RTI Construction Sevices Case Study: Residential/Commercial Development in London

The developer entered into an agreement with a contractor for the construction of a residential and commercial development.  The contract was based on the JCT ’98 with a Bill of Approximate Quantities in the sum of £4,025,000.

Disputes arose on the project with regard to:

• Extensions of time
• Loss and/or expense
• Value of final account

On completion of the project, RTI was appointed as independent experts to review the value of the final account.

The final account submitted by the contractor was in the sum of £6,100,000, this being a complete re-measurement of the works.  The format of the final account measurement was based on trade subcontractor measurements and hence did not align with the Bill of Quantities that had been measured on an elemental basis.  The standard of information provided by the contractor was poor.

On investigation the measurements were found to be incorrect and moreover there were a considerable number of duplications.  In the final analysis it was established that there were duplications in the measurement of the works, equating to nearly 20% of the submitted final account.  This amounted to an over-payment to the contractor of approximately £300,000.

RTI prepared a report on the irregularities of the final account in contemplation of legal proceedings.  As a consequence of the report, the parties reached a settlement in which a substantial sum of the over-payment was returned to the developer.