An engineering firm paid the City of Ocean City $130,000 to end a city lawsuit alleging the company failed to do its job, according to a document released this week.
Duffield Associates Inc. — a firm based in Wilmington, Del., with an office in Cape May Court House — received a $194,634 contract in June 2011 to get permits and make construction plans for a site where material dredged from the bottom of lagoons and boating channels on Ocean City’s bay side was to be dumped.
But a separate company claimed it could not complete a 2012 dredging project between 15th and 34th streets because plans for disposal were inaccurate and the site inadequate.
With the settlement, Ocean City recovers two-thirds of the original contract cost for the design work.
The settlement agreement, signed June 22 by a representative of Duffield Associates, includes “no admission of liability” from either party and covers neither party’s legal costs.
As part of the confidential settlement, “the parties agree not to disclose, discuss or reveal terms of agreement.”
“If asked, the parties will state only that ‘the matter has been resolved satisfactorily and the terms of the resolution are confidential,’ ” according to the agreement.
Such nondisclosure terms are common in lawsuit settlements, but New Jersey courts have consistently upheld the public’s right to know in cases that involve public entities.
OCNJ Daily received the settlement agreement through an Open Public Records Act (OPRA) request.
The $194,634 contract for design work was just a small portion of the 2012 project cost. The city spent $1,829,655 for Hydro-Marine Construction Company of Hainesport, N.J., to remove 73,000 cubic yards of dredged material under a contract that called for the dredging of 106,000 cubic yards.
The lawsuit and the settlement help illustrate the high stakes and high costs of Ocean City’s efforts to make its bayside waters navigable. Many areas are too shallow for boat traffic or even swimming through substantial portions of the tide cycle.
It also shows that the city is willing to fight to hold contractors accountable for their work.
THE ABORTED PROJECT
Amid some fanfare, Ocean City restarted a bayside dredging program when it awarded a $1,819,422 to Hydro-Marine Construction, which started work in September 2012 to dredge the lagoons between 34th Street and 15th Street.
The areas were to be dredged to a minimum depth of four feet (at low water) and average of five feet — with some spots six feet deep.
From the start, work was slow. The contractor got an extension on a permit that expired Nov. 30 but still did not complete work by the end of a new permitting window on Dec. 31, 2012. Work was scheduled to resume on July 1, 2013. But the contractor never returned.
The dredging company did not finish work at Carnival Bayou Lagoon (between 16th and 17th streets) or at parts of Venetian Bayou Lagoon (between 17th and 18th streets) and Clubhouse Lagoon (between Waterway Road and Clubhouse Drive).
Despite the incomplete work, Council voted last summer to authorize a final payment to close out a $1,829,655 contract with Hydro-Marine Construction.
The final payment represented a $10,234 increase over the original contract price.
The site where the dredge spoils were permitted to be dumped did not have as much capacity as was originally estimated, Ocean City Community Operations Director Roger McLarnon said at the time.
The final contract figure was reduced for the dredging work that was not completed but increased for extra work in preparing the spoils site to accept the material that was able to be pumped there, he said. The net was about the same $1.8 million that the contract called for.
THE LAWSUIT
Ocean City filed its complaint against Duffield in July 2014 — at about the same time it paid off Hydro-Marine Construction.
The complaint states that Ocean City selected Site 83 (an approved disposal site in the marshes near Roosevelt Boulevard) based on Duffield’s recommendation.
But the complaint alleges that Duffield “failed to adequately investigate, evaluate, analyze and test existing conditions for Plaintiff’s intended use of (the site).”
“Duffield failed to design the expansion of CDF83 in such a way that the Plaintiff ‘s project could be completed,” the complaint alleges. “As a result of Duffield’ s said failure, construction methods had to be changed, portions of the project were delayed. The project, as a whole, could not be completed and the Plaintiff’s costs were increased.”
Duffield was not the low bidder on a 2011 professional services contract for “investigation, permitting and preparation of construction plans for the disposal of dredge material.” But the company was awarded a professional services contract based, in part, on its reputation for good work.
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