Case Studies

Commercial Solutions in Construction

The Project

• Design and construction of new £15m Cancer Centre project for Milton Keynes University Hospital, procured under the NHS P22 Major Works framework and contracted under NEC3 Option C terms.
• Several Compensation Events occurred during the project, a number of which had significant time and cost consequences.
• Disputes arose between the Trust and the Contractor as to the principle validity and value of claimed Compensation Events, resulting in an unresolved account of circa £1.5m together with disputed delay damages of £0.24m.

The Solution

• SHC was appointed by contractor Galliford Try to provide Director level leadership to resolve this account together with other matters.
• Following a period of review with the contractor’s in-house team SHC re-focussed the strategy to concentrate on two major areas. 
  1. To apply correct ‘change process’ and compensation for the new Aseptic Unit.
  2. To prepare a detailed cause and effect analysis covering multiple CE’s relating to underground services.
• A detailed end to end analysis of the Aseptic Unit procurement process identified errors made in the change process by the Trust and demonstrated how this prevented the contractor from achieving the required Completion Date.
• A detailed claim was prepared relating to various uncharted underground services and the impact of late services diversions on the remaining works.
• After allowing the Trust’s advisers reasonable time to consider the revised submissions a settlement, agreement was negotiated for the substantial proportion of the previously unagreed Compensation Events and for re-payment of the Delay Damages deducted.

The Project

• Construction of a new modular based clinical administration building for Brighton & Sussex University Hospital NHS Trust.
• NHS P22 Framework agreement project contracted under NEC3 Option C and priced at £7m.
• The project suffered from issues with road closures, changes to existing and new incoming services and weather delays with the project eventually over running by 69 weeks.
• A number of Compensation Events were issued but the Contractor and the Trust’s representative were unable to agree on the final value or the appropriate extension of time attributable.
• At the end of the project 33 Nr Compensation Events remained unresolved for which the Contractor sought approximately £1.2m and 40 weeks extension of time.
• Several unsuccessful attempts were made by the contractor to reach a negotiated solution.

The Solution

• SHC appointed by contractor Galliford Try to provide Director level leadership to this and other matters.
• With input from the contractor’s in house team each of the Compensation Events was re-worked to provide more detailed narrative explanation and supporting cost evidence.
• A delay analysis report was commissioned from an industry recognised expert analyst to complement the re-worked Compensation Events.
• A revised negotiation strategy was developed for open and transparent, but time limited dialogue, directly with the Trust in the knowledge that the route of formal proceedings would be the default alternative.
• In parallel, preparations were made in readiness to commence adjudication proceedings if the deadlock could not be broken.
• A negotiated settlement agreement was concluded with the Trust, saving both parties time and cost and helping to maintain business relationships.

The Project

• Development of 30 new residential apartments for Kaiyang (London) Ltd, a subsidiary of Dafaland
• Contractor appointed for stage 1 works under a letter of intent to carry out foundations and concrete frame to an authorised expenditure limit of £1.6m
• Developer and contractor failed to agree contract terms and price for full scope of works
• Payments ceased when letter of intent authorisation limit was reached.
• Contractor initially continued works then pulled off site following payment dispute
• Contractor commenced adjudication proceedings for disputed additional sum claimed of £830k

The Project

• Fit out of new 6000 sqm multi-purpose performing arts center for Southampton City Council comprising auditoriums, art galleries, dance and recording studios, offices etc.
• A £13m JCT 2011 Without Quantities contract forming part of a £30m overall development.
• Delays to planned completion of circa 61 weeks with disputed variations and loss & expense costs of approximately £2.5m

• Appointed by Main Contractor Galliford Try to provide strategic review of disputed account and advise on options for resolution by adjudication or other appropriate means.
• Advised and led GT commercial team to agreement of disputed variations.
• Led the GT operational and commercial teams in preparation of multi headed loss and expense claim.
• Engaged with customer and customer's QS to lead and bring about a successful negotiated outcome of all aspects of the final account and claims.
• Avoided costly and undesirable legal disputes for all parties.
• Provided independent internal commercial advice to GT executive board for management accounting purposes.

The Project

• Multi million pound major remedial works to existing County Council strategic highways network.
• Programme of repairs to carriageways, associated slip roads, bridges and subways including live traffic management and out of hours working.
• NEC Option A design & construct main contract
• Significant historical customer and public relationship issues and commercial disputes

• Built and led the project team operationally and commercially directing overall strategy for carrying out remedial works 
• Acted as senior level customer contact for the Contractor with the County Council
• Led the initiative to achieve project critical re-engagement of design consultant in parallel with pre-existing and ongoing commercial dispute
• Supported main contractor in preparation of significant downstream commercial claim
• Supported main contractor in mediation process

The Project

• 37Km onshore cable trenches with associated substation infrastructure, ductwork, cable conduits and crossings.
• Supporting what will be the worlds largest off shore wind farm being developed in the North Sea off the Est Anglia coast by Iberdrola/Scottish Power
• NEC 3 Option B with bespoke Z clause amendments, contract value circa £15m

• Provided independent detailed contract appraisal for infrastructure contractor, advising on contractual risks, opportunities and recovery entitlements
• Provided review of Compensation Event entitlements and recommendations for strategy and actions required to realise optimal change event recovery

• The largest motorway service station in the UK at time of construction comprising 36 pump PFS, 675 car parking spaces plus 60 HGV's, budget hotel, food courts, restroom facilities and amenities space.
• JCT design and construct contract with amendments, construction value circa £25m
• Significant challenges for contractor throughout project lifespan including negotiation of contractual risk model, unforeseen ground conditions and integration of Employer's contractors.

• Led a strategy of regional management intervention and support to provide hands-on problem solving for the Employer and the project team.
• Assumed role of key customer contact and lead negotiator, finding innovative solutions to resolve a range of potentially deal-breaking issues.
• Key role in facilitating final account settlement between contractors project team and Employer.