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Appeals court reverses $367M award initially granted to Anchorage over faulty port work

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Appeals court reverses 7M award initially granted to Anchorage over faulty port work


ANCHORAGE, Alaska (KTUU) – A panel of federal judges on Monday partially pulled damage awards from a 2021 ruling centered on a Municipality of Anchorage lawsuit against the federal government surrounding faulty construction work at the Don Young Port of Alaska.

The U.S. Court of Appeals for the Federal Circuit opinion, published on Dec. 16, slashes the Municipality of Anchorage’s initially-awarded $367.4 million to a little more than $11 million, more than three years after the court first issued a decision over the suit that sought to prove the United States breached two contracts with the municipality for port improvements.

“This is a disappointment,” said Anchorage Mayor Suzanne LaFrance, who spoke briefly on the published opinion at the most recent meeting of the Anchorage Assembly, calling the decision “unexpected news” on Tuesday night.

“We are continuing to consider appropriate next steps,” she said, adding that the municipal manager “will brief members later this week.”

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The court opinion largely vacates the 2021 U.S. Court of Federal Claims decision but hinges in large part on action from two decades prior, in which the Municipality of Anchorage and the federal government agreed to upgrades and expansions at the aging Port of Alaska.

As referred to in court documents, the municipality and federal government entered into a 2003 Memorandum of Understanding and, later, a supplementary 2011 Memorandum of Agreement, for those improvements to the port. The same documents show the Maritime Administration (MARAD) contracted with Integrated Concepts and Research Corporation (ICRC) in 2003, which in turn subcontracted with others, to complete the project.

“Problems with the project were discovered during a third-party inspection in 2010, when ‘large-scale damage was found in the installed sheet piles,’” according to court documents, “which protect an excavated area from earth and groundwater.

“While ICRC and its subcontractors performed the work, Anchorage ultimately blamed the project issues on MARAD, alleging that MARAD failed to ‘develop project management or inspection protocols,’” according to the opinion, “and ‘abdicated its responsibilities’ to oversee the project.”

These issues precipitated the 2011 agreement, which was designed in part to redefine responsibilities for the project as a whole, with adjustments to oversight including the development of the Port Oversight and Management Organization.

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That same year, however, a subcontractor of the ICRC alleged its work was not being appropriately reimbursed. Without consulting the municipality first, MARAD eventually settled, paying ICRC $11,279,059, court documents show.

In March 2013, the municipality filed its lawsuit against multiple parties – among them, the ICRC and subcontractors – over the “deficient work” at the port, which was settled. The next year, Anchorage filed suit against the federal government in the Court of Federal Claims, claiming MARAD had breached both the 2003 and 2011 memorandums.

On Dec. 9, 2021, the court eventually sided with Anchorage and against MARAD. It also found that the municipality proved its entitlement to claim damages in full, totaling $367,446,809, the following February.

The Court of Appeals, in its opinion this week, affirmed the U.S. Court of Federal Claims determination that the 2011 agreement was breached, given the $11.3 million in subcontractor claims were settled without the municipality’s approval.

However, the appeals court said a “defect-free port” was never required as part of the agreement from 2003, and vacated that portion of the federal claims court’s decision. This cut the damages awarded to Anchorage by more than $169.5 million, as part of the value of the structure the municipality “expected but did not receive”; and nixed an additional $186,607,000, as part of anticipatory costs associated with fixing defects in the existing structure at the time.

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The overturning of this decision pulls a large portion of the funding dedicated for port upgrades, marking the latest in the saga of the years-long modernization project for the port.

According to the port’s website, the Port of Alaska Modernization Project, created in 2014, is meant to support the port continuing to serve as the state’s key inbound cargo gateway, an operation site for national defense infrastructure, and a supporter of consumer goods and emergency needs. Recent data from the port shows imported cargo that moves through the port reaches about 85 percent of all Alaskans.

The next phase of the modernization project is expected to cost up to $2 billion.

Read the full opinion from the Court of Appeals here.

See a spelling or grammatical error? Report it to web@ktuu.com.

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Alaska

Winter Solstice celebration takes over Cuddy Park

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Winter Solstice celebration takes over Cuddy Park


ANCHORAGE, Alaska (KTUU) – On the darkest weekend of the year, Alaskans gathered at Cuddy Park to mark the moments before daylight finally begins its slow return.

To celebrate, the Municipality held its annual winter solstice festival, inviting everyone for an evening of cold-weather fun.

”Some of the highlights, of course, are ice skating at the oval right over there, some holiday music, we have Santa and Mrs. Claus wandering around, we are going to have some reindeer here,” Anchorage Parks and Recs Community Engagement Coordinator, Ellen Devine, said.

In addition to seeing reindeer, folks could take a ride around the park in a horse-drawn carriage or sit down and watch a classic holiday film provided by the Alaska Bookmobile.

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Despite the frigid temperature, people made their way down to the park to partake in some festive cheer.

“It is my first time in Anchorage,” attendee Stefan Grigoras said. “It’s beautiful, it is a little bit cold, I’m not going to lie, but I want to take a picture with the reindeer.”

Grigoras, like many, took part in the free hot chocolate and took his photo with St. Nick and Mrs. Claus, who were seen wandering around bringing joy to all.

“[The kids] get so excited and, you know, you have everything from run over and almost knock us down with hugs to not even wanting to come near us, and it’s just a fun combination of all that,” Mrs. Claus said.

Some of those kids were Logan and Keegan, who were out and about with their parents, Samantha and Trevor. The two kids asked for things that every child is sure to want.

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“A monster truck,” Logan said.

“Bingo,” Keegan said.

”Like Bluey and Bingo,” Samantha clarified for Keegan.

The young family is originally from Arkansas and is excited to be a part of a thriving community.

“I love Anchorage’s community. There’s so many community events, and especially as a young family, it makes me really excited to get together and get to know people,” Samantha said.

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As the festivities continued into the night, a familiar holiday message could be heard.

”Merry Christmas, ho, ho, ho,” the Clauses yelled!

“Merry Christmas,” Logan and Keegan said.

See a spelling or grammar error? Report it to web@ktuu.com

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Opinion: You get what you pay for — and Alaska is paying too little

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Opinion: You get what you pay for — and Alaska is paying too little


A protester holds a sign before the start of a rally held in support of the Alaska university system on Wednesday, Feb. 13, 2019, in Juneau, Alaska. (AP Photo/Becky Bohrer)

Most Alaskans, perhaps even most Americans, have a knee-jerk reaction to taxes. They affect citizens in a sensitive area — their pocketbook. Perhaps a little analysis and thought could change this normal negative reaction.

It is clear, even to the stingiest among us, that Anchorage and Alaska need more income. Our severely underfunded public schools, decreasing population — called “outmigration” these days — underfunded police force, deteriorating streets and highways, underfunded city and state park budgets, and on and on, are not going to fix themselves. We have to pay for it.

Public schools are the best example. Do you want your first grader in a classroom with 25-plus students or your intermediate composition student in a class with 35-plus students? What if the teacher needs four to five paragraphs per week per student from two such classes? Who suffers? The teacher and 70 students. It’s not rocket science — if you minimize taxes, you minimize services.

I was an English teacher in Anchorage and had students coming into my classroom at lunch for help. Why? They were ambitious. Far more students who wanted and needed help were too shy, too busy or less motivated. With smaller class sizes, those students would have gotten the help in class.

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Some Alaskans resent paying taxes that help other people’s children. They often say, “But I don’t have any kids in school!” The same attitude is heard when folks say, “The streets in our neighborhood are fine.” Taxes are not designed to help specific taxpayers; they are, or should be, designed to help the entire community. And we are a community.

As well, lots of people get real excited by sales taxes, especially those who have enough income to buy lots of stuff. They argue that, on balance, sales taxes are unfair — they are regressive. That means that individuals with less income pay a higher percent of their income than individuals with a higher income, and this is true. It is minimized by exempting some expenses — medical care, groceries and the like.

A recent opinion piece published in the Anchorage Daily News explained the disadvantages of a regressive tax. In doing so, the author made an excellent argument for using a different kind of tax.

The solution is to use an income tax. With an income tax, the regulations of the tax can prevent it from being regressive by requiring higher tax rates as individual incomes increase. Alaska is one of only eight or nine states with no state income tax. For those folks all worked up about regressive sales taxes, this is the solution.

Any tax that most folks will accept depends on people seeing themselves as part of the same community. That’s not always obvious these days — but it doesn’t change the bottom line: We still have to pay our way.

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Tom Nelson has lived in Anchorage more than 50 years. He is a retired school teacher, cross country ski coach, track coach, commercial fisherman and wilderness guide.

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Maintenance delays Alaska Air Cargo operations, Christmas packages – KNOM Radio Mission

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Maintenance delays Alaska Air Cargo operations, Christmas packages – KNOM Radio Mission


Christmas presents may be arriving later than expected for many rural communities in Alaska. That’s after Alaska Air Cargo, Alaska Airlines’ cargo-specific carrier, placed an embargo on freight shipments to and from several hubs across the state. According to Alaska Airlines, the embargo began on Dec. 16 and will end on Dec. 21. 

The embargo excludes Alaska Air Cargo’s GoldStreak shipping service, designed for smaller packages and parcels, as well as live animals. 

Alaska Airlines spokesperson, Tim Thompson, cited “unexpected freighter maintenance and severe weather impacting operations” as causes for the embargo. 

“This embargo enables us to prioritize moving existing freight already at Alaska Air Cargo facilities to these communities,” Thompson said in an email to KNOM. “Restrictions will be lifted once the current backlog has been cleared.”

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Other carriers like Northern Air Cargo have rushed to fill the gap with the Christmas holiday just a week away. The Anchorage-based company’s Vice President of Cargo Operations, Gideon Garcia, said he’s noticed an uptick in package volume. 

“It’s our peak season and we’re all very busy in the air cargo industry,” Garcia said. “We are serving our customers with daily flights to our scheduled locations across the state and trying to ensure the best possible holiday season for all of our customers.”

An Alaska Air Cargo freighter arrives in Nome, Dec. 18, 2025. It was the daily-scheduled flight’s first arrival in Nome in a week after maintenance issues plagued the Alaska Air Cargo fleet. Ben Townsend photo.

Garcia said the holiday season is a tough time for all cargo carriers, but especially those flying in Alaska. 

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“We operate in places that many air carriers in other parts of the country just sort of shake their head at in disbelief. But to us, it’s our everyday activity,” Garcia said. “The challenges we face with windstorms, with cold weather, make it operationally challenging.”

Mike Jones is an economist at the University of Alaska Anchorage. He said a recent raft of poor weather across the state only compounded problems for Alaska Air Cargo. 

“I think we’ve seen significantly worse weather at this time of year, that is at one of the most poorly timed points in the season,” Jones said. 

Jones said Alaska Air Cargo is likely prioritizing goods shipped through the U.S. Postal Service’s Alaska-specific Bypass Mail program during the embargo period. That includes palletized goods destined for grocery store shelves, but not holiday gifts purchased online at vendors like Amazon. 

“When a major carrier puts an embargo like this it clearly signals that they’re having an extraordinarily difficult time clearing what is already there, and they’re trying to prioritize moving that before they take on anything new,” Jones said. 

According to the U.S. Bureau of Transportation Statistics, Alaska Airlines was responsible for 38% of freight shipped to Nome in December 2024. 

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Alaska Air Cargo’s daily scheduled flight, AS7011, between Anchorage and Nome has only been flown four times in the month of December, according to flight data from FlightRadar24. An Alaska Air Cargo 737-800 freighter landed in Nome Thursday at 11:53 a.m., its first arrival in one week. Friday’s scheduled flight has been cancelled. 



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