Client:
Mechanical Contractor

Client Challenge:
After being delayed by the late issuance of design drawings and specifications, the Mechanical Contractor (DRG Client), was asked to accelerate and install its pipe hangers and piping in a different sequence from what was planned. Despite the design delay, the owner still required the Mechanical Contractor to complete its work on schedule.

Project:
Combined Cycle Power Plant

Project Size:
$300 million

DRG Solution:
Prepare an inefficiency and extra work claim on behalf of the client and present that request to the Owner to facilitate a settlement, while concurrently preparing for litigation at the direction of Counsel.

The DRG's inefficiency and extra work claims quantified the additional labor costs the contractor incurred as a result of: (1) the different means and methods used to install mechanical piping and (2) the constructive acceleration. In order to establish the contractor's entitlement to the claims for inefficiency and extra work, The DRG first compiled an extensive database of design, submittal, procurement and installation data to demonstrate, pipe hanger by pipe hanger, how the modified sequence affected production. The detailed database served as the backbone for The DRG's simple illustration of the delays which forced the contractor to deviate from its anticipated installation sequence.

In order to calculate the additional costs, The DRG utilized the contractor's progress records and man-hour data to establish the productivity levels that the contractor was able to achieve. The DRG then compared that productivity, using measured mile concepts, to the productivity that the contractor should have been able to achieve absent the design delays and acceleration impacts.

With the discovery clock ticking, The DRG actively participated in a two-month claims resolution process in which the contractor and the Owner jointly investigated the root cause of the delays and resulting acceleration on the Project.

Outcome:
Client received a settlement which amounted to 25% of its base contract, which not only covered all of its cost overruns, including legal and consulting fees, but also added over $2 million in profit to the bottom line.