SEPTA faces lawsuit over stimulus project

A dispute over a federal stimulus project has landed SEPTA in federal District Court.

AIS Construction Co., of Carpinteria, Calif., says that the authority didn’t compensate it properly for work conducted for the Gwynedd Cut stabilization project. The project, paid for with $4.3 million in stimulus money, was meant to improve safety along the Landsdale regional rail line and to increase train speeds along the historic Montgomery County rail feature to 70 miles an hour. The area was prone to mud slides.

The Gwynedd Cut was first constructed between 1853 and 1856 as a rail tunnel. The roof was taken off when the rail line was electrified in the 1920s.

AIS received a $3.3 million contract for the project in 2009.

But the company says SEPTA failed to pay it for wire mesh that it installed as part of construction. The authority had said AIS would need about 100,000 square feet of the material, but it ended up using more than 300,000 square feet. SEPTA never compensated it for the difference, according to the complaint.

AIS also alleges it performed more than $100,000 worth of work to perform repairs related to a storm that struck the site. It also performed more than $30,000 worth of other uncompensated work, according to the complaint.

All told, the company says it’s owed $1.2 million in unpaid compensation by SEPTA.

AIS is suing for breach of contract and argues that the Pennsylvania Contract and Subcontractor Payment Act entitles it to 1 percent interest for each month SEPTA failed to pay those costs.

SEPTA didn’t respond to a request for comment.

Contact the reporter at acampisi@planphilly.com

Want a digest of WHYY’s programs, events & stories? Sign up for our weekly newsletter.

It will take 126,000 members this year for great news and programs to thrive. Help us get to 100% of the goal.