Large-scale construction projects typically involve multiple entities in a complex sequence of independent events and transactions. Thus, when disputes undoubtedly arise, the engagement of professionals with construction industry experience, as well as an understanding of the dispute resolution process, is critical.
Hemming Morse brings both the necessary experience and comprehensive knowledge to these proceedings.
Our professionals regularly assist a range of project participants, including owners, contractors, engineers and designers, lenders, sureties, and insurance companies in disputes ranging from relatively simple construction cost accounting issues to complex claims involving millions to hundreds of millions of dollars. As a result, we are familiar with the pricing and presentation of these issues, including extra work, delay, disruption, loss of productivity, completion and repair work, and equitable adjustment and termination costs. Our experience also includes overhead, construction cost, and special purpose audits, cost monitoring, quantification of allowable costs, proper pricing of change orders, fraud and forensic investigations including false claims, and compliance with contractual provisions.
International Arbitrations
Quantification of Termination Claim
A European aerospace contractor was contracted by a U.S. satellite telecommunication company to construct a certain number of low-earth orbit satellites (LEOs). The dispute between the parties was regarding the proper amount due under the contract for termination of a portion of the contract. Hemming Morse responded to the contractor’s expert calculation of termination damages, critiquing the methodology and level of substantiation of calculated damages. Our expert provided written and oral evidence at the arbitration hearing in New York City conducted by the American Arbitration Association International Centre for Dispute Resolution.
Quantum Evaluation of Repair and Completion Costs On U.S. DOD Project In Korea
A prime contractor made a claim in arbitration against one of its major subcontractors on a project to construct a data facility in Korea. The dispute was due to the design and installation deficiency of the fire suppression system that failed just prior to project turnover to the Department of Defense (DOD) causing extensive damage to new construction. The prime contractor was required to repair and complete the subcontractor’s work. Hemming Morse validated the accuracy of the prime contractor’s project costs and ascertained and calculated damages related to the repair and completion of the primary subcontractor’s work. Our expert provided written and oral evidence at the arbitration hearing at the International Centre for Dispute Resolution in London conducted under rules of the International Court of Arbitration of the International Chamber of Commerce (ICC).
Quantum Evaluation of Disputed Sums on EPC Contract for New Mining Operations In South America
A U.S. based construction management (CM) firm entered into an engineering, procurement and construction (EPC) contract with the owner, a foreign-based corporation related to a South American metals mining operation. The CM and the owner had cross-disputes regarding invoicing and payments. Hemming Morse substantiated the CM’s claims for amounts owed on the EPC contract and evaluated owner’s counter-claims for alleged billing errors and rectification damages. Our expert provided written evidence as part of the arbitration procedural timetable.
Analysis of Diversion of Funds Associated With the Purchase and Sale of Middle-East Engineering Division of International Design Firm
A U.S.-based engineering design firm purchased the Dubai-based engineering division of a UK-based design firm. A dispute between the parties occurred shortly after the sale related to amounts due purchaser from amounts received by seller from joint clients. Hemming Morse independently analyzed and traced amounts received by seller on account of the purchaser that seller diverted. Our expert provided written and oral evidence as part of an arbitration under the Dubai International Arbitration Center.
Heavy Civil
Delay/Extra Work – Kiewit Bridge
The construction of a bridge over the Sacramento River for the City of Redding was impacted by claimed differing site conditions. Contractor claimed additional costs due to delay and acceleration including additional labor costs resulting from loss of productivity caused by the adverse effect of working in extreme heat as well as heavy smoke from nearby wildfires. The Hemming Morse expert validated the accuracy of contractor’s job costs and used these costs to calculate contractor’s cost claims for acceleration and delay, testifying in both deposition and arbitration.
Design/Engineering Deficiency – Bart Extension
A design-build contractor under-estimated costs by tens of millions of dollars in its successful fixed-price bid for the extension of a heavy rail commuter train in Northern California. The under-estimated costs were associated with design and engineering deficiencies in the pre-bid proposal by the design-build contractor’s design engineering consultant. Post-award, further design deficiencies caused the design-build contractor to incur additional costs that contractor contended would have otherwise been avoided had the engineering design been correct. Hemming Morse ascertained and calculated the under-estimated costs associated with the pre-bid design errors as well as the actual post-bid costs for delay and extra work caused by the design engineering errors.
Delay/Extra Work – San Vicente Dam Raise
The prime contractor on a project to raise the height of a dam by 50 percent incurred additional costs caused by, among other things, the owner’s changes in specifications of the roller-compacted concrete and delay. Hemming Morse validated the accuracy of contractor’s job costs using the same to calculate contractor’s claims for delay, loss of productivity and extra work. Our expert testified at deposition and trial.
Balfour Beatty – Several
Subcontractors on several transportation matters including a transit terminal hub, light rail system, and heavy rail system brought delay claims while working on these projects. Hemming Morse evaluated such claims and determined the level of substantiation necessary for each of these claims.
High Speed Rail Project
A joint venture is building a segment of a high-speed rail project in the western United States. The project is experiencing multiple delays due to a number of factors. Hemming Morse analyzed the joint venture’s time-related overhead costs and estimated the time-related daily rate for certain periods of time associated with the joint venture’s claims for project delay it is submitting to the state agency.
Parkway Project
A joint venture was formed to design and construct a parkway project in a Northern California city as part of a public-private partnership, or P3, project. The joint venture hired a design contractor to produce a design for all facets of the project. Hemming Morse evaluated the design contractor’s internal time and billing processes and controls. We also analyzed costs and billings submitted by the design contractor to compare actual costs incurred to total billings pursuant to potential litigation, as well as review and preparation of affirmative claims for monetary damages including delay and disruption claims.
Medical
Consultation on Reimbursable Costs Sutter Health – Several
A not-for-profit health provider built or renovated numerous facilities in California using Lean Integrated Project Delivery (IPD) contracts. Hemming Morse was involved in the pre-contract phase of the negotiations with the prime contractor and the trade contractors associated with several of these projects. We assisted the health provider by evaluating and determining the reasonableness of hourly labor rates and overhead rates for contractors and design and engineering firms. We also conducted project cost audits to confirm that the contractors and design and engineering firms were complying with the cost reimbursement terms of the IDP agreements.
UCLA – Westwood/Santa Monica Hospitals
Two major hospital projects were built and renovated to better withstand earthquakes. Design changes, delays and rising construction costs more than doubled the original contract sums and resulted in claims from the prime contractor and its subcontractors over $100 million. Hemming Morse analyzed the project costs of the prime contractor and its subcontractors related to its claims, identifying potential false claims and calculating proper quantum of delay and additional direct costs related to extra work and claimed loss of productivity. The owner also asserted that many of the contractor’s claims were the result of design errors by the projects’ design consultants. Hemming Morse evaluated and calculated owner’s claims for economic damages, including loss of revenue and costs paid to contractors caused by design errors.
Hospitality/Education
Consulting On Contractor and Subcontractor Mechanic Lien Claims And Expert Analysis of Owner’s Construction Defect Claim Regarding City Center, Las Vegas
One of the hotel portions of an $8.5 billion hotel and gaming project in Nevada was halted due to substantial structural defects. Hemming Morse evaluated affirmative claims brought by the owner against the general contractor and its subcontractors. Our expert prepared numerous reports and testimony at deposition prior to the matter being settled before trial. This work included evaluating contractor and subcontractor mechanic lien claims, identifying costs under a cost-reimbursable costs that did not comply with the contract, and calculating owner’s affirmative claims related to the construction defects leading to the loss of the hotel.
Fox Theater – Turner
A general contractor entered into a cost plus guaranteed maximum price (GMP) contract to renovate a theater in downtown Oakland. Hemming Morse evaluated and determined the actual costs incurred and the fees earned on the project. We also evaluated and determined the nature of the potential claim against the general contractor.
The Broad Museum
The owner sued its specialty glass subcontractor for economic damages caused by delays in fabricating and installing distinctive design features of a contemporary art museum in Los Angeles, California. The specialty glass subcontractor counter-sued for extra work and delay damages. Hemming Morse evaluated and calculated the parties’ respective damage claims.
Energy
Mehoopany – Wind Farm
The owner contracted with the prime contractor to construct a 9,000-acre wind farm in Pennsylvania. The prime contractor claimed over $50 million in damages related to delays, scope changes, inefficiencies and unforeseen site conditions. The owner claimed approximately $20 million in liquidated damages. Hemming Morse independently evaluated the prime contractor’s claims and calculated owner’s liquidated damages claim.
Consulting on Claimed Additional Costs by Contractor on Solar Farm Project
A contractor was retained to build a solar farm in the California desert. The contractor sued the owner for additional costs associated with differing site conditions. Hemming Morse evaluated the claims brought by the contractor and analyzed the actual costs incurred during the project as part of parties’ mediation settlement process.
