Portland-based Apex Directional Drilling today filed a claim with the City of Eureka, arguing that the company is owed $6,280,000 in damages due to “negligence, misrepresentations and breach of contract” in the Martin Slough project, a long-delayed, multi-million-dollar wastewater system upgrade.

The company was awarded a bid last year to install nearly a mile of pipe beneath Pine Hill, near the Eureka Municipal Golf Course, but abandoned the project earlier this year after encountering serious trouble underground.

Apex alleges that soil samples provided by a city contractor, SHN Consulting Engineers, were inaccurate, promising stable soils when the bore path was actually filled with water and flow sand. Apex further alleges that both the city and SHN instructed the company to continue drilling despite these facts in the ground.

“All in all,” the claim says, “the City’s Project design fundamentally lacked constructability.” It was impossible, in other words.

SHN disputes these allegations, claiming in a statement that its samples were accurate and that Apex didn’t follow its advice.

The claim for damages exceeds the original bid on the project by roughly $3.7 million, according to figures cited in the complaint (pdf file here).

“Damages include but aren’t limited to extra pay to subcontractors, extra materials and parts, extra labor, standby time, lost opportunity and the loss of expensive equipment,” Apex President Mike Lachner said in a statement.

Reached by phone, a woman in Eureka’s city attorney’s office said the office had not yet received the complaint.

Lachner, Apex’s president (pictured above holding soil from the site), issued the following statement:

“Properly functioning drinking water and wastewater systems are vital to the well-being of communities, and Apex Directional Drilling has extensive experience creating and protecting these systems across the United States.

Apex has a long track record of completing projects on time and on budget, even in the most challenging circumstances.

In the case of the Martin Slough Force Main, we bent over backward to make this project work.

Frankly, we are puzzled and troubled by the city’s unresponsiveness and refusal to acknowledge ground conditions that were vastly different than advertised when hiring for the drilling project. We filed this complaint because Eureka officials need to step up and be accountable for the damages caused by the city’s negligence, misrepresentations and breach of contract.

Damages include but aren’t limited to extra pay to subcontractors, extra materials and parts, extra labor, standby time, lost opportunity and the loss of expensive equipment. These costs could largely have been avoided had the city acknowledged the differing conditions and issued timely change orders to keep the project on track.

Before we took the job, the city and its engineering firm, SHN, provided a geotechnical baseline report that allowed for contractual adjustments in the event of differing soil conditions. This report became part of Apex’s contract, and we agreed to work for the city on the belief we would be compensated for extra work should our crews encounter unanticipated ground conditions — which they did.

We hope Eureka officials will now do the right thing and be accountable for changes in the project that no one anticipated. The city of Eureka deserves not only an efficient and properly functioning sewer system, but also a healthy and transparent city government.”