified to show it would be pinned to rock if there was no clay layer. As

for the vent system, STS would refine its design and prepare one which could shift from

passive to active operation. In addition, a contingency plan was needed for handling

contaminated groundwater which might infiltrate the south part of the site. Exhibits 133,

137-38, 532-33.

On July 20, BPT provided STS with its tentative architectural; structural; heating,

ventilating, and air conditioning; and plumbing drawings for the project. Exhibit 134.

On July 25, BPT wrote to GSA to say it had not received a revised drawing from

MCDA which had been approved by MPCA and which showed contaminated and noncontaminated areas of soil at the site. Until BPT received this drawing, it could not begin

excavating again. Work was continuing on the pile and lagging along the south side of the

site, but it was proceeding at an inefficient pace because soil could not be hauled away and

had to be pushed aside in order to keep the operation moving. Exhibit 136.

STS revises its plan and others provide comments (July 26 - August 5)

On July 26, 1994, STS sent MCDA its “Environmental Construction Plan,” which

was a fairly extensive revision of the July 6 version of the plan. This construction plan

contained fourteen double-spaced pages of text which did not refer to GME or BPT, and it

attached drawings prepared only by STS. Section 1 of the revised plan addressed the

excavation of contaminated soils in considerably more detail than did the July 6 version of

the plan. It also referred to a revised decision tree for determining how to handle excavated

soils and contained a procedure for tracking soils transported from the site and for preparing

required reports. The information contained in the revised plan regarding site safety was

substantially the same as that contained in the July 6 construction plan. The revised plan

attached a revised STS drawing which showed the estimated extent of contamination at the

site and added an affected area along the west side of the site. Section 2 of the revised plan

addressed caisson installation and provided more specific information about where the

CBCA 385

specially installed caissons would be needed than did the July 6 construction plan. Section

3 of the revised plan addressed the groundwater flow cutoff wall. It attached a drawing

which showed the wall beginning near the southwest corner of the Flour Exchange Building

and extending south and then to the east, much the same as the July 6 plan. However,

instead of running directly across the site to the west, the July 26 plan showed the wall

heading northwest, completely surrounding all three elevator pits, and terminating several

feet more to the west than it did in the July 6 construction plan. The length of this cutoff

wall was a little more than 75% of the distance around the perimeter of the entire north part

of the site. The revised plan stated the cutoff wall was not a structural wall. It also

explained how to handle contaminated groundwater encountered within the elevator pits and

encountered unexpectedly elsewhere. Section 4 discussed underpinning the southwest

corner of the Flour Exchange Building, but did not discuss any of BPT’s plans for

underpinning. Section 5 of the revised plan covered underslab venting and expanded quite

a bit upon the July 6 plan’s discussion of occupied basement areas. The revised plan

explained where to place the vent system and proposed to tie the vent system into the

building’s drain line system in order to allow for venting the drain lines. The revised plan

did not contain a discussion of the installation of piles and lagging, which had been included

in the July 6 plan. Exhibit 139.

In a teleconference which occurred on July 27, MCDA told GSA and Sverdrup the

revised STS plan was available. MCDA also expressed some frustration that STS was being

asked to hit a moving target. GSA reminded MCDA that any remediation plan had to be

detailed and specific and approved by GSA. MCDA thought GSA was focusing too much

on potential problems. GSA said the agreement between the parties presumed there would

be a clean site and GSA’s position reflected responsible building management. Exhibit 141.

Also on July 27, an attorney for the City and MCDA sent a revised draft of the

indemnification agreement to GSA and BPT. This draft included BPT’s architect within the

coverage extended by the agreement. Exhibit 144. On July 28, MPCA approved MCDA’s

plan to use contaminated excavated soil as controlled fill in the construction of a parking

area in a nearby town. MPCA also agreed with an STS letter dated July 22, which described

the boundaries of the contaminated areas within the site. Exhibit 146.

On July 28, Sverdrup provided TLPA with comments on the July 26 STS revised

plan. Most of Sverdrup’s concerns were that the STS revised plan contained unclear or

open-ended statements and did not always state exactly what work was supposed to be done,

who was supposed to do the work, or what standards were to be applied to work which was

performed. In addition, Sverdrup found some errors in the STS revised plan. Exhibit 145.

CBCA 385

On July 29, STS, MCDA, an attorney for the City and MCDA, MPCA, Sverdrup,

GSA, TLPA, Turner, and BPT met to discuss the Sverdrup comments on the July 26 STS

revised plan. MPCA said it had not yet reviewed the revised plan. In addition to agreeing

to make a number of clarifications and corrections to the revised plan, the meeting attendees

agreed the plan should refer to the MPCA standard which would be used to screen soils at

the site, should define more precisely the estimated area of contamination, and should state

explicitly how STS would differentiate between possibly contaminated fill, clean fill, and

other soils. They also agreed the plan needed to address how contaminated ground water

would be handled and to say MCDA would provide a truck to haul away such water if it was

encountered. In addition, they agreed the plan should say STS would prepare the reports

required by the plan, including the reports regarding the special installation of caissons.

They also agreed the plan would be revised to recognize that the construction schedule could

require expanding the area where the special installation of caissons would be required and

to recognize that the plans for the groundwater cutoff wall might need to be adjusted during

construction. Also, the location of the stack for the underslab vent would have to be

coordinated with BPT’s architect. During this meeting, it came to light that there were

apparently two plans being circulated.3 One had been supplied to GSA and BPT, and a

second plan to MPCA for approval. Confusion as to which plan was intended needed to be

resolved. STS said it would revise its plan within twenty-four hours after receiving written

comments from GSA on August 4. Exhibits 148, 150, 535.

At the July 29 meeting, MCDA asked if BPT would permit MCDA to excavate the

entire northeast area of the site, which was known to be contaminated, and haul the

excavated material away. BPT was willing to allow MCDA to do this, but said it would

need a day or two to get its equipment out of the way. The attendees agreed Turner would

mark the bounds of the contaminated area and then MCDA would begin work. They also

agreed to keep track of the number of truck loads of material which MCDA removed.

Exhibit 535. On August 1, BPT explained to GSA that it would not be possible for MCDA

to begin removing material, after all. BPT said everyone at the July 29 meeting apparently

had forgotten the caissons would have to be installed next to the Flour Exchange Building

before the contaminated soil in the northeast area of the site could be excavated. BPT said

it would proceed to install the caissons even though there was no approved remediation plan

which contained directions for the special installation of caissons. BPT did this based upon

the statements MPCA had made at the July 29 meeting. BPT also said it would begin

hauling non-contaminated soils from the site during the current week. This work could

resume because it received a copy of MPCA’s July 28 letter to STS which agreed with

The presence of a second plan is confirmed in a letter dated August 23, 1994,

written by MCDA and sent to GSA. Exhibit 180.

CBCA 385

STS’s description of the boundaries of the contaminated areas within the site. Exhibits 149,

154.

On August 1, BPT told GSA it was developing a schedule which would bring the

project nearly back on schedule by the end of 1994. Also, it was preparing a pricing

proposal for the July 26 STS construction plan. The proposal would include all design,

construction, and delay costs, and would assume an indemnification agreement was in place

and work could begin by August 15. Exhibit 149.

On August 4, GSA provided MCDA with its written comments about STS’s July 26

revised construction plan. The comments contained a summary of how GSA, Sverdrup,

GME, BPT, and Turner understood the issues discussed at the July 29 meeting had been

resolved. Also, the comments contained some issues and questions which they thought

deserved to be considered by STS when it revised its plan. Some of these issues and

questions related to the basis for STS’s design of the underslab vent system and others

related to the July 26 revised plan’s omission of a discussion about the sheet pile and lagging

system. Exhibits 152-56.

STS prepares its final plan and caisson installation begins

On August 9, 1994, STS transmitted a copy of a revised environmental construction

plan which it said included revisions in response to GSA’s August 4 comments. Exhibit

161. On August 10, GSA told MCDA it had received the August 9 STS plan and, after

spending a short time glancing at it, realized it did not incorporate all of GSA’s August 4

comments. GSA said it would circulate the August 9 STS plan and try to provide MCDA

with comments by August 11. GSA also noted the indemnification issue had not yet been

resolved. GSA told MCDA the cost of the construction delay would continue to rise

dramatically in relation to the cost of the actual remediation effort if the issues related to the

remediation plan and indemnification were not resolved. Whatever savings the city secured

by rejecting BPT’s plans had been offset by delay costs, said GSA, so little real savings were

achieved. In order to minimize further delays, GSA asked that the City and MCDA deposit

the amount of BPT’s projected costs ($4,358,023)4 with GSA so that GSA could issue a

contract modification to BPT as soon as GSA received an acceptable remediation plan and

the indemnification issue was resolved. GSA noted its increased management costs were

not included in BPT’s projected costs, and said the final cost of the contract modification

would be negotiated later. Exhibit 163.

fact.

The derivation of this figure is discussed in the next section of our findings of

CBCA 385

On August 11, MPCA finished its review of the August 9 STS plan. MPCA did not

either give or withhold its approval of the plan. Rather, it said it did not object to the

implementation of the plan. MPCA also said the plan was consistent with its “verbally

established goal” of removing contaminated soil from the site, and with its February 28 and

June 16, 1994 letters to MCDA. MPCA emphasized it had not reviewed the sections of the

plan which addressed site safety and underslab venting because MPCA said it had no

authority to regulate these areas. However, MPCA also said, “as with any potential

development of a contaminated property, special consideration should be taken in the design

of the building in order to not allow for the potential migration to, and accumulation of

organic vapors inside the future structure.” MPCA said it understood section 5 of the STS

plan addressed “an organic mitigation plan designed to be implemented with the

development of the courthouse.” Exhibit 168. It was within MPCA’s authority to survey

and monitor structures in order to determine whether vapors from existing contamination

were affecting the structures. It was not within MPCA’s authority, however, to require

someone to construct a safe building. As MPCA’s representative recognized, someone

constructing a building could either take vapor migration into account during construction

or be liable for the consequences of not doing so. Transcript at 279-81, 285.

On August 12, Sverdrup provided GSA and TLPA with comments which resulted

from reviewing the August 9 STS plan. Sverdrup’s comments noted omissions from the

plan and discussed the revisions which STS made to the July 26 plan. For example,

Sverdrup understood GSA had not been consulted about STS’s decision to include in the

plan an elevation which would separate one class of soils from another in order to show the

estimated area of contamination. Sverdrup explained there were several problems with the

elevation included by STS in the August 9 plan and said a more reasonable elevation should

have been selected. Many of Sverdrup’s comments pointed out where statements contained

in the STS plan were vague or open-ended, and Sverdrup made suggestions as to how the

statements could be revised. Some of Sverdrup’s comments pointed out differences between

the revised text of the plan and the content of the drawings which were a part of the plan.

Also, Sverdrup noted the August 9 STS plan did not address the procedures to be used when

driving piles in contaminated areas. Exhibit 170.

GSA gave Sverdrup’s comments to MCDA on August 12. GSA reminded MCDA

that the remediation plan had to be approved by GSA, and told MCDA the STS revised plan

was unacceptable and needed to incorporate Sverdrup’s comments. Exhibit 536.

On August 23, MCDA sent STS’s revised environmental construction plan, dated

August 22, to GSA. Exhibits 177, 180. On August 25, STS sent GSA a few pages which

contained minor revisions to the August 22 plan. Exhibit 182. The August 22 plan, as

CBCA 385

amended on August 25, satisfactorily incorporated GSA’s August 12 comments. Exhibit

188.

On August 26, GSA approved the August 22 STS plan, as amended on August 25.

GSA said its approval was contingent upon approval by MPCA, and explained that after

MPCA approved the plan, GSA would ask BPT for a proposal to implement the plan. Also,

GSA said it would not issue a contract modification to BPT until MCDA deposited the

funds to pay for the modification. Exhibit 183.

MPCA wrote to MCDA on August 26, and said it had completed its review of the

STS plan dated August 22, as amended on August 25. As it had done on August 11, MPCA

neither gave nor withheld its approval of the plan. Rather, it said it did not object to the

implementation of the plan. Exhibit 185.

While the STS plan was being finalized, reviewed, and approved, Turner resumed

its construction activities. On August 10, BPT told GSA that Turner would soon begin

installing five caissons next to the Flour Exchange Building using the special installation

method authorized by MPCA in its June 16 letter to MCDA. Exhibit 165.

Turner began installing the first caisson on August 15 and encountered a problem

almost immediately. The STS plan called for augering through the sand layer until saturated

sand was reached. Then, bentonite would be added to make a slurry, the auger would be

advanced one foot into the clay layer, a temporary casing would be installed, and the clay

layer would be penetrated to bedrock. The bentonite was meant to seal the caisson to

prevent contamination below the clay layer. When Turner followed these procedures as it

began drilling a caisson in the contaminated area next to the Flour Exchange Building, water

seeped into the caisson and rose to a depth five feet. At 7:45 the following morning, Turner,

BPT, and the STS technician on site tried to contact someone from STS to come to the site

and offer a solution to the problem. At 4:00 in the afternoon, an STS representative came

to the job site and met with Turner, BPT, Sverdrup, and MPCA. On August 17, STS

provided MCDA, Turner, BPT, Sverdrup, and MPCA a written recommendation for

effecting a seal between the sand and the underlying bedrock in the first caisson, and a

procedure for installing the remaining caissons. Exhibits 172, 501, 538.

During August, 1994,while the STS plan was being reviewed and finalized, and

while BPT was attempting to continue its construction activities, discussions regarding

indemnification continued without the issue being finally resolved. Exhibits 169, 174-176,

191, 501, 541.

CBCA 385

Consideration of price and delay issues before the STS plan was approved

On August 8, 1994, Turner sent BPT its response to the July 26 STS plan. Turner

explained which construction activities it would complete, how it would accelerate its work,

and the assumptions it made when it calculated the time and cost of each activity. Assuming

it would be able to begin work on August 15, 1994, Turner said the delay in receiving a

remediation plan caused an overall delay of fifty-two calendar days and the work required

by the July 26 remediation plan added twenty-four more days to the critical path schedule.

Turner thought it could accelerate its work and recover all but fourteen days of the delay by

the end of 1994, and work extended hours in order to recover the remaining fourteen days

by November 1, 1995, and it explained how it would accomplish this. Turner also provided

a detailed description of the costs it would incur to regain the schedule, the costs of

implementing the remediation plan, and how it would accomplish these things. The total

cost was $3,198,000, which included $403,000 for the direct cost of remediation activities;

$1,677,000 for recovering the schedule; $450,000 for Turner’s increased extended general

conditions costs (direct field office overhead); $52,000 for subcontractor remobilization and

inefficiency; $125,000 for remediation operations insurance; a $200,000 contingency for

acceleration, supervision, and support; plus a markup (profit and home office overhead) of

$291,000. Exhibit 159. Overall, BPT thought Turner’s approach was good. BPT made a

number of comments to Turner, however, and asked for specific information regarding some

of Turner’s proposed activities and costs. Exhibit 160.

On August 9, BPT sent GSA a summary of the costs it would incur in order to

implement the July 26 STS plan and regain the schedule. The total was approximately $4.3

million. In addition to Turner’s costs of $3,198,000, BPT included its architect’s costs

($45,672), GME’s costs ($155,000), legal fees ($28,000), insurance ($175,000), and BPT’s

overhead and profit ($756,351). BPT said in order to proceed, it needed an approved soil

remediation plan and indemnification for itself, its architect, and Turner. Also, GSA would

have to issue another request for proposals to perform the work required by the STS plan

(which BPT referred to as RFP 1A) and then issue a contract modification with the price to

be determined later. Exhibit 162. At GSA’s request, BPT subsequently separated which of

these costs it considered remediation costs ($1,395,943) and which it considered acceleration

costs ($2,962,080). Exhibit 171.

On August 19, BPT told GSA that progress on critical construction activities was at

a standstill. BPT said Turner had installed the retention system and one caisson according

to the STS plan. Excavation had started and stopped twice due to lack of proper delineation

of contaminated areas and lack of an approved plan to show to those who might be able to

receive excavated materials. BPT’s August 9 prices were premised upon BPT receiving a

CBCA 385

notice to proceed by August 11, which did not happen, so the pricing plan would have to be

revised. Exhibit 176.

An August 22 narrative, prepared by Sverdrup and based upon a project schedule

dated August 11, said there were seven items of work which needed to be added or changed

due to remediation activities. The delay to the critical path amounted to forty-two calendar

days. The direct costs associated with the work and the delay amounted to approximately

$2.2 million, including extended general conditions costs. Exhibit 178; Transcript at 457.

If, however, the notice to proceed was not issued until September 30, the delay to the critical

path would amount to eighty-four work days, and the direct costs associated with the work

and the delay would amount to approximately $3.4 million. Exhibits 179, 197. Two weeks

later, BPT estimated the delay would amount to an additional 125 calendar days, which

amounts to 84 work days (125 x 2/3). Exhibit 194.

When MCDA sent the August 22 STS plan to GSA on August 23, MCDA said it was

responsible only for the excavation and foundation construction matters covered by the plan.

According to MCDA, the manner in which the plan addressed these matters had remained

“materially unchanged” since July 6, and MPCA had given its “conceptual approval” before

July 6 for carrying out activities related to these matters. MCDA said almost all of the

changes made to the plan after July 6 addressed matters which were not MCDA’s

responsibility and therefore MCDA could not be responsible for any delay to the project

caused by such changes. Exhibit 180.

On August 25, Turner put BPT on notice, once again, of the delays it was

experiencing due to the lack of an approved environmental remediation plan and what it

called “evolving” site conditions, including the conditions encountered during caisson

installation. Turner said it was in the process of preparing a logistical plan which would

allow it to deviate from its planned approach and perform work out of sequence. Exhibit

181.

Consideration of price and delay issues after the STS plan was approved

On August 26, 1994, GSA sent RFP 1A to BPT. RFP 1A required BPT to perform

all work necessary to implement the STS plan. GSA asked BPT to provide a response

within ten work days and to include an itemized cost breakdown. Exhibit 186. GSA also

told BPT that both GSA and MPCA had accepted the STS August 22 remediation plan, as

amended on August 25, and said to use the plan as the basis for responding to RFP 1A.

Exhibit 184.

CBCA 385

Also on August 26, MCDA told GSA it was “imperative to commence construction

immediately.” In order to achieve this, MCDA proposed to deposit with GSA $490,000,

which MCDA considered to be BPT’s “hard costs” of implementing the remediation plan,

installing the caissons, underpinning the Flour Exchange Building, and a few other minor

activities. In addition MCDA proposed to deposit related “soft costs” to the extent GSA

determined such costs were fair and reasonable, to indemnify BPT, Turner, and BPT’s

architect, and to begin expedited arbitration with GSA to resolve issues related to delay and

the contents of the remediation plan. Exhibit 187. At a meeting on August 29, GSA said

it could not proceed with the project in a piecemeal fashion because to do so would result

in additional delays in the future. The only way to stop delays, said GSA, was for the City

to deposit the full amount it was obligated to deposit. Exhibit 545.

On August 31, Turner again complained to BPT about its inability to accomplish any

meaningful work. Turner told BPT it had studied the possibility of performing work out of

the planned sequence of work, in an area which was supposedly not contaminated.

However, it seemed to Turner that work in the area would be quite restricted until measures

had been taken to make sure contaminants from other parts of the site did not migrate to the

area. Also, Turner would need to have someone from MCDA monitor its progress to

determine if it encountered contamination. Turner concluded it would proceed in such a

manner if GSA directed BPT to do so, although accomplishing work in this way would be

quite inefficient. Exhibit 191.

On September 2, Turner told BPT it had extended by two weeks the date for receipt

of bids for performing the caisson work, due to the lack of resolution of the soil remediation

issue. Turner also explained this extension would not affect the schedule because the date

it originally established for the submission of bids was based upon beginning soil

remediation work on August 15. Turner had decided to extend the date for receipt of bids

for performing foundation concrete work for the same reason. Exhibit 193.

Also on September 2, MCDA sent GSA a draft, preliminary analysis of the impact

of the remediation plan on BPT’s schedule. The analysis was prepared by Kellogg, a

construction consulting division of Peterson Consulting (Kellogg), which had been hired on

August 30 to perform the analysis. Kellogg’s analysis was based upon a site visit, brief

interviews with employees of MPCA and STS, and what Kellogg described as a “cursory

review” of STS’s remediation plan, a Turner schedule logic diagram, a Turner schedule

report, and Turner’s August 8 letter to BPT. Kellogg had not reviewed the project plans and

specifications, the contract between GSA and BPT, or current information relating to

progress. Kellogg concluded MCDA’s responsibility for delay depended upon whether it

could establish the existence of any concurrent delay. Kellogg noted that Turner’s August 8

letter, which set out Turner’s plan to recover most of the schedule by the end of 1994, and

CBCA 385

the remainder by November 1, 1995, was based upon Turner beginning work on August 15,

and completing critical excavation, caisson, and foundation work before winter arrived.

However, Turner had not been able to begin work on August 15, and Kellogg thought it was

questionable whether Turner would be able to regain the schedule as it had planned to do.

Kellogg said if soil remediation activities delayed the start of critical construction activities

until the spring of 1995, the resulting delay could extend the completion of the project by

up to one year. Exhibit 192.

Kellogg also provided a draft, preliminary analysis of the cost estimates set out in

Turner’s August 8 letter to BPT and the estimates set out in BPT’s August 9 letter to GSA.

In this analysis, Kellogg estimated the special installation method to be used for caissons

would extend the completion date by approximately thirty days. As for its analysis of the

Turner and BPT cost estimates, Kellogg thought BPT’s estimate of the cost of remediation

($1,395,943) was $900,000 too high. Exhibit 192.

On September 7, GSA, MCDA, Sverdrup, and Kellogg met to discuss several

subjects. GSA was very concerned because no agreement had been reached regarding

indemnification. MCDA said it had directed its attorneys to finalize an agreement and there

was supposed to be a meeting the following day to accomplish this. Also, GSA pointed out

that the STS plan might need to be changed as construction progressed due to unforeseen

circumstances. For example, it had come to GSA’s attention on the morning of

September 7, that Turner encountered contaminated soil at an elevation approximately

sixteen feet above the elevation at which the STS remediation plan said such soil would be

found. The primary focus of the September 7 meeting, however, was delay and price issues.

Exhibit 197.

GSA had prepared a price estimate which it believed was fair and reasonable, and

GSA had reviewed the Kellogg price estimate. GSA wanted to come to an agreement with

MCDA at the September 7 meeting regarding an estimate so GSA could negotiate a price

with BPT. According to GSA’s price estimate, if the notice to proceed was issued on

September 30, the delay to the critical path to completion of construction would amount to

eighty-four work days and the cost of performing the work, including extended general

conditions costs, would amount to $2,233,033. GSA’s notes of the meeting list each

category of costs contained in the GSA estimate and state for each item whether the parties

agreed to use the estimate as the basis for price negotiations with BPT. With only a few

exceptions, they agreed to use the estimate as the basis for negotiations. They agreed GSA

would examine BPT’s actual costs of insurance, legal fees, and settlements reached with its

subcontractors for remobilization. In addition, they agreed some of the costs included in the

GSA estimate might be eliminated by an indemnification agreement. Also, they agreed the

GSA estimate of BPT’s daily general conditions costs would be the upper limit used by GSA

CBCA 385

as the basis for its negotiations with BPT, and Kellogg would be available to assist GSA

during negotiation of the general conditions costs. Regarding the GSA estimate of eightyfour work days of delay, MCDA reserved the right to challenge the actual number of days

of delay at a later date and said it wanted to determine whether there had been any

concurrent delays. Exhibit 197.

GSA’s estimate also included an amount for TPLA’s costs and $10,000 per day for

the costs GSA (not BPT) incurred due to delay, and said there would be additional GSA

costs for management and inspection which would be determined as a percentage of the cost

of construction. At the September 7 meeting, GSA explained it could not modify BPT’s

contract until MCDA deposited its funds with GSA and the funds had been accounted for

by GSA’s finance office. Pending the outcome of negotiations, MCDA agreed to deposit

everything except the $10,000 per day for GSA’s delay costs. Exhibit 197. A few days

later, in response to a suggestion made by GSA, MCDA said it would deposit the cost of the

BPT contract modification, excluding GSA’s delay costs, by September 23, and would

reserve the right to dispute the costs after making the deposit. Exhibits 196, 552.

On September 12, BPT responded to RFP 1A. Its price was based upon several

assumptions, such as being able to begin its operations on October 3 (which would result

in a total delay of 125 calendar days) and having an indemnification agreement in place.

BPT asked for a 125 calendar day extension of the contract completion date. Its price,

which included the cost of the delay and extended general conditions costs, contained

$492,146 for its architect and structural engineer, and $3,363,000 for Turner. Exhibit 199.

Turner had resumed its excavation operations on September 8. On September 12,

STS found a localized area of “odorous soil” and sent samples for analysis. On

September 13, STS found more such soil plus contaminated soil at random locations

throughout the southwest part of the site and outside the area identified in the remediation

plan as containing contaminated soil. Turner had no place to work productively until the

conditions could be more thoroughly analyzed. Exhibits 201, 554.

Price negotiations occur, GSA accepts BPT’s proposal, and MCDA deposits funds

Price negotiations between GSA and BPT occurred on September 15 and 16, 1994.

Present were representatives from GSA, TLPA, Sverdrup, BPT, Turner, and Kellogg. An

agreement was reached on September 16 regarding the price of the construction work to be

performed by Turner. On the morning of September 17, negotiations continued and an

agreement was reached regarding BPT’s costs. On September 19, negotiations concluded

regarding BPT’s markup for profit and home office overhead. These negotiation sessions

were thoroughly documented by contemporaneous notes and a summary prepared soon after

CBCA 385

negotiations concluded by the representatives from TLPA, Sverdrup, BPT, and Turner who

participated in the negotiations. According to this documentation, a representative from

Kellogg was present during all negotiations with Turner and participated in all discussions.

As negotiations progressed, if the representative from Kellogg wanted to raise or discuss an

issue, he would confer in a separate room with a representative from MCDA to obtain input.

Kellogg and MCDA did not voice any major objections to the negotiations. Exhibits 225,

267; Transcript at 378-79, 573.

The final negotiated price was $2,292,406 plus a ninety-day extension of the final

contract completion date. The price included extended general conditions costs and did not

include other costs of the ninety-day delay or the cost of BPT’s architect or its structural

engineer. The price was conditioned upon MCDA providing indemnification and GSA

providing a notice to proceed by September 20. Exhibit 225.

The negotiated price included the following for the cost of remediation:

$ (18,000)

143,300

250,000

54,000

137,500

7,200

57,400

4,000

Credit for soil excavation and removal by MCDA

Premium for special installation of caissons

Groundwater cutoff wall at the Flour Exchange Building

Underslab venting system

Turner supervision and support (general conditions costs)

Turner insurance

Turner markup for profit and indirect overhead

Turner performance and payment bond

Exhibit 225.

The negotiated price also included the following for the direct costs of the ninety-day

delay:

$ 451,700

60,000

290,000

237,000

13,200

105,200

7,300

Exhibit 225.

Temporary heat during the 1995-96 winter

Turner’s subcontractors’ remobilization and inefficiency costs

Cost escalation contingency

Turner supervision and support (general conditions costs)

Turner insurance

Turner markup for profit and indirect overhead

Turner performance and payment bond

CBCA 385

The total of the above, which were Turner’s costs, is $1,799,800. BPT’s part of the

negotiated price included $307,828 for direct costs, including extended general conditions

costs, and a markup of $184,778. Adding Turner’s costs to BPT’s costs and markup results

in a total of $2,292,406. Exhibit 225. During negotiations, MCDA said it would construct

the cutoff wall which was to run east to west across the site, so the negotiated price

contained nothing for this wall. BPT’s proposed, non-negotiated price for the construction

of this cutoff wall had been $196,500. Exhibit 204.

On September 19, GSA sent BPT another request for proposals, RFP 1A-1, which

was a revision to RFP 1A. Essentially, RFP 1A-1 asked BPT to submit a price proposal

which conformed to the price negotiations. Exhibit 205.

Also on September 19, MCDA deposited $2,420,295 with GSA for the cost of the

construction contract modification. This amount included the negotiated amount for Turner

($1,799,800), slightly less than the negotiated amount for BPT ($474,495), $50,000 for

BPT’s architect, and $96,000 for GSA’s management and inspection costs. In addition,

MCDA said it would pay for the added insurance needed by BPT. MCDA told GSA it had

signed an indemnification agreement and was sending it to BPT for signature. Exhibits

555-56.

On September 21, BPT sent GSA its response to RFP 1A-1. The total price was

$2,292,406. Exhibit 208. On September 22, GSA accepted BPT’s September 21 proposal

for an increase in the contract price of $2,292,406 and a ninety-day extension of the contract

completion date. Exhibit 268.

Events subsequent to price negotiations

On September 22, 1994, MPCA notified GSA that the United States would not be a

“responsible party” under state law for releases from the underground storage tanks which

had been removed from the site. The letter also said GSA ought to be aware that petroleum

contamination could still be present, and development plans ought to consider activities such

as removal of soil and “the potential for vapors to enter structures.” Exhibit 557.

By September 26, 1994, BPT had obtained the additional insurance it needed and told

MCDA how to pay the premium. Also, the indemnification agreement had been signed by

MCDA, BPT, BPT’s architect, and Turner. BPT notified GSA of these events and GSA

sent BPT a notice to proceed with the work required by RFP 1A-1. Exhibits 214-15, 217.

On October 17, 1994, an MCDA contractor was to begin constructing the cutoff wall

which was to run from east to west across the site. This work was originally to be completed

CBCA 385

in nine days, which was later extended to ten days. A temporary ramp ran into the site from

the north side and provided one of Turner’s subcontractors with access to the site. On

October 24, MCDA said the ramp was in the way of the cutoff wall construction which, in

MCDA’s opinion, entitled its contractor to additional time to complete the cutoff wall

construction. On October 25, BPT told MCDA that before the MCDA contractor was

awarded its contract, it knew about the temporary ramp. BPT did not agree the presence of

the ramp entitled MCDA’s contractor to additional time to complete its work. It appears,

however, the ramp was removed, the work was finished by October 28, and the ramp was

replaced. Exhibits 227-28, 229, 231, 233. MCDA originally estimated the cost of the cutoff

wall would be $60,000. The actual cost of the wall was $143,000 even though, according

to STS, the cutoff wall was installed essentially as planned, with “minor location changes

to allow constructability of the wall and the proposed caissons.” Exhibits 233, 563.

In late December 1994, during construction of one of the elevator pits, MCDA’s

groundwater control contractor removed contaminated water from inside the cutoff wall

which surrounded the elevator pits. On December 20, in an internal memorandum, MCDA

said the quantity of water pumped out was “20,000+” gallons at a cost of $1 per gallon. On

January 19, 1995, in a letter to GSA, MCDA said the quantity of water pumped out was

“47,000+” gallons at a cost of approximately $50,000. Exhibits 236, 560. On May 3, 1995,

STS said the cost of removing the water (29,000 gallons) was $33,853. Exhibit 569.

MCDA complained to GSA that this work was necessary only because GSA and BPT had

made changes in the design and location of the elevator pad, and MCDA said it should not

be responsible for the costs it incurred in removing the contaminated water from the site.

Exhibit 236. GSA responded by saying MCDA knew the STS remediation plan was based

upon preliminary building design documents and knew changes due to normal design

development would occur. After the cutoff wall was installed, GSA explained, one such

change was needed in order to meet an elevator manufacturer’s requirements. In GSA’s

view, the terms of the STS remediation plan made MCDA responsible for removing the

contaminated water. Exhibit 562.

On August 7, 1995, BPT told GSA it was substantially finished with the work

outlined in the STS remediation plan and required by RFP 1A-1. Exhibit 246.

Delay analysis

BPT took from March 18 until May 26, 1994, to develop its alternative remediation

concepts. GSA did not believe any time would have been saved if BPT had solicited

MCDA’s input while BPT was developing Alternative A, which was to isolate the entire site

and remove all of the contaminated soil and water. In GSA’s view, Alternative A was a

product of the unresolved indemnification issue and was BPT’s way of presenting a

CBCA 385

remediation concept which it could implement if it was not indemnified. The development

of this alternative went “hand in hand” with the unresolved indemnification issue.

Transcript at 406-07, 419. GSA’s on-site project manager, who is an expert in commercial

construction, did not believe BPT took an excessive amount of time to develop its

alternative remediation concepts. Transcript at 558, 562, 568. A construction management

and scheduling expert hired by GSA did not believe BPT took an unusual amount of time

to develop its two concepts, considering it had to hire GME to provide expertise regarding

remediation which BPT did not have, to become familiar with all of the information about

the site, and to speak with MPCA about what would and would not be allowable. Transcript

at 500-01.

The City and MCDA did not perform any schedule analysis to determine whether

there was a delay to critical path activities and, if so, the duration or cause of the delay.

GSA’s expert in construction management, whose area of expertise included critical path

method scheduling, compared Turner’s as-planned schedule to an impact schedule he

created by using information similar to the information available when price negotiations

occurred in mid-September 1994. Transcript at 485, 505-06.

According to both the as-planned and the impact schedules, the work related to

constructing the courthouse on the north part of the site was on the critical path to

completion of the project. According to the as-planned schedule, Turner was supposed to

begin work on June 10, 1994, finish the installation of sheet piles and the excavation for the

courthouse on August 19, and complete the courthouse basement walls on November 29,

1994. The impact schedule showed Turner began work very close to June 10. However,

according to the scheduling expert who prepared the impact schedule, Turner’s work started

and stopped when it encountered remediation-related issues which needed to be resolved.

This starting and stopping continued until the indemnification agreement was in place and

GSA issued the notice to proceed on September 26. After GSA told BPT to proceed, Turner

had to complete the sheet pile and excavation work. MCDA needed ten days to install the

cutoff wall, and those days were added to the impact schedule. An additional ten days were

added to the impact schedule to account for the special installation of caissons, five days

were added to account for work related to dealing with contamination when constructing the

elevator pits, and five days were added for performing courthouse wall concrete work in

colder weather than originally planned. The impact schedule showed the courthouse walls

would be finished on March 6, 1995, which is ninety-eight days later than the November 29

date shown in the as-planned schedule for completing this work. Thus, the scheduling

expert concluded critical path activities were delayed by ninety-eight calendar days. Exhibit

262; Transcript at 503, 506-12, 517-18.

CBCA 385

The scheduling expert concluded critical path activities were delayed by ninety-eight

days due to the lack of resolution of the indemnification issue. He explained Turner was not

in the business of environmental remediation and did not plan to assume the risk of dealing

with environmental contamination when it began the project. Indemnification was an

important issue and the project did not move forward until the issue was resolved in late

September when MCDA, Turner, BPT, and BPT’s architect entered into the indemnification

agreement. Exhibit 262; Transcript at 503, 506-12, 517-18.

In the scheduling expert’s opinion, if the indemnification issue had been resolved

earlier, it would have probably been possible to use Alternative B, which BPT presented on

June 2, because it was not much different from the plan which was developed by STS. Both

Alternative B and the STS plan left most of the contaminated soil and water in place, made

special provisions for the installation of the caissons, and used a grout cutoff wall. The

expert thought if the indemnification issue had been resolved when BPT presented its two

alternatives, one of which assumed there would be no indemnification and the other of

which assumed there would be indemnification, the parties could have saved several months

of time by moving ahead with Alternative B. Transcript at 519-21. Based upon his review

of documents related to the present dispute, he recalled MCDA saying in June 1994 that it

would indemnify BPT. However, in his opinion, an oral promise does not amount to actual

indemnification from the point of view of a contractor trying to manage risk. Transcript at

553.

The scheduling expert also looked to see whether there had been any critical path

delays caused by design work. He found all design packages were on schedule except for

the foundation design package, which was not on schedule because of unresolved

remediation issues. Finally, the scheduling expert looked at the list contained in the claim

(discussed in the next section) of examples of delay which the City and MCDA said were

caused by GSA and BPT. He did not find that any of these examples of delay had affected

the project’s critical path. Transcript at 549-50.

The claim

On April 9, 1999, the City and MCDA submitted a certified claim to GSA in the

amount of $2,693,055.50 plus interest. Exhibit 261. The bases for

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.