Settlement of Contractor Claims for Construction of a Federal Building in Hawaii

LCD-77-311: Published: Jan 12, 1977. Publicly Released: Jan 12, 1977.

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A claim was settled by the General Services Administration (GSA) for $5.3 million in connection with the construction of a federal court house and office building in Honolulu, Hawaii. Construction problems, including large quantities of water flowing through the site, added $9.1 million to the project cost and delayed the project by about 19 months.

The settlement resulted, in part, from GSA acts and omissions during the project's design and construction. It could not be determined if the GSA decision to settle for $5.3 million was reasonable. GSA failed to test the site adequately; it changed the foundation design without making additional tests and eliminated the contract requirement for an on-site dewatering expert. GSA also failed to implement fully a 1967 recommendation to maintain inhouse experts to review foundation designs, interpret soil tests, and correct foundation problems occurring during construction. GSA made several concessions for having the contractor resume work; these concessions provided support to the contractor's allegations of wrongdoing. In addition, GSA failed to provide adequate resources to vigorously litigate the claims.

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