Arkansas Democrat-Gazette
Date: 1/20/2002
Category: News
Page: B4

Labor shortage at incinerator sparks lawsuit

EMMETT GEORGE
ARKANSAS DEMOCRAT-GAZETTE

**STATE EDITION**

PINE BLUFF -- A Washington state construction company has sued the main contractor for the Pine Bluff chemical weapons incinerators for allegedly failing to provide accurate information about local labor conditions.

In the lawsuit, the plaintiff, Morrison Construction Services Inc. of Richland, Wash., charges the Washington Demilitarization Co. with unfair and deceptive practices. The lawsuit names the contractor's bonding company, Boston-based Liberty Mutual Insurance Co., as the defendant.

Liberty Insurance guaranteed a surety bond of $1.2 million for the project.

Washington Demilitarization, formerly the Raytheon Demilitarization Co. of Philadelphia, is a subsidiary of the Washington Group Inc. of Boise, Idaho.

The lawsuit was filed Jan. 16 in the Eastern Division of U.S. District Court in Pine Bluff by attorney John R. Herrig of Sacramento, Calif.

The Washington firm hired Morrison in October 1999 to build several facilities including a chemical laboratory building, a laboratory waste tank vault and a truck-loading station for the lab, the lawsuit states.

Morrison then encountered a shortage of skilled workers to get the work done and incurred losses due to overtime pay. Absenteeism and drug test failures were frequent among the workers hired.

In short, the lawsuit charges, "Washington misrepresented labor conditions to Morrison."

Because Washington didn't disclose its knowledge of these labor problems, Morrison bid less in labor costs for the project than it would have bid, the suit alleges.

Lawyers for Morrison said Washington officials were aware of labor problems, noting it filed a $23.9 million request for "equitable adjustment" with the U.S. Army for damages related to local labor problems.

"It is believed, and therefore alleged, that Washington received manpower damages, including damages ultimately incurred, but not paid to Morrison," the suit states.

Herrig, contacted Friday at his office, declined comment.

Dan Swaim, project general manager for the Washington Demilitarization's office in White Hall, said he had not seen the lawsuit and declined comment.

Jack Herrmann, director of public relations for the Washington Group International Defense Operations, said company lawyers had not been served with the papers.

The lawsuit also says the Washington company tried "to employ duress upon Morrison, a small disadvantaged minority business, by withholding retainage in the amount of $193,943.46 and assessing $38,000 in 'audit findings and executed changes' as a deduction to payments, without explanation."

Liberty Insurance is liable for the alleged breaches of contract as well as interest for funds received by the Washington firm. The exact amount of back charges are to be proved at trial, the lawsuit read.

No trial date has been set.

Construction of the $660 million disposal facility began in 1999. The facility is scheduled to begin destroying the aging stockpile of munitions in 2003, a process that is expected to take five years.

About 1,000 people work at the site.