National developer, Stoneleigh, received a $1.8M request for equitable adjustment (REA) and time extension from its Contractor on a $100M Multi-Family Highrise and Retail project in Dallas, TX. Most of the $1.8M requested was for alleged damages due to delays, resulting from 6+ months in extended General Conditions for the Contractor. Stoneleigh had a few ways to respond. They could:
- Trust the Contractor and pay the $1.8M
- Hire a consultant to perform a delay analysis and determine the merits of the alleged damages (cost: $100K+; time 3 months+)
- Utilize SmartPM’s Software to conduct a Delay Analysis that would hold up in court for a fraction of the cost and time required by a consultant
“SmartPM™ has saved us approximately $700k on our ﬁrst engagement, minimizing traditional project oversight fees, such as construction schedule consultants and legal fees coupled with the elimination of several delay claims by the contractor. We plan to use them on all of our new development projects going forward.”
THE SMART SOLUTION
After carefully researching the options, Stoneleigh selected SmartPM™ to conduct a data-driven Delay Analysis. SmartPM’s proprietary algorithm analyzed two years of project schedule updates and produced a “Windows” style Delay Analysis in less than a day. Windows methodology is used by Forensic Delay Consultants, because it is the most accurate method of Delay Analysis, and the one that holds up in court. By using SmartPM™, Stoneleigh was able to instantly:
- Pinpoint the historical critical and near critical delay path.
- Identify areas of acceleration and compression.
- Produce a delay table to support the analysis.
THE SMART OUTCOME
In less than a day, SmartPM™ identified the true causes of delay as well as the responsible parties. The analysis found that the Contractor was:
- Managing the project with a schedule that was poorly constructed and missing “crew logic” throughout the entire schedule.
- Requesting and being granted too many time extensions that were unsupported by weather conditions or other issues that would qualify for an extension.
- Repeatedly updating the schedule with overly optimistic and/or potentially misleading changes, resulting in unrealistic end dates and erroneous critical paths.
SmartPM’s analysis resulted in the Owner paying $0 to the Contractor. SmartPM™ output was used to successfully deny a request prepared by an outside consultant, and as a result, this dispute was handled without ever going down the road of litigation.
ABOUT STONELEIGH COMPANIES
Stoneleigh Companies is a private real estate investment company focused on the acquisition and development of income-producing multi-family properties.