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ACEC/MA Sues Turnpike Authority 5.18.04

May 18, 2004
Engineers are suing Massachusetts over insurance.

The American Council of Engineering Companies of Massachusetts Inc. (ACEC/MA), on behalf of its members, filed suit in Massachusetts Superior Court against the Massachusetts Turnpike Authority (Turnpike Authority), the Massachusetts Highway Department and the Commonwealth. The suit asserts that the agencies have neglected to fulfill their contractual responsibility to provide and maintain $50 million in professional liability insurance to engineering firms employed to design and manage the Central Artery/Tunnel Project (CA/T Project).

The complaint seeks a court order to direct the Turnpike Authority to obtain replacement layers of insurance to restore the level of coverage to $50 million, the amount required under its agreements with the engineers.

"Nine years ago, Mass Highway created an insurance program to cover claims against design firms associated with the Central Artery Project. Today that coverage has been reduced to $20 million dollars because of the financial problems of two insurance companies," stated Abbie Goodman, Executive Director of ACEC/MA. "When Massport faced a similar issue in 1999, it took steps to correct the situation and replace the insurance."

Combined with lawsuits filed by Mass Turnpike attorneys against individual design firms, the state's non-compliance with the Owner Controlled Insurance Program (OCIP) contract has become an issue in the CA/T Project cost recovery process.

The state's inaction has allowed the amount of available coverage to drop to $20 million and puts the financial health of many of the over 20 engineering firms, which collectively employ approximately 2,400 Massachusetts residents, at risk. The firms involved in CA/T Project design contracts range in size from sole proprietorships, to large locally based firms and branch offices of national firms. Their work on the CA/T Project has been recognized around the world for major design industry achievements.

In 1995, Mass Highway initiated an Owner Controlled Insurance Program (OCIP) for the engineering firms with CA/T Project contracts to save the state money and lead to a more efficient project. After implementation of the professional liability OCIP, contracts with ACEC member engineering firms clearly confirmed the state's obligation to provide this insurance and the state made it clear that the firms did not need to purchase individual project-specific professional liability insurance in addition to their normal practice policies (which would not be adequate for such a large and complex project). The OCIP resulted in lower costs to the state because one large policy was purchased instead of a number of individual policies; this consolidated OCIP resulted in lower insurance premiums and lower direct costs to the state and it eliminated cross litigation among project participants. The engineers covered by the OCIP relied on the state's program as their primary insurance coverage for their services on the CA/T Project. OCIP programs are fairly common on large, complex civil works projects, having been successfully used by the Massachusetts Port Authority (Massport). Indeed, when a similar situation arose under the Massport OCIP, Massport took action to restore the insurance coverage.

The Central Artery/Tunnel Project or "Big Dig" is the largest, most complex and technologically challenging urban transportation project ever undertaken in the United States. Big Dig engineering and design firms produced a number of design firsts, including one of the largest applications of slurry walls and the most extensive highway tunnel ventilation system ever constructed, and the widest cable-stayed bridge in the world (with the first hybrid and asymmetrical bridge design in the United States). In addition, the Fort Point Channel crossing includes the most extensive use of immersed tube tunneling in the U.S.

Source: ACEC, May 7, 2004