Bakersfield Power Plant

Brief

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

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

What we did

Modern Continental retained HKA prior to trial to analyse project schedules and documents in order to determine the parties responsible for the project delays and excess costs. The detailed analysis performed by HKA showed that the project delays were not Modern Continental’s responsibility.

The manufacturing firm did not provide Modern Continental 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 Modern Continental’s case. Additionally, HKA found that the manufacturing firm, responsible for the project design, was late in providing significant design information to Modern Continental.

HKA’s analysis was presented at several mediation sessions, but ultimately did not prevent this matter from going to trial. During trial proceedings in Bakersfield, California, HKA experts testified about their findings in a manner that was geared towards making the issues readily understandable to a jury. That testimony helped the jury determine the party at fault by making clear the key concepts and facts involved in the construction and schedule analysis. HKA’s succinct and focused testimony greatly contrasted with the manufacturing firm’s schedule expert.

Outcomes

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

HKA’s detailed work and expert testimony at trial directly impacted the favourable outcome for Modern Continental. Our experts used their extensive knowledge and experience in concisely presenting schedule analysis during trial to help educate the jury about the facts surrounding their conclusions, and proved that the manufacturing firm was responsible for the major delays to the project and caused all of Modern Continental’s delays and increased costs.