Client:
Construction Manager/ General Contractor

Client Challenge:
After performing $22 million worth of work, on their $87 million contract, the Contractor (DRG Client) was terminated. A payment dispute arose from the termination and the following issues were disputed between the parties: (1) percentage of work completed, (2) amount due at termination, (3) actual costs, (4) approved change orders, and (5) the definition of indirect costs.

Project:
Government Research Facility

Project Size:
$87 million

DRG Solution:
The DRG prepared a request for equitable adjustment on behalf of the Contractor. The request summarized a final payment of $2.9 million. The Government rejected the request, indicating that the Government did not believe the request to be accurate.

The matter then proceeded to mediation. At the mediation, the DRG presented its findings. The Government recognized the Contractor's clear entitlement and offered over $1 million to settle. The Contractor's Counsel, armed with the DRG report, recommended that the Contractor reject the offer and proceed to arbitration.

In preparation for the arbitration, the Government hired a Big 4 accounting firm to opine on the amount due the Contractor, and to prepare an expert report describing that opinion. Similarly, the Contractor's Counsel directed The DRG to prepare an expert report. The Big 4 accounting firm opined that the Contractor was not due any compensation, and that the Government was due more than $500,000. The DRG's expert report summarized the amount due to the Contractor to be $2.9 million.

Outcome:
After a lengthy arbitration, the 3 person panel ruled in favor of the Contractor. The award involved a $2.7 million payment to the Contractor.