As Washington, D.C.’s Washington Metropolitan Area Transit Authority (WMATA) continues to work on system-wide improvements to the city’s Metrorail, construction and demolition contractors are clashing over payment issues. However, recent allegations of nonpayment and an “illegal skimming” scheme leading JLN Construction Services, LLC to file a June 18, 2021, lawsuit against TMG Construction Corporation.
Many of the system’s issues stem from a chilling plant, which has been broken since August 2015. According to a report by The Washington Post, the city’s subway stations are cooled by a system that involves water flowing to a chilling plant and then to air handling units in the stations.
However, as the report noted, “The problem is with the pipes that carry the water between the chiller plant and the two stations…They are as old as Metro’s original rail route, the Red Line, which opened in 1976. And the pipes have sprung holes.”
Replacing these pipes mainly involved piping at the Farragut North and Dupont Circle stations, which led to the involvement of TMG Construction and JLN Construction.
TMG Construction accused of significant breaches of contract
According to JLN Construction’s lawsuit, WMATA awarded TMG Construction the contract to be the general contractor supervising the repair of this system in fall 2017. TMG Construction and JLN Construction entered an agreement on May 23, 2018, for the latter to serve as a subcontractor for the project.
JLN Construction’s contract awarded it a base amount of $3,257,890 to replace the piping — a project that indicated a start date of July 18, 2018, and a completion date of April 22, 2019.
In this process, as per the lawsuit, “JLN’s work on the Condenser Piping Project was delayed and significantly increased in cost and scope on account of, inter alia, a massive web of underground obstructions, existing structures and other pipes and utilities not shown on WMATA’s solicitation documents.”
JLN Construction claims that it was assured that WMATA would be “would be paid for all costs associated with the additional, changed and extra work required by JLN on account of the said changes and obstructions.”
However, it further claims that TMG Construction settled the cost increases at the project with WMATA for only $658,000 when JLN Construction submitted costs “upwards of $2,000,000” — a situation further complicated when TMG Construction allegedly “did not permit JLN to invoke the dispute provisions of TMG’s contract with WMATA.”
JLN Construction further accused TMG Construction of failing to pay any amount of the $658,000 collected from WMATA.
As the lawsuit alleges, “TMG valued its long-standing and profitable relationship with WMATA over its contractual obligations to JLN as per the Master Agreement, and made the calculated, deliberate decision to breach the Master Agreement with JLN rather than engage WMATA, or allow JLN to engage WMATA, in long and protracted litigation.”
Additionally, the lawsuit alleges that TMG Construction represented payments for JLN Construction’s work as being split between the two — with 75% going to JLN Construction and 25% going to TMG Construction in what documents call an “unlawful skimming scheme.”
The lawsuit adds that JLN Construction was not fully paid for work done on an escalator machine room’s air conditioning system, still being owed more than $75,000 for the project, keeping the amount TMG Construction allegedly owes far upwards of $2,000,000.
As documents reiterate, “TMG has continuously failed and refused to pay JLN amounts paid to TMG by WMATA…over ten months ago, in August of 2020.”
Failure to complete permanent improvements has led to temporary fixes
Despite the difficulties, city transit officials remain focused on permanently improving the system. In order to fund the subway improvements, WMATA currently has a six-year, $9.7 billion Capital Improvement Program in place intended for investment in “system safety, reliability, and the region’s economy.”
“It is important that we continue with this safety critical work so that we are ready and able to resume normal operations as the region reopens,” said Metro General Manager Paul J. Wiedefeld. “We will be working around the clock, seven-days a week, to maximize efficiencies and allow us to get the work done more quickly.”
In the meantime, Metrorail officials are running tunnel fans to keep air circulating in the stations.
Even amidst the permanent improvements made to the station cooling system, WMATA is continuing to work on temporary and long-term fixes to problems, announcing in June 2021 that “As part of Metro’s investment in safety and reliability, construction will begin in July on the first of two major capital projects on the Red Line that will upgrade the tunnel ventilation system and repair deteriorating platform canopies.”
Lawsuit does not mark the first time repairs have faced roadblocks
This dispute is far from the first delay on the city’s improvements to the Metrorail cooling system — the project has seen numerous construction and permitting delays which may point to future issues for the system and those who work on its improvement.
As contractors worked to replace the chilling pipe system, July 31, 2019, and August 16, 2019, releases from the WMATA noted that unforeseen problems had impacted the project, pushing completion back even farther.
“It is no secret that the project to restore chilled air service to Dupont Circle and Farragut North stations has been beset by delays as contractors have worked to reestablish the pipe connections between the two stations and the cooling facilities,” the WMATA noted.
“While the project has advanced to its final stage, the contractor has encountered several delays due to unexpected utilities and other obstructions (unmarked on engineering drawings) that required design changes,” a release read. “New pipe fittings to accommodate these design changes have been ordered and are expected to arrive in 1-2 weeks.”
According to the WMATA, the repairs required digging underneath Connecticut Avenue NW and installing new pipes to reconnect the nearby chilling plant to the Dupont Circle and Farragut North station.
Similar issues came up in the months prior to this, as well — as crews worked on a permanent fix to the cooling system in June 2019, crews working underneath Connecticut Avenue hit a lamp post and had to stop work in order to move it.
In May 2018, the placement of the Dupont Circle and Farragut North stations’ temporary cooling tower caused a number of issues for the city’s transit authority and the D.C. Department of Transportation after its 2017 placement caused public outcry.
“Not only was it impossible to really conduct business, every single customer who came in complained about the noise level,” noted business owner Ginger Park. “We counted down the days when it was going to be removed.”
Difficulty finding a location for the cooling tower and obtaining the proper permitting caused delays for the transit system.
Department of Transportation spokesperson Michelle Phipps-Evans noted in an earlier statement that “DDOT has responded it’s seeking more specific details on the chiller’s impact on the traffic, and the community. When DDOT receives this information, we can proceed further on the permit.”