Dredging during the first phase of the Haines small boat harbor expansion project in August. (Abbey Collins)

Dredging during the first phase of the Haines small boat harbor expansion project in August. (Abbey Collins)

The contractor leading work on the Haines harbor expansion is under investigation by the Alaska Department of Labor. That’s just one of the unexpected challenges that have come up for the multimillion dollar project, which is in its first phase of construction. The contractor is also requesting $1 million in additional funding because it says the site conditions are more challenging than described.

The small boat harbor expansion is funded by an about $20 million state grant. For state-funded projects like these, statute requires contractors to employ 90 percent Alaskan workers in certain jobs, such as laborers.

Investigator Joe Dunham says in late September, the Department of Labor received an anonymous tip. The person said Pacific Pile & Marine was not meeting Alaska employment preference rules. Seattle-based Pacific Pile has a $13 million construction contract for the first phase of the harbor expansion.

Dunham says the investigation is ongoing and to protect Pacific Pile’s due process, he could not disclose further details. Pacific Pile did not return a request for comment by deadline for this story.

If a company violates the Alaska employment preference, the state can withhold money from the contract. The amount of money withheld is dependent on how many Alaskan workers were “displaced” and for how long.

Haines Public Facilities Director Brad Ryan says he does not expect this matter to affect the harbor project’s timeline. He refers to Pacific Pile as PPM.

“Really it comes down to what it means for PPM,” Ryan said. “I think the project will still be moving forward but there might be some financial impacts to PPM for this.”

Aside from the labor investigation, the project has run into some other obstacles.

One of the first tasks in the expansion effort was deepening the harbor basin. But the dredging turned out to be more difficult than Pacific Pile expected.

“They had anticipated being able to dredge the material in a certain amount of time,” said Haines Borough Manager Debra Schnabel. “But the job actually went longer than that because they claimed that the soils were much more difficult to grab hold of and dredge.”

Pacific Pile claims that the site conditions were not accurately described in contract documents and its work was “severely impact.” The company is asking for more than $1 million in financial compensation for the additional work.

Schnabel says the borough is consulting with its engineering contractor, PND, to analyze the claim. The parties will attempt to negotiate a settlement.

While that happens, Pacific Pile is continuing its work in the harbor.

Ryan says dredging is complete and they are now in the middle of pile-driving. That work faced complications as well. Ryan says some of Pacific Pile’s pile-driving equipment broke down. But he says the longest delay its caused was six days. They still expect phase one work to be done by early next year.

This story has been updated following the borough’s release of Pacific Pile’s request for equitable adjustment.