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Miami International terminal's overruns part of lawsuits

Construction companies that worked on Miami International Airport's South Terminal have filed two separate lawsuits seeking $98 million they say they are owed.

icordle@MiamiHerald.com

Miami International Airport's South Terminal has been complete for a year, but nearly $100 million remains unpaid to subcontractors for work delayed because of poor planning, design changes and disruptions, according to two recently filed lawsuits.

Hensel Phelps Construction Co. has sued the project's contractor, Parsons-Odebrecht Joint Venture, as well as Parsons Transportation Group and Odebrecht Construction, and POJV's bonding companies, Zurich American Insurance Co., Fidelity and Deposit Co. of Maryland and American Home Assurance Co., in Miami-Dade Circuit Court.

Separately, four subcontractors that worked on the South Terminal have sued their higher contractors' bond insurers for $30 million they say they are still owed, citing four years of delays, design errors, thousands of changes and disruptions.

Fred McGilvray, Lotspeich Company, the Poole and Kent Co. and Dynalectric Co. have sued Travelers Casualty and Surety Trust, Zurich American Insurance Co. and American Home Assurance Co. in U.S. District Court in Miami.

''We are claiming the cost of their labor, materials, equipment and services, the reasonable value being about $30 million, and we believe that it should be covered under the payment bonds,'' said Herman Braude, lead partner with Washington, D.C.-based Braude & Margulies, which represents the four subcontractors.

Of the $30 million, $22 million is within the $90 million Hensel Phelps claims it and its subcontractors are due, Braude said.

''Basically, it was relatively completely different jobs that they built versus what they intended to build when they first entered the contracts years ago,'' he said.

The contracts originated in 2003, according to the suit.

Miami-Dade Aviation Department is not a party to either suit, but separately, POJV has filed a claim to the county for $65.2 million for damages due to delays on work it and its subcontractors say they performed on the South Terminal that has not been paid.

The airport has negotiated that down to $61 million and talks continue, said MIA spokesman Greg Chin.

DIFFERENCE IN DOLLARS

''Hensel Phelps and [its] subcontractors and all subcontractors on South Terminal submitted a claim of over $100 million and POJV only certified a claim to us of $65.2 million, so they could not certify the rest,'' said Deputy Aviation Director Max Fajardo.

The airport is trying to settle POJV's claim without going to court, he said.

''We are working with POJV to resolve as much of this claim as we can,'' Fajardo said. ``I believe very strongly that it is resolvable.''

But if the airport has to pay the full amount, it will have to go to the County Commission to ask for more money, he said.

Open for a year, the South Terminal cost $1.1 billion -- hundreds of millions of dollars over its original budget -- and took two extra years to complete.

According to the Hensel Phelps suit, POJV failed to pay Hensel Phelps $89,875,850 for labor, materials and supplies furnished by the company and its subcontractors.

ASSIGNING BLAME

'Because of incomplete, inadequate, inaccurate and insufficient plans and specifications and untimely project administration (which went beyond mere lethargy and bureaucratic bungling) by POJV, Miami-Dade Aviation Department and Miami-Dade Aviation's architects, [Hensel Phelps] and its subcontractors' performance under both trade contracts was delayed, hindered, and actively interfered with, resulting in [Hensel Phelps] and its subcontractors' cost of performance increasing substantially,'' the lawsuit says.

Maitland-based Moye, O'Brien, O'Rourke, Pickert & Martin, which represents POJV, Parsons, Odebrecht, Zurich American, American Home Assurance and Fidelity, declined to comment on any of the litigation. The firm does not represent Travelers Casualty.

POJV made extensive changes to the plans and specifications ''that were far in excess of what a reasonable contractor would anticipate,'' the suit says. ``Many of these changes were untimely, causing work to be performed out of sequence and disrupting previously contracted work.''

POJV was obligated to pay Hensel Phelps and its subcontractors for the increased cost of performing the work related to the changes, the suit says.

Fajardo said the four subcontractors and their attorneys will meet with county attorneys, the contractor and airport executives next week to try to settle their claims.

''They are very motivated to speak directly with the [county] to try to settle this claim,'' he said.

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