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Hernando County sues former dredge company over channel project

BROOKSVILLE — Hernando County this week filed a counterclaim against its original contractor for the Hernando Beach Channel dredging project and that contractor's bonding company.

The counterclaim argues that Orion Dredging Services LLC did not fulfill its obligation under its contract to complete the dredge following the regulations outlined in the county's permit.

In addition, the bonding company backing Orion's work, Liberty Mutual, had an obligation once Orion was found in default to complete the project or pay Hernando the additional costs it incurred to do so.

The county has moved on with a new contractor and is planning on spending dollars that had been set aside for judicial space needs to pay extra costs for the project. The plan is to pay back the judicial fund with whatever it recovers from Orion and Liberty Mutual.

"As a matter of practice, the county attorney's office does not comment on pending litigation,'' assistant county attorney Jon Jouben said Thursday. "That being said, we are confident that the county, by suing Orion and Liberty Mutual, will obtain compensation for the additional costs that it incurred as a result of Orion's abandonment of the dredge project."

The county hired Orion in May 2009 to complete the project, which had been tied up in legal, financial and environmental concerns for more than a dozen years by that point. Dredging began in December 2009 but was stopped by the state in January 2010 because Orion's operation was leaving too much sediment in filtered dredged spoils.

The county, Orion and the county's engineering consultant Halcrow Inc. worked for several months to devise a new method to separate the sediment from the water but landed in a dispute about the cost of the new method.

Orion's original contract was for $5,040,385 but it was asking for a change to $12,855,615 to accomplish the new process.

Officials from Orion refused to return to the job until the cost issue was settled. They asked for a hearing before the County Commission and in September 2010. The commissioners determined that the firm had breached its contract.

In November, Orion sued the county, blaming the dredging problems on a "defective project design'' by Halcrow. That design, Orion officials argued, "caused Orion to be delayed on the project resulting in damages including but not limited to significant time impacts and cost increases.''

The county then sought relief from Liberty Mutual, but that was denied later that month.

A Liberty Mutual official said Hernando's claim was denied because the county's decision to terminate its contract with Orion "was wrongful and constituted a breach of the construction agreement by Hernando County.''

In the county's formal filing this week, it defends its decision to fire the firm.

"Orion breached the subject contract by ceasing work, leaving the job site including moving equipment off site and refusing to return to work'' despite the county's formal demand to return to the job, the filing states.

"The contract required Orion to perform irrespective of resolving any change order or other dispute.''

The delays in the project, including a recent decision by the current contract to amend its method of dredging, have been problematic for the project. Hernando could lose $6 million in state funds if the county doesn't complete the work by a Dec. 31 deadline, and the job is now behind schedule.

Barbara Behrendt can be reached at behrendt@sptimes.com or (352) 848-1434.

Hernando County sues former dredge company over channel project 08/11/11 [Last modified: Thursday, August 11, 2011 8:20pm]
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