Power Plant Construction Dispute Energized by Missed Milestones

International Arbitration, Asia Pacific

After key project schedule milestones were missed for a combined cycle power plant mega project, the Contractor and its Subcontractor began faulting one another for the delays and cost escalation. Baker & O’Brien analyzed the project documents, contemporaneous records, and correspondence to determine the responsibilities and impacts for the missed milestones. Our expert opinions, rendered in a technical report, a reply expert report and various joint expert reports proved useful in resolution of the dispute.

A Subcontractor entered a lump sum contract with a Contractor for the design, construction, and commissioning of a combined cycle power plant. The mega project’s execution plan included several key schedule milestones for both parties to enable timely completion of the work. The Subcontractor had milestones to complete for various aspects of the project, such as mechanical completion, ready for commissioning, and ready for startup. The Contractor had milestones to provide primary inputs for commissioning, such as power, fuel gas, load, and other utilities.

Both parties missed key schedule milestones, and the project experienced delays and cost escalation. However, the parties disagreed on the causes and impacts of said delays on the Subcontractor’s overall execution plan. The Subcontractor alleged that delayed commissioning inputs prevented it from executing its work plan. In contrast, the Contractor maintained that the delayed commissioning inputs did not significantly contribute to the overall project delay or cost escalation. A dispute ensued in which the Subcontractor terminated the contract, and the parties commenced arbitration.

Baker & O’Brien was engaged to analyze the project documents, contemporaneous records, and correspondence. We provided expert opinions on which party caused the missed milestones and the impacts on the Subcontractor’s execution plan.

Baker & O’Brien prepared a technical expert report, a reply expert report, and various joint expert reports with opposing experts identifying areas of agreement and disagreement. The matter settled just before Baker & O’Brien’s experts provided oral testimony.

E. Shawn McDonald

Vice President, Houston Office Manager

Power Generation / LNG
Engineering, Procurement, and Construction (EPC) / Standard of Care / Expert Witness Testimony / Arbitration / Operations and Maintenance / Forensic Analysis
Asia Pacific