BOSTON, SEPTEMBER 1, 2016 -- A Boston-based engineering firm will pay $5.5 million to settle allegations it failed in its obligations to adequately oversee construction of Plum Island's water and sewer systems, Attorney General Maura Healey announced today.
Construction of the systems, which are maintained by the City of Newburyport, was funded through loans from the Massachusetts Department of Environmental Protection's (MassDEP) Clean Water State Revolving Fund and Drinking Water State Revolving Fund.
"This company failed to take the necessary steps to make certain that this project was built in accordance with its own technical specifications," said AG Healey. "We are pleased that we could come to an agreement that provides Newburyport with the resources needed to undertake needed repairs and ensure the integrity of Plum Island's critical infrastructure."
According to today's settlement, CDM Smith, Inc. (CDM) will pay the state $5.5 million, of which $5.3 million will be paid to the City of Newburyport and placed in a trust fund earmarked for costs and expenses related to the repair, modification, or optimization of Plum Island's water and sewer systems.
"I'm grateful to the Attorney General for all of her office's work on this and for helping us reach an agreement that will provide our city with the resources necessary to repair this system," said Newburyport Mayor Donna Holaday.
"The contractor on this water and sewer project failed to oversee and manage its installation, resulting in serious repair costs and service disruption for residents," said Inspector General Glenn A. Cunha. "I thank the Attorney General's office for pursuing and achieving a settlement that holds the contractor accountable."
"The city has been working hard to manage their systems," said MassDEP Commissioner Martin Suuberg. "Today's settlement will ensure that Newburyport can make the needed improvements."
"Serious problems with the water and sewer infrastructure on Plum Island have been deeply concerning for some time now, and they need to be properly addressed," said Senate Minority Leader Bruce Tarr (R-Gloucester). "Fortunately the Attorney General, working with the Mayor and other local officials, have secured a path forward that will bring accountability for those charged with overseeing the project and the resources needed to correct the defects that have us all concerned."
"I greatly appreciate Mayor Holaday's focus on this matter, the strong advocacy of Attorney General's Office attorneys, as well as the efforts of the state's Inspector General's Office," said Sen. Kathleen O'Connor Ives (D-Newburyport).
"I am glad to see this come to a close and I know that the residents of Plum Island are too," said Rep. James Kelcourse, (R-Amesbury). "So many people worked hard to get to this point and we are grateful to them for it."
"As someone who is in the construction business I very much want to see contractors who do work for the Commonwealth be held responsible for their actions," said Rep. Lenny Mirra, (R-West Newbury). "Residents and taxpayers will be glad to know that we have an Attorney General's office that will work with elected officials to protect our interests."
In 2000 and 2002, CDM won contracts to design and oversee construction of a water and sewer system for Plum Island, a barrier island that includes parts of the City of Newburyport and the Town of Newbury, with more than 1,200 homes. Under the two contracts, CDM wrote the technical specifications for the project, including a requirement that ductile iron pipe be wrapped in polyethylene to inhibit corrosion. CDM also acted as the on-site agent to ensure that the contractors responsible for building the project did so in accordance with CDM's specifications.
The AG's Office commenced its investigation after an initial investigation by the Office of the Inspector General following a 2011 water main break revealed that ductile iron pipes at the site of the break had not been wrapped in polyethylene and were severely corroded. Today's settlement resolves the AG's allegations that CDM: did not conform to its design and construction oversight obligations; did not properly familiarize its on-site agents with the ductile iron specification; and did not ensure that contractors abide by those specifications, thereby exposing critical components of the system to corrosive elements.
This case was handled by Assistant Attorneys General Gillian Feiner, Chief of AG Healey's False Claims Division and Betsy Harper, Deputy Chief of AG Healey's Environmental Protection Division, with assistance from Assistant Attorney General Justin Lowe and Paralegal Krista Roche. Additional critical assistance was provided by Eric Worrall, David Ferris, and Thomas Mahin of MassDEP and Pamela Talbot, Director of MassDEP's Environmental Crimes Strike Force.
