CONSTRUCTION EXPERT
PETRO-CHEMICALS PLANT, LOUISIANA
Construction Contract Dispute Summary
This Petro-chemical construction dispute involved a $130 million lump-sum, unit price, contract under which the Contractor agreed to perform a construction-only scope of work. Engineering and design was performed under a separate contract between the Owner, Holloway Consulting’s client, and a local A/E.
There was an active construction market in Louisiana at the time, and skilled craft labor was at a premium. Therefore, the Urethane Project was to be coordinated with our client’s Acetylene project such that the Construction Contractor could transfer labor from that project to the Urethane Project. However, although the Contractor personnel were to be rolled-over from the Acetylene project to the Urethane Project and thereby reduce costs, the Contractor calculated the cost of constructing the Urethane project on a stand alone basis.
Contractor’s Entitlement and Basis of Claims
The contractor’s claimed entitlements – lost craft labor productivity, construction schedule delay and schedule acceleration – arose when the planned efficiencies in the Urethane Project contract price were not realized, the 40-hour work week was abandoned in favor of 50-hour week, and labor costs increased.
Holloway’s Expert Witness Analysis, Report and Testimony
The Holloway Consulting Group, LLC was retained as the construction expert by the owner because Mr. Holloway is a Louisiana native with extensive Louisiana construction and Petro-chemical experience and expertise. Holloway Consulting performed a schedule delay analysis, labor productivity analysis and construction damages analysis, issued an expert report and provided construction expert witness deposition testimony in this litigation. Holloway found that, although the conversion to a 50 hour work week should have resulted in an early mechanical completion date, but the Contractor failed to achieve the contractual completion date. The Contractor failed to use its best efforts and diligence to anticipate, avoid and mitigate the effects of the delays to the project and the Contractor waived, via a change order, all claims for monetary damages.
The Owner also sustained damages including project personnel costs and expenses, personnel and expenses, operations group costs and expenses, and other damages. Our client achieved a favorable settlement in mediation prior to trial.
