Nuclear Power Plant

Brief

A leading contractor in the construction industry was employed by a multinational manufacturer to perform civil construction activities on a four-unit nuclear power plant in California. The original contract was valued at US$45 million and grew to US$70 million through approved change orders by the manufacturing firm.

The contractor submitted an extra US$25 million in change orders and incurred additional costs for delay, disruption, and acceleration of the project not captured in change orders. No extension was granted to the contractor even though the contract price doubled. The contractor sought to recover both damages from the manufacturing firm for its excess construction costs and the $25 million in unpaid change orders.

What we did

HKA was retained by the contractor prior to trial to determine the parties responsible for the project delays and excess costs. Our analysis of project schedules and documents showed that the project delays were not the contractor’s responsibility. The manufacturing firm did not provide the contractor with any schedule relief, despite a revised project schedule that was impacted by numerous changes from the original design.

HKA pointed to several key issues to help prove the contractor’s case. We also found that the manufacturing firm responsible for the project design was late in providing significant design information to the contractor. Our analysis was presented at several mediation sessions but ultimately did not prevent this matter from going to trial.

During trial proceedings, HKA experts testified about their findings in a manner that was geared toward making the issues readily understandable to a jury. This testimony helped the jury determine the party at fault by clarifying the key concepts and facts involved in the construction and schedule analysis. Our succinct and focused testimony greatly contrasted with that of the manufacturing firm’s schedule expert.

Outcomes

The jury agreed with the assessment made by HKA, resulting in the contractor recovering approximately 95% of the damages sought. The contractor was awarded nearly US$32 million of the approximately US$34 million in damages sought from the manufacturing firm. Additionally, the contractor defeated all claims and counterclaims presented by the manufacturing firm for liquidated damages and delays. The manufacturing firm’s counterclaims totaling approximately US$40 million were valued at US$0 by the jury.

HKA’s detailed work and expert testimony at trial directly impacted the favorable outcome for the contractor. Our experts’ extensive knowledge and experience enabled them to concisely present schedule analysis during trial that educated the jury about the facts surrounding their conclusions. HKA ultimately proved that the manufacturing firm was responsible for the major delays to the project as well as all contractor delays and increased costs.