Construction dispute

Construction cost blowouts in the hundreds of millions of dollars. Two parties in heated dispute. Unlocking insights from ‘big data’ helps resolve a stalemate.

Background

Our client was the principal in a contract to construct a multi-billion dollar project in the coal sector. The contractor claimed for cost variations and delays worth in excess of $500 million, leading to a series of hard fought claims and cross-claims between principal and contractor.

The principal was suspicious of the reasons underlying the cost over-runs, but given the sheer volume of the information that confronted them, they were unable to verify those suspicions.
 

How we helped

Given the stakes, the principal chose KordaMentha Forensic based on our reputation for delivering complex analysis with forensic rigour, in ways that can be easily understood by a Court.

The question asked of us was simple – were the contractor’s claims supported by the contractor’s own data? The solution was complex.

Bringing together a multi-disciplinary team of forensic accountants, data analysts and quantity surveyors, we converted all relevant information sources, including more than 20,000 hard copy timesheets, into a common electronic format for comparison. Three different versions of electronic payroll data, with over one million rows of data, were matched, cleansed and ingested into an SQL database where it could be compared against the timesheet data and other independent data sources.
 

Result

Using our customised real-time dashboards, the principal was able to view the project at a macro level and also drill down to the micro level to investigate areas of the project that did not make sense.

The results were both startling and irrefutable. The contractor’s own data demonstrated that its claims were significantly overstated and not supported by the very documents provided in support of those claims.

Key findings to emerge from our work included:

• payroll data had been altered by the contractor in an attempt to hide relevant information
• wholesale overclaiming, to the extent that a large number of workers
• had been claimed for in excess of 24 hours a day
• over 40% of the claims made by the contractor were not supported by the contractor’s own data.

Our analysis and visualisations were so compelling that the principal requested that we ‘open the books’ to the contractor without lawyers present. The parties then settled the matter on confidential terms.