St. John’s Regional Medical Center/Catholic

• Client: Mac Tec Engineering Consulting
• Client Type: Contractor
• Service: Claims Preparation & Analysis
• Claim Amount: $75M
• Location: Los Angeles, California

This medical center experienced water infiltration and associated mold at the patient room showers and exterior facade (i.e.: windows and EIFS). The medical center pursued a remediation which was either not fully successful or did not address the total mold remediation, as additional mold was discovered at or about the time the remediation was substantially complete. The medical center pursued another remediation approach and is seeking recovery of the cost for this remediation from all those involved with the original remediation. The recovery cost being sought is in excess of $200 million.

Strategy’s role has been to evaluate the recovery cost and associated schedule and to prepare detailed order of magnitude estimates and schedules which indicate that the recovery cost and scope of work being pursued are excessive and not fully recoverable. The evaluation has been in conjunction with industrial hygienist and mold remediation experts to identify the excessive remediation scope of work.

Detailed order of magnitude estimates and schedules were prepared in several progressive phases or steps as follows:

Phase 1 – The recovery cost estimate and associated project schedule was evaluated and recreated using industry standard unit cost and production rates. The recreated order of magnitude estimate indicated that the recovery cost being sought was excessive by as much as 40 percent and the associated project schedule was of an excessive duration.

Progressive Step by Step Analysis – Using the Phase 1 detail order of magnitude estimate using industry standard unit cost and production rates, additional estimates were prepared, further reducing the recovery cost being claimed. The Step by Step analysis estimates included adjustments and evaluation as follows:

• Added value and betterment
• Unrelated scope and improvements (i.e.: ADA modifications)
• Excessive containment and remediation procedures which were outside accepted standards

These progressive order of magnitude estimates and schedules indicate that the original recovery cost was excessive by as much as 70 percent and that the project schedule duration could be reduced.

The medical center re-evaluated their remediation procedures and pursued less costly containment and remediation procedures, thereby reducing the recovery cost being sought.