OAKLAND, Calif. (CN) – A demolition company sued the University of California in state court for $13 million on Tuesday, claiming the university misled them about the size, scope and presence of hazardous materials at a construction site.
Dynamic Management Solutions’ lawsuit filed in Alameda County Superior Court accuses the UC regents of misleading the company about the presence of PCBs and radioactive material in an abatement project, which slowed the pace of the project – and then firing the contractor for not fulfilling the terms of the misleading deal.
“What was represented to be a straightforward demolition and abatement project was, in reality, a highly complex and heavily regulated environmental characterization and remediation of a site that was a veritable cesspool of radioactive and other contaminated waste,” Dynamic Management says in the complaint.
The UC regents hired Dynamic Management to conduct the demolition of seven buildings in the hills above the University of California, Berkeley, campus. The area, commonly referred to as the Old Town Area, formerly housed several experiments during the World War II era, many of which involved the use of radioactive materials, neutron generation and metal plating and cleaning.
Machines designed to enrich uranium, advanced chemistry experiments and the creation of a cyclotron – now known as a particle accelerator – were all housed in some of the buildings slated for destruction.
These facts were not disclosed to Dynamic Management during the bidding process or in the subsequent contract, according to the complaint.
Furthermore, Dynamic says once the contract was signed and the project began it learned the site was contaminated with PCBs, a dangerous chemical compound formerly used in refrigeration and industry that is a major environmental contaminant with adverse effects on human health.
The contamination was so pronounced that the U.S. Environmental Protection Agency announced it would provide oversight of the project to ensure the contamination was properly and effectively remediated.
However, the UC regents never disclosed the potential for EPA intervention in the project despite extensive discussions with the regulatory agency prior to the contract being signed, Dynamic says.
“The university’s failure to disclose the potential for EPA oversight of the project is particularly troubling as the university and plaintiff engaged in extensive discussions regarding plaintiff’s technical proposal for the project prior to the execution of the subcontract,” Dynamic says in the complaint.
Furthermore, the company claims the hazardous-material inventory provided to them before the project began was woefully incomplete.
EPA oversight meant the project would take longer than originally agreed, requiring Dynamic to submit a change order. Meanwhile, the company says tests conducted on both the soil and the buildings at the project site showed the presence of radioactive material at alarming levels.
Dynamic says the UC regents misled them about the presence of such hazardous materials in order to drive down the bid.
“Shockingly, the university withheld the subsurface sampling report from plaintiff until after plaintiff executed the fixed-price subcontract in an apparent effort to deceive plaintiff, resulting in plaintiff’s submission of an artificially low technical proposal,” Dynamic says in its complaint.
After the radioactive problem, Dynamic submitted another change order this past summer – which it says the regents never answered. Instead, the university issued a notice to Dynamic months later that it was in default of its contract and began the process of firing the company, according to the lawsuit.
Dynamic seeks $13 million in damages. It is represented by William Eliopoulos of Rutan & Tucker of Palo Alto, California.