An Oregon based plaintiff entered into an agreement with defendant general contractor under which defendant agreed to furnish all labor, material, shipping and project management necessary to effectuate the construction of plaintiff’s villa. Plaintiff alleges the defendant failed to complete construction within the allotted time, exceeded costs, refused to properly manage the project, resulting in delays, and failed to timely pay contractors.
Further, the plaintiff alleges that the president of the general contractor acted in his own personal interest, converting $1.5 million of plaintiff’s funds for his own personal use. He also issued fraudulent statements regarding the progress of the project.
Claims include breach of contract, fraud and conversion.
Question(s) For Expert Witness
- 1. What caused the cost overruns and delays?
- 2. Are these typical problems with construction of this type?
Expert Witness Response
The unknown subsurface conditions of the villa site appear to be the single most significant cause for building cost escalation and schedule delay affecting the building performance of defendant. The cost impact of the subsoil conditions is illustrated by the total costs shown as $255,070 for excavation incurred, which is approximately three times the initial budget of $86,080. The contractor that followed defendant was plagued by similar cost escalation influences.
Compounding the cost and schedule impacts of extreme subsoil conditions prevalent under the site is the fact that the site is difficult to access and comprised of significant inclined slope conditions. Such conditions pose uniquely challenging logistics for the building contractor and have a demonstrable cost impact. Restricted access to the site caused increased costs to bring workers, construction equipment, and building materials to the site; the inability to fabricate building material storage adjacent to the building site caused increased costs in the storage, availability and delivery of building materials to the building site; and such extreme site conditions increase the costs associated with the provision of sanitary facilities during construction, the disposal of construction wastes, and the delivery of construction water and electric power.
These problems are typical for construction in this region. Additional, lengthy delays due to weather and the unavailability of skilled workers can wreak havoc on a project.
The expert has more than 40 years of experience in the engineering-construction industry. He has been directly involved with the design and construction of large infrastructure, industrial and institutional projects around the world.