Case Studies: Construction

Kenrich Personnel Assisted University Of North Carolina Hospitals In A Dispute Over Increased Costs And Schedule Delays.

Summary:

From 2001-2003, University of North Carolina Hospitals (UNC Hospitals) underwent major new construction and renovations with the construction of the Women’s and Children’s Hospitals in Chapel Hill, NC. The two hospitals were finally finished months after scheduled completion. Contractors and UNC Hospitals each claimed excess costs caused by other parties on the project. The contractors filed claims alleging that UNC Hospitals, along with the architects and engineers, were responsible for impacting their work. UNC Hospitals counterclaimed that the contractors were responsible for the excess costs on the project.

Kenrich professionals assisted UNC Hospitals and the North Carolina State Department of Justice (State DOJ) to identify causes and determine responsibility for the increased costs and schedule delays. Expert analysis performed by Kenrich professionals enabled both parties to understand the facts of the case and the real causes of the problems experienced, which ultimately resulted in a reasonable settlement for all parties.

Background:

UNC Hospitals hired multiple prime contractors to build two new hospitals and remodel portions of the existing hospital in Chapel Hill, NC. The $150 million, 600,000 square foot hospital project included demolition of an existing hospital building and parts of retained facilities, relocation of underground utilities, and construction of two new hospital buildings. Contractors on the project alleged increased costs and schedule delays due to multiple factors, including design deficiencies, ineffective construction oversight, and excessive changes. They also alleged that information missing from the original drawings caused delays and led to construction deficiencies. UNC Hospitals counterclaimed that their own workers and subcontractors needed to step in to complete and correct the contractors’ deficient work.

Solution:

Kenrich professionals were retained by UNC Hospitals and the State DOJ to assist in resolving the dispute. Kenrich professionals reviewed and analyzed claims submitted by the civil, mechanical and electrical contractors, and prepared counterclaims for work that was the responsibility of the contractor but performed by UNC Hospitals. Kenrich professionals worked directly with UNC Hospitals, the architect/engineer, and the State DOJ to assess the causes and responsibility for added costs and project delays. Kenrich professionals documented the costs incurred by UNC Hospitals to support their counterclaims. Additionally, Kenrich analyzed claims that the contractors submitted, along with their justifications of the cost and schedule impacts leading to their claims. Kenrich provided expert testimony in an administrative hearing. Kenrich personnel also presented their findings in mediation and settlement negotiations.

Result:

The expert analysis conducted by Kenrich professionals helped the parties understand the facts of the case and the real causes of the problems experienced on the projects, as well as the strengths and weaknesses of the parties’ respective positions. Through the work of Kenrich professionals, the parties retained important information that helped them to arrive at a settlement that was determined to be reasonable for all parties. As part of that settlement, UNC Hospitals’ payments were significantly less than the amounts that the contractors had claimed.