Delay in Steam Generator Delivery

Pleasant Hill, MO, United States

Black & Veatch awarded over US$20 million in damages after typhoon delayed building project

Brief

In 2001, steam generator equipment traveling from Japan to the United States, intended for the construction of a power plant near Pleasant Hill, Missouri, was badly damaged by a typhoon in the Pacific Ocean. Black & Veatch, the project’s engineering, procurement, and construction (EPC) contractor, was forced to invest an additional US$38 million to overcome the impacts and complete the project on time.

What we did

Black & Veatch foresaw the potential obstacles created by the delay in the construction equipment and retained HKA shortly after the typhoon to assist with defining the multiple project impacts and determining how to address them. The Black & Veatch and the HKA team understood that it needed to create a precise record of what impact the accident had on the project cost and schedule.

We established procedures to monitor and track disruption and delay costs as the costs were incurred. HKA monitored the disruption cost calculations on an ongoing basis.Our experts also met with the insurance companies and their claim underwriters to provide ongoing documentation and describe the tracking and monitoring process.

Following the completion of the plant, HKA assisted Black & Veatch in using the contemporaneously prepared disruption calculations to quantify economic damages in three different disputes – against the equipment manufacturer, the ocean cargo insurance carrier, and the builders’ risk insurance carrier. HKA quantified delay and disruption costs, as well as other losses caused by the delayed steam generators. In addition to filing expert reports, HKA also provided deposition testimony in the cases against the equipment manufacturer and the ocean cargo insurance company.

Our experts also testified at trial in the third case against the builders’ risk insurance company.

Outcomes

By engaging HKA early in the process, Black & Veatch cost-effectively positioned themselves to handle any potential future litigation stemming from the construction delays or damaged steam generators.

In 2007, Black & Veatch was awarded more than US$20 million in a jury verdict, which was 100% of the damages presented by HKA’s expert testimony. Also, with our assistance, Black & Veatch successfully settled the two other litigation matters out of court.

Project Details
  • Client
    Black & Veatch
  • Year
    2001-2007
  • Value
    US$38 million
  • Services
    Expert, Delay Disruption Analysis
  • Sectors
    Power & Utilities