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  • Steve Holloway’s role as construction damages expert, along with the result our client achieved in the Hoover Dam Bypass Bridge Arbitration, will be of interest to those civil construction professionals and attorneys who are preparing or analyzing a highway, bridge, or heavy civil construction claim, and those seeking to retain a construction consultant or expert witness in litigation.

    CONSTRUCTION DAMAGES EXPERT ANALYSIS


    HOOVER DAM BYPASS BRIDGE ARBITRATION

    CABLEWAY SYSTEM COLLAPSE ARBITRATION

    The Hoover Dam Bypass Bridge Project is a spectacular, one-of-a-kind, $234 million FHWA infrastructure improvement project that reroutes U.S. 93 off of the Hoover Dam and across the Colorado River on the new bypass bridge. In 2006, eighteen (18) months into the project, the cableway system (CWS) used to move men and materials out to the middle of the bridge’s span collapsed causing damage to work in-place, schedule delays and additional costs.

    Following the collapse, the CWS supplier sued the Contractor to recover the cost of the CWS. The Contractor then filed a $35,000,000 claim against their Builders Risk policy and a $75,000,000 breach of law suit against the cableway system supplier, who then hired Holloway Consulting.

    The most unusual element of the case was the issue of whether or not the Contractor would be able to recover the same monies from both the CWS supplier and the Builders Risk insurance carrier under Nevada’s collateral source payment rules.


    (The cableway system photo at the right shows two (2) of the four cableway towers in the background, and the two overhead cables can be seen at the top of the photo. The entire system collapsed down into the Colorado River.)

    CLAIMS OVERVIEW

    The Contractor reportedly recovered $35,000,000 under their Builders Risk insurance policy and, in subsequent arbitration, attempted to recover the same $35,000,000 plus an additional $40,000,000 in delay and lost efficiency damages from our client, the cableway supplier. Our client sought to recover the cost ($5 million) of the collapsed cableway system leased to the Contractor.

    The Contractor’s argument was that the CWS collapsed because our client’s workmanship was defective, and all resultant additional costs should be paid by our client. Our client argued that the CWS collapsed due to the Contractor’s improper maintenance and operations.

    CONSTRUCTION CLAIMS METHODS AND ANALYSIS

    Because the Contractor’s contract damages claims primarily centered around issues related to overall job productivity, schedule delay and delay damages, Holloway Consulting performed various types of construction causation, delay and damages analyses, prepared damages expert reports and provided expert witness testimony on:

    MEASURED MILE ANALYSIS (TOTAL JOB COSTS, ALL COST ACCOUNTS)
    (PROGRESS GRAPHICS CREATED FOR ARBITRATION BY HOLLOWAY)


    The Contractor’s Job Cost claim was based on the argument that they would have been 100% efficient throughout the entire job, but-for the CWS collapse. Holloway Consulting helped our client defeat this element of the Contractor’s claim by preparing detailed analysis of causation and lost job efficiency damages using the Measured Mile Method. A portion of this analysis is shown below in Arbitration Exhibit 12, which summaries two major issues:

    1. The Contractor’s earned costs (Blue line) were significantly less than incurred costs (Red line) prior to the collapse, which meant that they were inefficient and their incurred costs contained a large non-compensable component; and,
    2. The Contractor’s overall job efficiency (Green line) prior to the collapse and during the CWS replacement period was unchanged, which meant that the collapse of the CWS did not adversely impact overall job productivity.

    CRITICAL PATH METHOD (CPM) SCHEDULE DELAY ANALYSIS

    A large portion of the Contractor’s claim was based on the argument that the CWS collapse delayed job completion by approximately two years. Holloway Consulting helped our client defeat this delay claim by systematically analyzing all of the Contractor’s Primavera CPM schedule updates and showing that:

    1. The job was behind schedule at the time of the collapse;
    2. The Contractor made significant earned progress during the CWS replacement period;
    3. The collapse caused only a fifteen (15) month delay; and,
    4. The Contractor’s progress was more efficient while using the replacement CWS versus the original CWS.

    TOTAL COST DAMAGES CLAIM

    The Contractor’s Total Cost Claim argument was that all costs incurred during the fifteen (15) month CWS Replacement Period in every Job Cost account (over and above the earned budget to-date for each cost account) were compensable and resulted solely from delays and inefficiencies caused by our client.

    Holloway Consulting helped our client defeat this damages claim by systematically showing, amongst other things, that each of the four key Contractor Total Cost Claim elements would fail:

    1. More reliable methods of calculating damages were available to the Contractor;
    2. The Contractor’s bid was not reasonable and was not supported by expert testimony;
    3. The Contractor’s actual costs were not reasonable; and,
    4. The Contractor was responsible for significant non-compensable costs.

    CONCLUSION

    Following a four-month arbitration, the panel issued their decision in April 2010, denying all of the Contractor’s claims and awarding our client the replacement cost ($5,000,000) of the collapsed cableway system. Holloway Consulting’s expert reports, analysis and expert witness testimony played a key role in the panel’s decision.

    The panel ruled that the Contractor was responsible for the collapse of the CWS. Therefore, the Contractor’s claims were denied and they were unsuccessful in their attempt to recover from both the builder’s risk carrier and CWS supplier under the Collateral Source Payment Rule. Moreover, the Contractor was ordered to pay our client the cost of the destroyed/leased CWS.

    Liability aside, Holloway Consulting’s analysis and testimony were instrumental in dismantling the Contractor’s causation and damages claims, and limiting the Contractor’s damages expert’s testimony through a Daubert motion.

    CALL US AT 888-545-0666 OR CONTACT US VIA EMAIL ABOUT YOUR CONSTRUCTION PROJECT.

    The Holloway Consulting Group, LLC

    Construction Damages Experts
    12081 W. Alameda Pkwy., #450
    Lakewood, CO 80228-2701

    Denver Phone: (303) 984-1941
    International Toll Free: (888) 545-0666
    Fax: (303) 716-0432

    Email: steve.holloway@disputesinconstruction.com
    Blog: disputesinconstruction.com
    Web: hcgexperts.com










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