Case Studies: Construction

Kenrich Assisted Contractor In Recovering Approximately 95% Of Damages Sought In Jury Trial

Summary:

Modern Continental, a leading contractor in the construction industry, entered into a contract valued at $45 million to perform civil construction for Alstom Power on a power plant in Bakersfield, California. During construction, Alstom Power approved $25 million in changes to Modern Continental’s original scope of work. They did not, however, approve an additional $25 million in costs for other requested changes which resulted in delays and disruption of Modern Continental’s work. Alstom Power believed that Modern Continental was at fault and responsible for the additional costs. Modern Continental disagreed and brought Alstom to trial in order to recover its costs as damages.

Prior to trial, Modern Continental hired Kenrich professionals to analyze documents and project schedules to determine the parties responsible for the delays and disruptions. After a thorough analysis of the company’s work, Kenrich found that Modern Continental was not at fault and should not be held responsible for the project delays. During the trial, Kenrich professionals were able to convey their findings to the jury through clear and concise testimony. As a result, Modern Continental was awarded approximately 95 percent of the damages they sought and not one penny of Alstom’s counterclaim was awarded.

Background:
Modern Continental, a leading contractor in the construction industry, was hired by Alstom Power to perform civil construction activities on a four-unit power plant in Bakersfield, California. The original contract was valued at $45 million and grew to $70 million through approved change orders by Alstom Power. Modern Continental submitted an additional $25 million worth of change orders and incurred additional costs for delay, disruption, and acceleration of the project not captured in change orders. No extension was granted to Modern Continental even though the contract price doubled. Modern Continental sought to recover damages from Alstom Power for its excess costs incurred in its construction work, as well as the $25 million in unpaid change orders.

Solution:
Modern Continental retained Kenrich professionals prior to trial to analyze project schedules and documents in order to determine the parties responsible for the project delays and excess costs. The detailed analysis performed by Kenrich professionals showed that the project delays were not Modern Continental’s responsibility. Alstom Power did not provide Modern Continental any schedule relief, despite a revised project schedule that was impacted by numerous changes from the original design. Kenrich professionals pointed to several key issues to help prove Modern Continental’s case. Additionally, Kenrich professionals found that Alstom Power, responsible for the project design, was late in providing significant design information to Modern Continental.

Kenrich’s analysis was presented at several mediation sessions, but ultimately did not prevent this matter from going to trial. During trial proceedings in Bakersfield, California, Kenrich professionals testified about their findings in a manner that was geared towards making the issues readily understandable to a jury. That testimony helped the jury determine the party at fault by making clear the key concepts and facts involved in the construction and schedule analysis. Kenrich’s succinct and focused testimony greatly contrasted with Alstom Power’s schedule expert.

Result:
The jury agreed with the assessment made by Kenrich, resulting in Modern Continental recovering approximately 95 percent of the damages sought. The company was awarded nearly $32 million of approximately the $34 million in damages sought from Alstom Power. Additionally, Modern Continental defeated all claims and counterclaims presented by Alstom Power for liquidated damages and delays. All of Alstom Power’s counterclaims totaling approximately $40 million were valued at $0 by the jury.

Kenrich personnel’s detailed work and expert testimony at trial directly impacted the favorable outcome for Modern Continental. Kenrich professionals used their extensive knowledge and experience in concisely presenting schedule analysis during trial to help educate the jury about the facts surrounding their conclusions. Kenrich professionals proved that Alstom Power was responsible for the major delays to the project and caused all of Modern Continental’s delays and increased costs.