Reconciling £12m of increased costs and more than 400 delay days

Our client is an award-winning company that provides design, build and operate services to the water and wastewater industry. Based in both Ireland and the UK, it has a turnover of £250m. Given our success on another project with our client, we were asked to recover project time and costs that had been incurred due to changes caused by its water sector client.

Establishing a project recovery plan

The extent of the forecast actual cost overspend against the target cost, and the extent of the delay, meant that there were many issues to address. The imminent risk was delay damages which, coupled with pain share deductions, would have severely impacted our client’s short to medium term financial position.

Given these challenges, we proposed a process whereby we tackled delay days first (as deductions for delay damages were imminent) and any other target cost increases (scope changes etc) second. As the project was split into three distinct sections, we proposed to work through this on a section-by-section basis. We could align our resources which was critical for our client as input from their operational team was critical, but we had to be mindful that they were delivering a live project at the same time.

Detailed technical workshops

We held a series of face to face, multi-disciplinary workshops involving engineers, planners, commercial, legal etc where we reconciled the as-planned programme against the as-built programme. The scope of work was modifications to an existing asset, so the technical solution was complex. We worked through the design and construction sequence, identified the events impacting the programme, and collated the relevant records.

Once the full extent of the picture had been established for that section, we prepared and submitted a concise and well-written report which stated: what the event was; why our client was entitled to an EoT for that event; what the impact of the event (including the delay duration); and the valuation of the event.

Negotiated outcome

We were successful in getting our client’s water sector client to admit it had liability, at least in part, for the project delays and increased costs.. This has allowed executive negotiations to open up and, because of the quality of our written reports, an issue-by-issue approach can be taken to the discussions