by Andrew Walden
Which is it: ‘Gross Mismanagement’ or ‘Potential Criminality’?
Maybe they are both right.
Honolulu Rail ‘core systems contractor’ Hitachi is suing HART over $320M of losses caused by HART’s 'Gross Mismanagement.'
Now, HART has filed a countersuit which, according to Board member Anthony Aalto, makes “allegations that could point to potential criminality.”
Predictably, Judge Kevin T. Morikone is ordering the whole thing into mediation, where the evidence will likely be covered up by some kind of sealed settlement agreement.
Meanwhile, HART’s counter suit includes a detailed analysis of how large-project government contractors manipulate the system to jack up costs. HART's detailed knowledge of Hitachi's 'criminality' demonstrates that HART was fine with this until Hitachi got greedy:
12. HART’s Counterclaim, as alleged herein, seeks a determination that HRH’s delay claim as set forth in its Complaint is not only substantially unfounded but that HRH has breached its Contract with HART and has violated HRS § 46-171(a), Hawaii’s False Claim Act, by knowingly making and using false statements and/or false records material to and in support of its claim.
13. As the Core Systems Contractor, under its Contract with HART, HRH had full and complete responsibility for scheduling its work and for providing true, accurate and timely schedules to HART. HRH’s schedules, which were to be updated monthly, allowed HART to plan the work with other contractors working on the various sites.
14. HRH’s schedules and updates were to record the actual start and finish dates of the activities within their schedules thereby setting clear guidelines and a reliable flow of information for project reporting.
15. Further, and with respect to any claim by HRH for additional compensation from HART arising out of project delays, HRH was obligated under its Contract with HART – and by law – to provide to HART true and accurate schedules showing precisely where and how HRH’s baseline schedule was impacted by delays not caused by HRH and that were not concurrent in nature with HRH’s own delays. That is, HRH’s baseline schedule as well as any schedule updates were at all times to be true and accurate for all purposes but especially so when HRH asserted compensable delay claims to HART based on alleged schedule impacts not allegedly caused by HRH.
16. Upon information and belief, in violation of its Contract with HART, and in violation of HRS § 46-171(a), Hawaii’s False Claim Act, HRH knowingly made and used false statements and/or false records material to and in support of its claims in this matter by, among other things, submitting false and misleading schedules to HART to support its $325,057,774 claim herein.
17. As more fully alleged herein, HRH
a. Failed to provide a true and accurate baseline schedule at the outset of the project and despite repeated demands by HART failed to rectify the problem;
b. Provided updated schedules to HART that did not represent HRH’s actual course of the work and critical activities therein;
c. Entered completion dates on activities that were actually not complete, masking HRH’s own delays in an effort to blame HART;
d. Made multiple improper scheduled logic and duration changes in multiple months creating a ripple effect that impacted the overall project timeline, its critical path and increased risk and costs to HART;
e. Made on average over 700 logic changes per month, which means making hundreds of logic changes on a project schedule. This sheer volume of changes rendered the original already-flawed baseline schedule essentially meaningless, and the ever-changing critical path unreliable - making it difficult for HART to determine which activities were truly crucial to the project's completion date.
f. When HART pointed out HRH errors within the schedule updates, HRH refused to correct the schedules.
According to ChatGPT, “Logic refers to the relationships between activities in the schedule—who depends on whom. A logic change happens when you modify those relationships. Logic changes can dramatically alter the critical path, sometimes more than adding days to an activity. A duration change happens when the time estimate for a specific function is revised.”
HART continues:
18. Upon information and belief, and with respect to HRH’s delay claim herein for $325,057,774, HRH knew that the schedules it submitted to HART in support of HRH’s claim were false and misleading.
19. Notably, HRH’s delay claim herein alleges that virtually every day of delay in the project throughout Segments 1 and 2 – totaling approximately 1800 days - were caused by HART when in fact, HRH knew that this was not true; and that HRH was itself responsible for the majority of the delays and/or that many of the delays alleged by HRH were concurrent delays where HRH would be entitled to a time extension but no compensation.
20. HRH’s actions as alleged herein constitute not only a breach of contract by HRH but more seriously constitute a violation of HRS § 46-171(a), Hawaii’s False Claim Act....
Tragically, HRS 46-171 carries only civil penalties.
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PDF: HART Countersuit vs Hitachi (Counterclaims begin on pg 28)
LINK: §46-171 Actions for false claims to the counties; qui tam actions.
Nov 2025: Hitachi Sues HART: $320M of 'Gross Mismanagement'