Disputes between owners and EPC contractors, are often about schedule and budget. Baker & O'Brien was engaged to opine on the impact of the extreme climate location on project execution considering personnel capabilities and the quality of fabrication and construction work. Our findings pertaining to mitigation plans, field modifications, logistics plans, site living conditions and labor productivity were presented to an arbitral tribunal in report and orally.

A publicly-traded chemical company (Owner) planned to expand its existing plant facilities. The Owner hired contractors to: (1) relocate, refurbish, and reassemble used process equipment; (2) construct two new process units; and (3) engineer and construct utilities and infrastructure facilities.

As a public company, the Owner reported its progress and outlook for the project to its stockholders and the financial markets. These reports included forecasts of the cost and schedule for the project. The Owner ultimately reported that project costs would greatly exceed the budget and operations would be delayed by nearly a year. A group of stockholders filed a securities class action lawsuit against the Owner alleging that it had misrepresented the true cost and progress of the project, which resulted in a decline in market capitalization. In its defense, the Owner claimed that it had relied on its contractors' representations of costs and progress for the project.

Baker & O'Brien was engaged as a technical expert to advise on project management and progress reporting activities. We investigated: (1) project execution plans; (2) the project management responsibilities of the Owner and contractors; (3) the original project budget and schedule; (4) progress measurement; and (5) progress reporting. Based on these investigations, we assessed whether the contractors' progress reporting was reasonably aligned with the Owner's contemporaneous reports to its stockholders.