A structural fabricator has sued the Oregon Department of Transportation, alleging the company got a raw deal in a mitigation agreement meant to compensate it for negative impacts of the proposed Interstate 5 bridge over the Columbia River.
Oregon Iron Works Inc., a structural fabricator for the hydroelectric, bridge and civil construction industries, inked a deal with ODOT in May for $11.8 million in mitigation payments because some of the company's products will not fit under the proposed 116-foot-tall Columbia River Crossing bridge replacement.
Now, OIW has sued the ODOT, accusing the agency of bad faith in negotiating mitigation payments after learning that two other companies will receive up to four times the amount that OIW will.
ODOT officials say the lawsuit is without merit and intend to file a motion to dismiss.
The lawsuit was filed Oct. 11 in the Clackamas County Circuit Court.
'Large' and 'Excessive' Payments
According to the complaint, OIW alleges that recent actions of ODOT "threaten to dramatically alter the competitive environment in which OIW operates and put the livelihood of many of OIW's 450 employees at risk."
Flickr / Washington DOT
After learning that two other companies will get up to four times more in mitigation payments, Oregon Iron Works sued the Oregon Department of Transportation, alleging its deal was made in bad faith.
The suit accuses ODOT of bad-faith negotiation based on the amounts negotiated with Thompson Metal Fab Inc. and Greenberry Industrial, who also signed mitigation agreements.
OIW is located upstream from the proposed Columbia River Crossing Bridge and says it depends on shipping on the Columbia River to deliver its large structural products. The proposed height of the bridge spans will impact its ability to ship larger items, the company says.
In the lawsuit, OIW says it was aware that ODOT was in mitigation talks with Thompson Metal Fab and Greenberry Industrial, but was not provided any information about the discussions, including the payments to the two other companies.
OIW said it learned about the agreements with the other companies on Aug. 30.
"To OIW's surprise, ODOT agreed to pay Washington-based Greenberry $24.8 million as a mitigation payment for the CRC—more than double what ODOT agreed was the negative impact of the CRC Bridge on OIW. As to its other competitor, Washington-based TMF, ODOT agreed to pay $49.8 million in mitigation payments, more than four times the mitigation payment to OIW," the lawsuit states.
The lawsuit then calls the payments to the two other companies "so large and excessive as to completely undermine the purpose of the Mitigation Agreement and Mitigation Payment" and alleges that these payments will give the other companies a "substantial competitive advantage."
ODOT Calls Complaint 'Frivolous'
According to ODOT, OIW voluntarily signed a contract with the agency on May 22 for $11.8 million to mitigate the impact of the bridge replacement.
ODOT and the Department of Justice planned to immediately file a "motion to dismiss," saying the complaint is without merit.
"We are disappointed by this action," ODOT Director Matt Garrett said in a press release. "We have a signed contract that is fair to OIW and Oregon taxpayers. We are confident that this lawsuit is frivolous and without merit and should be dismissed."
The proposed bridge has a clearance of 116 feet. The U.S. Coast Guard recently approved the plan, after rejecting a previous design with 95 feet of clearance.
ODOT said that it spent more than a year working with OIW and the Washington Department of Transportation to review independent economic, land use and market studies, as well as OIW's own proprietary information. The mitigation contract would provide payment to OIW once the project is fully funded, construction permits are in place, and the bridge construction has been awarded.
About the Project
The two structures that currently span the Columbia River were built in 1917 and 1958 and are at risk of structural failure in the event of an earthquake, according to the project's website.
The U.S. Coast Guard granted the bridge replacement project a general bridge permit on Sept. 27, ODOT announced. The Coast Guard has statutory authority to approve the location and clearances for all bridges over navigable waterways.
When considering a permit application, the Coast Guard "must promote and expedite projects that facilitate national and international commerce and provide for the reasonable needs of present and prospective land and marine transportation."
The Coast Guard had previously ruled that the originally planned 95-foot clearance was too low, saying it wanted a clearance of 125 feet.
"This is a major step forward that recognizes the importance of this project and its economic benefits to the state, region, and nation," said Garrett. "Getting the go-ahead from the Coast Guard meets a key viability requirement and makes the project's path forward clearer."
According to ODOT, replacing the bridge will have economic benefits of $5 billion to $8 billion and will create 4,200 jobs and $231 in additional wages in 2030 compared to the "no build" scenario.
The first phase of the project, which officials hope will begin in 2014, includes making interchange and roadway improvements in Oregon and building the river crossing, the SR 14 interchange and light rail to Vancouver. The first phase is expected to last until 2022.