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Liberty Mutual Insurance denies Hernando's claim for dredge project

BROOKSVILLE — Hernando County officials eager to get the derailed Hernando Beach channel dredge back on track got more bad news this week.

They had hoped to recover millions of dollars from the bonding company that guaranteed the dredge would get done on behalf of the contractor. But the company, Liberty Mutual Insurance Co., has denied Hernando County's claim.

In September, the County Commission fired the contractor, Orion Dredging Services, for failing to get the project done. Orion filed a lawsuit against the county last week over the county's determination that the firm had breached its contract.

"Based upon analysis of the construction agreement and the project documents, Liberty Mutual's independent investigation has determined that Hernando County's declaration of default and subsequent termination of Orion was wrongful and constituted a breach of the construction agreement by Hernando County,'' wrote Duane Daiker, representing Liberty Mutual.

"As such,'' Daiker wrote, "Liberty Mutual has no obligation to Hernando County under the terms of the bond. Hernando County's claim is therefore denied.''

County officials have said they expected to see Liberty Mutual in court over the dredge project.

The firm's arguments are similar to the arguments that Orion made in its legal case against the county.

Orion claims that the design of the dewatering facet of the project was recommended by the county's consultant, Halcrow Inc.

"The permit and the construction agreement establish very strict and specific guidelines for the dewatering process, including the authorized equipment and methods,'' Daiker wrote.

When the described methods didn't work and a new plan had to be designed — one using a chemical coagulant and settling ponds — it became "a cardinal change in the scope of work,'' and the county should have accepted a change order from Orion for the expanded scope of work, the letter states.

The county should also have paid for delays in the project, according to Daiker.

"Hernando County initially acknowledged its responsibility to compensate Orion for the changes by a change order and then later denied responsibility,'' he wrote.

The county currently has about $4.5 million to pay for the dredging work, but the job is expected to cost millions more, especially with the modified permit requiring the coagulant and settling ponds.

County officials have talked about using money from the county's transportation trust fund to complete the work.

The revised project is out to bid, with a bid opening expected in early January. The County Commission is slated to consider awarding a contract at its last meeting in January, just days before its self-imposed deadline of Jan. 31.

Commissioners decided several weeks ago that if they could not get a contract in place by that date, they would abandon the long-delayed dredge. The deadline to complete the project is Jan. 1, 2012.

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

Liberty Mutual Insurance denies Hernando's claim for dredge project 11/24/10 [Last modified: Wednesday, November 24, 2010 7:01pm]
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