CONTRACTOR: CASE SCENARIOS
INEXPERIENCED CONTRACTOR A $22 million project for a university science center ran into problems almost immediately because of a contractor that had never before worked on this type of project. The project came in almost seven months behind schedule, at which time the contractor filed suit for $7 million, citing 1,800 RFIs as “proof” of the claim. The majority of the problems resulted from the contractor’s lack of coordination, the university architect’s interference, and problems with the mechanical/electrical/plumbing (MEP) design. Unfortunately, the MEP consultant’s insurance policy was depleted by previous claims. The claim settled for $2.2 million, funded by the university, the architect, and what was left of the MEP’s policy. LOW BID CONTRACTOR On school projects, contractor selection is usually based on competitive bidding. This process sometimes motivates contractors to underbid projects, resulting in shortcuts, substitutions, and change orders. In one case, after completing the project six months late, the contractor filed suit against the school district, alleging that the architect provided improper advice on lead paint and asbestos abatement, structural steel fabrication, and gas line location. The contractor also alleged that the architect delayed in approving roofing materials. The contractor’s claim was for $3 million on a $6 million project. The school district and architect paid $600,000 each. UNINSURED CONTRACTOR A civil engineer was hired to design an elevated HOV lane for a highway. The engineer’s consultant relied upon maps and documents provided by the transit authority to identify existing utilities. The documents did not indicate the presence of a 1925 storm drain, which had penetrated one of the pilings and put the highway in danger of collapse. Although the contractor had the contractual duty to verify the location of underground utilities, the contractor was uninsured, forcing the engineer and consultant to share the $650,000 settlement. IMPROPER MAINTENANCE AND CONSTRUCTION OVERSIGHT Many mold claims that are caused by construction error and lack of maintenance can still involve design professionals. Three years after completion of a multi-unit senior citizen facility, mold was discovered in the mechanical rooms of several units. The mechanical rooms were typically kept locked and were not opened unless the heat malfunctioned. Investigation revealed that the condensate discharge pipes were improperly placed over the drains. This error allowed water to saturate the wallboard and seep into the wall and ceiling space of the lower units. In addition, during construction, duct tape was placed over the drains during the gypcrete installation and was never removed. Because the architect provided construction phase services and allegedly did not provide sufficient maintenance advice, a contribution to the settlement was offered during mediation of the claim.
25 • From Risk to Profit - Benchmarking and Claims Studies
Victor
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