Engineering Cost Controls and Peer Reviews
In the insurance world, there are various appraiser firms that assist insurers with cost control when it comes to contractors. They assist with reviewing the scope and associated costs, among other things. But contractor costs aren’t the only thing that can exceed expectations for insurers.
Usually, contractor costs are far more significant than engineering costs, but occasionally engineering fees can become excessive throughout a project. This may be due to a high number of billable hours and the client doesn’t understand why there were so many hours or a scope that expands drastically, among other reasons. Our firm has been asked many times in the past to review engineering scope and costs in a variety of areas. Questions arise as to how a scope and the associated fees evolved so much from what was expected to be much more simplistic and/or cheaper.
Environmental jobs can often become expensive as scope creeps as the contaminated areas are identified and delineated, which can cause additional need for sampling and laboratory analysis, consulting, and other fees. No one knows for sure what you’re going to find when you begin excavating or drilling boreholes, but knowledgeable experts in these areas have a detailed understanding of what they are getting into after preliminary sampling and analysis, and then build a remediation plan and scope of work to go forward. But what if the plan changes or expands drastically throughout the course of the job? The question arises, was the original scope proper? Was there enough early testing done to attempt to delineate the area so a proper scope could be initially determined? If there was enough sampling and analysis undertaken, was the data properly analyzed to come up with an appropriate scope? Or did something unforeseen happen during remediation that caused the scope to unexpectedly expand? A detailed peer review can help answer these questions and identify if costs incurred were appropriate or if errors were made.
There are other non-environmental engineering situations where something goes drastically wrong and we are asked to review what happened, either from a scope or financial point of view, or both. These often are more unique situations.
For example, a building was under renovation/restoration in the summer and the roof was removed from the building. The building was tarped, but the new roof wasn’t installed until the spring. Water infiltrated the home and there was widespread water and mould damage throughout the home and the home was no longer habitable. The contractor stated that there were extenuating, unforeseen engineering issues that were discovered after the roof was removed that resulted in the delays with the new roof installation. We were asked to review the file and assess the project scope and timelines, including the engineering issues that were discovered along the way, and determine whether or not the sequence of events was reasonable or what should have been done from a planning and early engineering investigation stage to ensure this project ran more smoothly once construction began. This file ultimately went to court, and we were qualified in court to give expert witness testimony on this matter.
Another recent example involved an engineer that provided a quote for a specific scope to complete a cause and origin report to determine why a building sustained damages following a methane release into their home, and to provide recommendations on remediating the house. The scope ultimately expanded due to unforeseen circumstances and the final bill at the end of the project was approximately four times the quoted amount. We were asked to review the scope of work, report, and invoices of the other engineer to determine what was reasonable and what was not reasonable, and ultimately what an appropriate engineering fee (from a time point of view) would have been for this project with the same scope. Our review found that the hours billed to the client were extremely excessive for the associated scope. This was another file that ultimately went to court, and we were qualified in court to give expert witness testimony on this matter.
We hope all your projects run smoothly and with no issues arising. If they don’t, and you’re not sure how to sort through what went wrong on a project or assessing whether or not the scope or fees were excessive or inappropriate, feel free to reach out to us to assist you with sorting out what went wrong and what should have been undertaken.
