Multiple scope changes at a $209 million Public Health Command construction project led to a 50% decrease in productivity — and prolonged what should have been the final five months of the project’s timeline to 28 months.
The United States Army Corp of Engineers hireda Walsh/Gilbane joint venture(Walsh Gilbane JV) to oversee construction of the research lab facility in Aberdeen Proving Ground, MD complete with wet labs and fields labs, a vivarium, lab offices, and a warehouse amongst many other amenities needed for this contract.
According to court documents, McCorvey Sheet Metal Works is suing Walsh Gilbane JV, as well as subcontractor Kirlin Mid-Atlantic, for $3,547,141.10 for unpaid work directives, inefficiency damages, and increased general field conditions costs that went beyond the scope of the project’s initial cost.
Walsh Gilbane JV subcontracted Kirlin Mid-Atlantic to help with the HVAC and plumbing work of this research facility, who then sub-subcontracted McCorvey Sheet Metal Works to perform the HVAC work.
McCorvey’s work was set to begin January 2017 and be completed by August 2018, but, according to McCorvey, a combination of project delays, structural design deficiencies, and allegedly poor weather conditions delayed the finish to February 2021.
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The project experienced delays from the start: An agreed-upon baseline schedule couldn’t commence at the intended date because the Central Utility Plant was not finished until April 2017. Once McCorvey finally started their work, the Joint Venture submitted schedule updates to the Corps of Engineers noting many structural steel design deficiencies that would prevent the enclosure of the building ahead of the fall and winter of 2018-2019.
From mid-April 2017 to mid-May 2019, McCorvey was only able to install 75% of the ductwork including mains, branches, and various equipment. The enclosure was scheduled to be completed by the spring of 2018, and thus prevented McCorvey from moving forward on the final 25% HVAC work.
The lab had plans for 920,000 lbs of ductwork to be installed throughout its construction. The vast amount of ductwork was an especially important part of the structure because the primary goal of this facility is to provide worldwide surveillance and diagnostic analysis of “vector-borne and communicable diseases” such as Lyme disease and HIV.
The facility’s future role in fighting such illnesses was deemed important enough to prompt five separate changes in the baseline schedule from the corps of engineers: These changes asked for major changes that impacted the planned and completed work of various parts of McCorvey’s work. Additional fume stacks, humidifiers, ductwork plenums, and other ductwork necessities added 396 additional calendar days of work to the sub-subcontractor.
Walsh Gilbane JV claims these costs were the responsibility of the government due to the “Changes Clause” laid out in their general contractor agreement. A Time Impact Analysis (TIA) was submitted to the Army Corps of Engineers that further delayed the remaining work as the Corps Contracting Officer disagreed on many aspects of the analysis.
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This led McCorvey to proceed in a “piece-meal” fashion to install the remaining 230,000 lbs of ductwork in as logical a fashion as possible. These disruptions also forced McCorvey to work alongside other tradesmen who were installing drywall throughout the last 28 months of work.
Kirlin Atlantic, the subcontractor to Walsh Gilbane, issued various work tickets asking McCorvey to remove and replace various pieces of ductwork so that other trades could perform their work.
McCorvey finally completed its basic scope of work on February 12, 2021. The last 25% of the remaining ductwork started in May 2018, and took 28 calendar months to complete.
The loss in productivity because of these hindrances brought the cost of general working conditions to $2,290.05 per calendar day. These costs were lowered to $1743.13 in 2020 after McCorvey demobilized its office trailer, reduced some office equipment and rental equipment, and reduced its costs to house their traveling welders.
This was all calculated after analyzing various payrolls amounting to 40,000 additional work hours in this time frame. With 230,000 lbs of ductwork completed in this time, only 6 lbs were completed per workhour, according to this analysis.
McCorvey submitted a Miller Act claim for damages totaling $4,234,562.43, which was reduced to $3,547,141.10 over the course of December 2021.
In order to avoid lengthy legal entanglements, it’s important for all subcontractors to be well versed in their rights as provided by the Miller Act. This legislation provides many protections to subcontractors in all fields who may be subject to loss of productivity hours or unpaid work tickets like McCorvey is seeking to recover.
A legal expert can help any sub-contractor, who furnishes labor and materials in any government work, to understand these aspects of settling work agreements and make sure they get paid accordingly.