Construction Contract Termination Dispute – Assessment of Progress and Completion of Work

Litigation, North America

A storage terminal owner terminated its construction contract for a brownfield project with its contractor and filed claims for deficient and incomplete work. Baker & O’Brien was engaged to analyze the project’s completeness at the time of contract termination and determine the costs associated with completing the work. Our opinions, based on an industry-recognized methodology for milestone activity achievement, were presented in an expert report.

A storage terminal owner (Owner) contracted with a construction contractor (Contractor) for a brownfield project to upgrade the terminal’s pumping capacity and associated piping (Work). Prior to completion of the Work, the Owner terminated the contract, and filed claims for deficient and incomplete Work.

Baker & O’Brien was tasked to analyze and opine on 1) the level of completeness of the Works by the Contractor at the time of termination and 2) whether the Owner’s claimed cost to replace the Contractor, address defiiciencies, and complete the Works was reasonable.

Our consultants assessed the construction completeness based on the work breakdown structure (WBS) of milestone activities as outlined in the Contractor’s bid proposal. Using the industry-recognized method, we assessed each milestone activity WBS and assigned progress based on the physical completion of its scope.

We also assessed the reasonableness of the Owner’s claimed costs to hire new contractors to finish the remaining Work and carry out rework. We estimated the costs based on the updated work scope and applying contemporaneous market rates for the equipment, materials, and labor hours incurred by the replacement contractors.

We submitted an expert report summarizing the assessments and the parties settled the case prior to trial.

Keith C. Lee

Senior Consultant

Transportation and Storage
Engineering, Procurement, and Construction (EPC) / Standard of Care / Commercial Contracts / Expert Witness Testimony / Operations and Maintenance / Safety
North America