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The following is an excerpt from an Interface Consulting work product issued for use in litigation, arbitration, or mediation (dispute resolution). Names, dates, and other information has been modified for client confidentiality purposes.

 

Randall Companies v. Bradford Partners Pipeline Litigation

I. Introduction

On November 9, 2007, Bradford Partners Pipeline, LP (Bradford), entered into a Master Services Agreement (MSA) with Randall Companies, Inc. (Randall). After this date, Bradford requested bids for its Marble to Trinity Pipeline Replacement Project (project) in West Texas near Odessa. It appears that Bradford entered into a contract with Henry Davidson, Inc. (Henry Davidson), to provide engineering services for the project. Interface Consulting understands that Bradford was replacing its pipeline due to concerns over pipeline integrity issues.

In response to Bradford’s request for bids, Randall submitted its proposal to Bradford on December 6, 2007. Bradford effectively awarded the project to Randall on....

The Contract had an effective date of December 13, 2007. The Bradford/Randall Contract was comprised of the Master Services Agreement (MSA) and “contract” documents, which included the following....

Randall began work in early January 2008 and proceeded with the work through….Bradford issued a letter entitled “Notice of Default and Opportunity to Cure” on….The following schedule illustrates the planned versus actual schedules as well as the termination correspondence.

 

Planned versus Actual Schedule with Default and Termination Correspondence

Source: Planned Schedule; Actual Schedule, Inspector’s Daily Reports…

 

After Bradford terminated its contract with Randall, Bradford entered into a contract with Stewart Construction Company (Stewart) to complete Randall’s scope of work on the project.

 

II. Summary of Observations and Conclusions

The following is a summary of Interface Consulting’s observations and conclusions concerning the issues that we have been asked to address:

  • Randall is due… from Bradford for work that Randall completed relative to its contract with Bradford.

  • Based on Randall’s progress at termination, Randall is due…from Bradford for base contract work successfully completed. This amount is derived through the following calculation....

  • In addition to the above contract amount owed to Randall by Bradford for progress, Bradford owes Randall for extra work completed under the Contract. The amount owed to Randall by Bradford for extra work is.... The amount is derived as follows....

II.A. Randall’s Base Contract Progress at Termination and Invoice Analysis

In the two (2) following sections, Interface Consulting will address Randall’s contract progress at termination and the invoices Randall submitted to Bradford, including extra work requests.

Randall’s Base Contract Progress at Termination

Interface Consulting has analyzed the amount of work that Randall had achieved up to the time of contract termination. To perform this evaluation, Interface Consulting used various contemporaneous project documents, such as data from Bradford’s independent inspectors, the Bradford/Stewart contract scope of work, various other relevant documents, and interviews with Randall personnel to determine the work that Randall completed. In the following table, the line items of work highlighted in yellow are those line items that we understand are in dispute, which Interface Consulting specifically analyzed. 

 

Interface Consulting’s Analysis of Randall’s Base Contract Work Performed
Prior to Termination

 

Source: …

 

The parties differ in opinion as to work completed on the following: 1) clear and grade, 2) welding, 3) mainline pipeline installation, 4) cleanup and restoration, and 5) backfill padding.

In order to evaluate the actual amount that Randall performed, Interface Consulting analyzed contemporaneous project documents, depositions, interviews with the client, and other relevant information. There are project documents that identify the amount of work that Randall completed at the date of termination (April 29, 2008), including the following:

  1. Bradford’s independent inspector’s daily reports
  2. Randall’s final invoice
  3. Bradford’s replacement contractor’s (Stewart) scope of work
  4. Bradford’s Progress Evaluation Dated May 2, 2008
  5. Video of the right-of-way taken by Randall in late April 2008
  6. Interviews with Randall employees….

During the project, Bradford’s independent inspectors monitored Randall’s work progress and recorded Randall’s completed work in their daily inspector’s reports. In addition to this information.... The Bradford/Stewart contract addressed specific quantities of work to be performed by Stewart. The same Bradford independent inspectors also monitored Stewart’s work and reported actual physical material quantities installed.

The following excerpt from the inspector’s daily reports shows the quantities Interface Consulting identified for its analysis....

The Bradford/Stewart contract quantities identified in Bradford’s e-mail dated May 13, 2008, are shown in the following excerpt and were also used by Interface Consulting in analyzing Randall’s progress....

Randall Progress Assessment - Clear and Grade

Bradford has taken the position that Randall did not complete all the clearing and grading on the project and has quantified the physical amount of work completed at…linear feet. Randall has taken the position that it completed…linear feet of clear and grade work.

In its contract with Stewart to complete the remaining scope of work on the project, Bradford did not include any work related to clearing and grading....

Randall Progress Assessment - Welding

The “welding” line item of work includes both mainline welding and tie-in welds. Bradford’s inspectors reported that Randall completed 100% of the mainline welding and completed 126 tie-in welds. The Bradford/Stewart completion contract listed potentially 20,000 feet of mainline welding and 300 tie-in welds. Bradford’s inspectors indicated a total of 822 welds had been performed by Stewart but did not specify whether they were mainline or tie-in welds. The following table summarizes the project documentation available on the “welding” line item.

 

Randall’s Welding Progress Analysis

Source: …

 

Randall’s video taken of the pipeline at the time of termination indicates that very little mainline welding remained, which supports the assessment reported by Bradford’s inspectors....

Randall Pipeline “Mainline” Installation

“Pipeline installation” includes stringing, ditching, and lowering-in. Randall states that it completed…linear feet of pipeline installation; however, Bradford takes the position that Randall completed only…feet of pipeline installation. There are three (3) distinct activities included in….The following table summarizes the reported quantities installed by the various entities for pipeline installation.

 

Randall’s Pipeline Installation Progress Analysis

Source: …

 

In order to evaluate this pipeline work line item, Interface Consulting has assigned percentages to each of the activities. In addition, Interface Consulting has also included the quantities completed as reported by Bradford’s inspectors, and the resulting overall mainline installation quantity completed by Randall as of the date of termination. Bradford’s inspectors indicated that 47,615 linear feet of pipe had been lowered-in. Bradford included only 104,000 linear feet of lowering-in in its completion contract with Stewart, which indicates to me that Randall had lowered-in…linear feet of pipeline….However, we have used it for the purposes of our analysis.

 

Analysis of Randall’s Pipeline “mainline” Installation at Termination

Source: Inspector’s Daily Reports…

 

Based on our evaluation above and the progress reported by Bradford’s inspectors, Interface Consulting has concluded that…, as shown in the following graphic.

 

Randall’s Progress Assessment – Pipeline Installation

 

The Bradford inspector daily reports and the Bradford/Stewart contract do not include pipeline installation and thus....

Randall Progress Assessment - Cleanup and Restoration

Randall and Bradford differ in the amount of cleanup that they identify Randall completed prior to termination of the contract....

Randall Progress Assessment - Backfill Padding

The parties disagree as to the completion status of the backfill padding line item of work in the contract. Randall claims it has completed 87,601 linear feet of backfill, while Bradford concluded that Randall completed only 55,200 linear feet of backfill. The following table summarizes the position of the parties as it relates to backfill padding....

Interface Consulting’s Conclusion on Randall’s Base Contract Progress

Based on Interface Consulting’s analysis detailed above, Randall completed base contract work with a contract value totaling....

The original Bradford/Randall contract price was....The following table summarizes each of Randall’s progress invoices to Bradford, and amounts paid to Randall by Bradford.

 

Summary of Randall’s Progress Invoices to Bradford

Note: …

 

Randall has invoiced Bradford…for base contract work completed prior to termination. We have determined the amount of contract work that Randall completed to be.... Thus, based on Interface Consulting’s analysis, Randall is entitled to....

In addition to analyzing the amount of base contract compensation due Randall, we also reviewed the amounts paid by Bradford to Stewart to further verify Randall’s base contract progress. It appears that Bradford entered into two (2) separate agreements....

…The following illustration shows the relationship between the respective agreements and the outstanding base contract amounts due Randall.

 

Analysis of Bradford’s Payments on the Bradford/Randall Contract Amount

 

II.B. Extra Work Contract Provision

Bradford has taken the position that Randall failed to adhere to the contract’s extra work provision, and thus, Randall’s extra work requests are not valid. It is apparent that....The factual record indicates the following:

  1. Bradford failed to provide the “extra” work request form....
  2. Bradford directed, and acknowledged its direction, that Randall....
  3. As part of the parties’ agreement on addressing extra work management, Randall identified and provided notices of the extra work....

As the above information demonstrates, the parties agreed to utilize a different process for identification and management of extra work. Bradford’s position that Randall’s extra work requests are invalid because....

II.C. Analysis of Randall’s Extra Work Requests

Interface Consulting has analyzed the extra work requests that we understand are in dispute between the parties. The following table summarizes Randall’s extra work request amounts, Bradford’s position, and Interface Consulting’s analysis of those extra work requests.

 

Interface Consulting Summary – Randall Extra Work Requests Analysis

 

Bradford has not paid any of Randall’s extra work requests identified in the table above.

Additionally, Randall completed reimbursable work for “spill” clean up in the amount of....

In summary, on this extra work issue, Randall is entitled to additional contract compensation from Bradford for extra work performed in the amount of....

 

III. Discussion of Observations and Conclusions

III.A. Randall’s Base Contract Progress at Termination and Invoice Analysis

Randall’s Base Contract Progress at Contract Termination

Randall’s Base Contract Invoice Analysis

III.B. Extra Work Contract Provision

III.C. Analysis of Randall’s Extra Work Requests

Padding Issues

Change in Pipe Wall Thickness

Outstanding Contract Change Order Requests

Conclusion – Extra Work Requests

 

IV. Signature

 

V.   Exhibits