# DENIED: April 28, 2008

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

DENIED: April 28, 2008

CBCA 385

MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY
and THE CITY OF MINNEAPOLIS,
Appellants,
v.
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

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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.

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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.

1

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

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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

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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.

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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.

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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.

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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

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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

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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

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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

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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

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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,

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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

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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

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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

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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

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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

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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.

2

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.

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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

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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

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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

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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

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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.

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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.

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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.

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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.

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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

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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

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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

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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.

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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

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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.

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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

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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.

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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

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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.

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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

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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

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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

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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

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Acbca%3Ae4a3f65b16fdb2a7. Public record. Not legal advice.