The case involved costs associated with the fabrication of gas plant refrigeration unit skids on T&M
Steve Holloway worked as the Owner’s construction damages expert opinions in this matter – a dispute over the mechanical contractor’s billing amounts to the Owner for fabrication of gas plant refrigeration unit skids – were based in large part on our work over the past 40+ years as the mechanical contractor, as the Owner managing mechanical contractors, as the GC managing mechanical contractors and as the construction damages expert working both on behalf of and opposing various mechanical contractors in numerous disputes in Colorado and many other states, all comparable and relevant in various ways to this current matter.
Succinctly stated, Steve Holloway’s construction damages expert opinions were that the mechanical piping work on these gas plant refrigeration unit skids was not worth the amounts billed by the Mechanical Contractor. The nonexcusable/noncompensable costs resulted from the Mechanical Contractor’s numerous project management failures, rather than the alleged Owner-caused impacts:
a. Time and Materials (T&M) Not to Exceed (NTE) Purchase Order (P.O.) agreements, both generally and specifically, their use in the construction industry and the parties’ performance under these agreements were the primary issues here along with;
b. Whether or not the excessive T&M mechanical scope billings by the plaintiff Mechanical Contractor should be paid by the Owner under NTE terms;
c. Whether or not the Mechanical Contractor’s performance met its internal operational standards, the terms of the agreements and standards of practice for such a supplier;
d. Whether or not the owner’s performance met the terms of the agreements and standards of practice of such a purchaser.
The disputed mechanical costs and billings, largely for stainless and carbon steel pipe setup/fitting/welding/installation, were primarily associated with two skids (Non-mechanical billings were not in dispute).
The mechanical contractor had an obligation under T&M/NTE to estimate, budget, account for, report, control costs, administer, communicate and generally perform in a manner that at least met, and preferably exceeded, its obligations and standard practices under contract forms such as fixed price. However, it was negligent and failed to meet its obligations to the Owner by not doing so.
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