By Joseph Ax
NEW YORK (Reuters) - Lockheed Martin Corp and New York City's transit authority accused each other of mismanagement on Friday at the close of a five-week trial over the much-delayed installation of a high-tech security system intended to protect commuters from terrorism.
Lawyers for Lockheed told U.S. District Judge Paul Gardephe in New York that the Metropolitan Transit Authority illegally canceled what was supposed to be a $212 million contract in 2009 after agency infighting prevented the aerospace and defense company from completing its work.
"The MTA made up claims that the work was not complete," Lockheed's lawyer Matthew Taylor told Gardephe, who has presided over the non-jury trial. "This is the very definition, Your Honor, of wrongful termination."
Lockheed is seeking $93 million of damages, the amount it claimed the MTA still owes it for work performed prior to the contract's cancellation.
But the MTA said Lockheed had not delivered a workable system, and in a countersuit has demanded that Lockheed pay about $200 million to make up for that failure.
"They had done abysmally poor development work from the get go," MTA lawyer Ira Lipton said in court.
Gardephe expressed skepticism during Friday's arguments at documents showing top MTA officials telling state agencies that the project was progressing well.
He also noted his displeasure at the fate of the project, calling it a "disaster" that will have cost taxpayers hundreds of millions of dollars no matter how he decides to rule.
"What we already know is that this project, so vital to the security of this city and its citizens, was not properly managed," he said after closing arguments were finished. "That makes this a very sad day."
Lockheed was awarded the $212 million contract in 2005, shortly after subway bombings that summer in London, to install roughly 1,000 cameras, 3,000 sensors and other technology to protect the New York City subway, the Metro-North and Long Island Rail Road commuter railroads, and the city's bridges and tunnels.
The system was scheduled to be ready by 2008, but the state comptroller now projects a 2017 completion date, or nine years behind schedule, at a cost of $520 million. Part of that delay resulted from damage sustained during Superstorm Sandy in 2012.
Gardephe is expected to rule in December at the earliest.
(Reporting by Joseph Ax; Editing by Richard Chang)