FILED
`
`#152
`l/ 05; __
`GTE-5M COCHRAN-WILSON, CLERK
`BY’ngHng—D'C'
`
`IN THE CIRCUIT COURT OF UNION COUNTY, ARKANSAS
`CIVIL DIVISION
`
`GLOBAL INDUSTRIAL, INC. d/b/a
`GLOBAL TURNAROUND
`
`PLAINTIFF
`
`v.
`
`CASE NO. 70CV—16-76-6
`
`LEIDOS CONSTRUCTORS, L.L.C. et a].
`
`DEFENDANTS
`
`and
`
`EL DORADO AMMONIA, LLC
`
`EL DORADO CHEMICAL COMPANY; and
`
`LSB INDUSTRIES, INC.
`
`V.
`
`CROSS-CLAIMANTS
`COUNTER CROSS-DEFENDANTS
`
`LEIDOS CONSTRUCTORS, LLC;
`LEIDOS ENGINEERING, L.L.C.; and
`LEIDOS, INC.
`
`CROSS-DEFENDANTS
`COUNTER CROSS-CLAIMANTS
`
`Benham’s Reply in Support of its Motion for Leave to Change Party Name
`
`This should be a noncontroversial motion to change the case caption so that it accurately
`
`reflects the parties’ names and is consistent with the pleadings. See Ark. R. Civ. P. 10(a)
`
`(providing that the title of an action must include “the names of all the parties”). The name Leidos
`
`Constructors, LLC no longer exists and that company has not operated since April 2016, which is
`
`when The Haskell Company (“Haskell”) purchased Leidos Constructors, LLC and changed its
`
`name to Benham Constructors, LLC (“Benham” or “Benham Constructors”).
`
`It was Benham
`
`Constructors that in May 2016 completed the projects that form the basis of the present action.
`
`“Leidos Constructors, LLC” should therefore be replaced with “Benham Constructors, LLC” in
`
`the case caption and style.
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 1 OF 20
`
`1
`
`

`

`Plaintiffs LSB Industries, El Dorado Chemical Company, and El Dorado Ammonia, L.L.C.
`
`(collectively, “LSB”) have long recognized that Benham Constructors is the proper party. LSB’s
`
`original demand letter is based on alleged “material breaches by Benham Constructors, LLC,” and
`
`LSB’s amended cross-complaint, filed on August 8, 2018, provides on page 1 that LSB is asserting
`
`claims “against (1) Benham Constructors, L.L.C., formerly known as Leidos Constructors, L.L.C.,
`
`formerly known as SAIC Constructors, L.L.C.” LSB nevertheless objects to properly naming
`
`Benham Constructors in the case style and caption and argues that Benham’s motion is a tactic of
`
`delay and confusion. However, using the correct party names cannot possibly delay the trial, and
`
`Benham will not argue that it should. Moreover, referring to the parties by their proper names
`
`eliminates (rather than creates) confusion at trial: when Benham’s witnesses testify about their
`
`work for Benham Constructors, the jury will know which party those witnesses represent.
`
`The Court should grant Benham’s motion because (1) Benham Constructors is the correct
`
`party name, (2) forcing Benham to proceed under the wrong name will create confusion, and
`
`(3) granting this motion will not cause any delay.
`
`1.
`
`Leidos Constructors, LLC is now Benham Constructors, LLC
`
`There is no real dispute that Leidos Constructors is now Benham Constructors. LSB does
`
`not seriously contend otherwise; instead, LSB’s principal argument is apparently that Benham
`
`must prove this by affidavit. However, the Arkansas Rules of Civil Procedure do not impose this
`
`requirement—and,
`
`in any event, Benham has now mooted this argument by providing the
`
`superfluous affidavit. See Declaration of Michael B. Gwyn (“Gwyn Decl.”).
`
`Arkansas Rule of Civil Procedure 7(b)(2) provides that a motion “shall include a brief
`7
`supporting statement of the factual and legal basis for the motion.’ Benham did exactly that.
`
`Paragraphs 1-4 of Benham’s motion explain, among other things, that:
`
`o
`
`o
`
`Benham Constructors is the successor-in-interest to Leidos Constructors; and
`
`Leidos Constructors no longer exists.
`
`That is reason enough to grant the motion.
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 2 OF 20
`
`2
`
`

`

`LSB’s argument that Benham also was required to provide a sworn statement is wrong.
`
`LSB does not cite any authority from Arkansas for this point, and instead quotes out—of-context an
`
`unpublished Delaware Superior Court opinion construing Delaware Civil Rules 10 and 15(a) and
`
`certain Delaware statutes. See Delaware Dep’t of Transp. v. Mactec Eng ’g & Consulting, Inc,
`
`No. CIV.A. SllC0103l RES, 2011 WL 6400285, at *1 (Del. Super. Ct. Dec. 14, 2011). That
`
`Delaware case has nothing at all to do with Arkansas law or whether a party has the right to litigate
`
`under its proper name.1
`
`Regardless, Benham has now attached a sworn statement from Michael Gwyn, former
`
`President of Benham Constructors, LLC, and former President of Haskell’s Federal, Healthcare &
`
`Energy Group, to this reply. Mr. Gwyn’s sworn statement provides:
`
`0 On April 16, 2016, Haskell acquired Leidos Constructors, LLC. But Haskell did not
`purchase either Leidos Engineering, LLC or Leidos, Inc. Gwyn Decl. ll 3.
`
`o Haskell changed Leidos Constructors’ name to Benham Constructors, LLC, and Benham
`Constructors has used that name exclusively since April 2016. Id. W 4—5.
`
`0 Leidos Constructors, LLC no longer exists.
`
`Id. $1 6.
`
`o Benham Constructors is not affiliated with Leidos, Inc. or Leidos Engineering, LLC.
`117.
`
`Id.
`
`2.
`
`LSB’S apparent plan to confuse the jury by calling several different entities “Leidos”
`is not a reason to deny Benham’s motion
`
`Benham filed this motion in part to “aid the factfinder and the Court in distinguishing
`
`between the parties during Phase II of the litigation.” Mot.
`
`11 4. LSB argues that granting
`
`Benham’s motion and updating the caption to reflect Benham’s real name will “cause significant
`
`and unjustifiable confusion” for the jury. Opp. at l 1. The opposite is true. Nothing could confuse
`
`I LSB’S other cases are equally irrelevant. They stand for the uncontroversial proposition that
`evidence outweighs argument. In Stan v. Vences, for example, the court dismissed a claim for lack
`of subject-matter jurisdiction because the uncontroverted evidence demonstrated that the plaintiff
`was covered by worker’s compensation and this evidence outweighed contrary attorney argument.
`571 S.W.3d 24, 31 (2019), ren ’g denied (Mar. 6, 2019). Likewise, McCoy v. Robinson held that
`an attorney’s word could not substitute for the requirement to file a proof of service, see 550
`S.W.3d 33, 40 (2018), and Flentje v. First Nat. Bank of Wynne held that arguments of counsel are
`not evidence for purposes of summary judgment, see 11 S.W.3d 531, 539 (2000).
`
`"3
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 3 OF 20
`
`

`

`the jury more amid a sea of corporate names than having the wrong entity listed on the jury form
`
`and having LSB call Benham by the wrong name throughout trial.
`
`To sharpen the point, LSB spends seven pages of its opposition canvassing the trial record
`
`and discovery for every mention of Leidos, Leidos Engineering, Leidos Constructors, Benham,
`
`Haskell, or Merrick. See Opp. at 4-10. The fact that all of those names appear in the record
`
`underscores that the case style should reflect the correct names of the parties, rather than incorrect
`
`names. LSB’s expressed desire to try to confuse the jury by telling it that all of the defendants are
`
`one collective entity known as “Leidos” is not a reason to deny the motion, but
`
`instead a
`
`compelling reason to grant it so that the jury will not be confused. Nor does it undermine
`
`Benham’s right to be called by its correct name. See Ark. R. Civ. P. 10(a) (providing that the title
`
`of an action must include “the names of all the parties”).2
`
`3. Granting Benham’s motion will not cause delay
`
`Finally, LSB argues that Benham’s motion is a “transparent ploy to further delay the trial
`
`of this case.” Opp. at 12. That is pure fiction. Benham’s motion nowhere suggested (and Benham
`
`does not argue) that changing the case caption has any bearing on the trial date. Rather, this is a
`
`simple administrative request that the case caption reflect Benham’s accurate legal
`
`identity.
`
`Moreover, the Court will recall that this matter does not currently have a date scheduled for trial,
`
`as the Court struck the previous trial setting of September 21, 2020, due to the difficulties of
`
`conducting such a complicated trial in compliance with then-existing COVID-19 restrictions.
`
`While the parties await the sitting of a new Circuit Judge, and the scheduling of the trial of this
`
`matter by the new Judge in 2021, now is the most appropriate time to allow the administrative fix
`to the current case caption. By doing so, the Court will assist any new Judge by transferring the
`
`case with all the correct party names properly included in the case caption.
`
`2 LSB’s suggestion that Benham has refused to present a 30(b)(6) corporate representative witness
`on Topic 1 dealing with corporate structure, Opp at 10, is undermined by the evidence LSB cites,
`which shows that Benham has not objected to offering a witness on that topic See Opp. at 10, Ex
`S (listing the topics objected to by the defendants, beginning with Topic 2).
`
`4
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX-OOOOOO185792 PAGE 4 OF 20
`
`

`

`Conclusion
`
`Benham respectfully requests that this Court amend the case style and caption to refer to
`
`Benham Constructors by its correct name.
`
`Respectfully submitted,
`
`SUSMAN GODFREY L.L.P
`
`/S/ M
`
`. She herd
`
`Matt ew .Shepherd
`LAW OFFICES SHEPHERD & SHEPHERD, PA.
`
`200 N. Jefferson, Suite 600
`
`El Dorado, AR 71730
`
`(870) 862-2087 Telephone
`(870) 862-2747 Facsimile
`mshepherd@shepfirm.com
`
`Neal S. Manne
`
`State Bar No.: 2017083
`
`Chanler A. Langham (Pending PHVAdmission)
`Adam Carlis (Pending PHVAdmission)
`1000 Louisiana St, Suite 5100
`
`Houston, Texas 77002
`
`(713) 651-9366 Telephone
`(713) 654-6666 Facsimile
`nmanne@susmang0dfrey.com
`c1angham@susmangodfrey.com
`acarlis@susmang0dfrey.com
`
`Drew D. Hansen (Pending PHVAdmiSSion)
`SUSMAN GODFREY L.L.P.
`
`1201 3rd Ave., Suite 3800
`
`‘
`
`Seattle, WA 98101
`
`(206) 516-3880 Telephone
`(206) 516-3883 Facsimile
`dhansen@susmang0dfrey.com
`
`Brittany Fowler (Pending PHI/Admission)
`SUSMAN GODFREY L.L.P.
`
`1900 Avenue ofthe Stars, Suite 1400
`
`Los Angeles, CA 90067-6029
`(310) 789—3 100 Telephone
`(310) 789-3150 Facsimile
`bfowler@susmangodfrey.com
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 5 OF 20
`
`5
`
`

`

`Patrick D. Wilson (99073)
`Jessica Pruitt Koehler (2015226)
`WRIGHT, LINDSEY & JENNINGS LLP
`
`200 West Capitol Avenue. Suite 2300
`Little Rock, AR 72201
`
`(501) 371—0808 Telephone
`(501) 376-9442 Facsimile
`
`ATTORNEYS FOR DEFENDANT
`
`BENHAM CONSTRUCTORS, LLC
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on November 5, 2020, I electronically served a true and correct copy
`of foregoing on the following counsel of record:
`
`David E. Jones
`Todd E. Kolczun
`LOGAN & LOWRY LLP
`102 East Third Street
`PO. Box 452469
`
`Grove, OK 74345—2469
`djones@loganlowry.com
`tkolczun@1oganlowry.com
`
`R. Jeffery Sawyer
`STONE & SAWYER PLLC
`
`315 East Main
`
`El Dorado, Arkansas 71730
`Counselfor Global Industrial, Inc.,
`d/b/a Global Turnaround
`
`James R. Leahy (pro hac vice)
`Stephen Edmundson (pro hac vice)
`Katie Tipper-McWhorter (pro hac vice)
`Aimee Housinger (pro hac vice)
`GREENBERG TRAURIG, LLP
`
`1000 Louisiana Street, Suite 1700
`Houston, Texas 77002
`leahyj@gtlaw.com
`tipperk@gtlaw.com
`housingera@gtlaw.com
`
`F. Mattison Thomas, III
`
`103 East Main, Suite D
`El Dorado, AR 71730
`matt@southarklegal.com
`
`Joseph R. Falasco
`QUATTLEBAUM, GROOMS & TULL PLLC
`
`111 Center Street, Suite 1900
`
`Little Rock, Arkansas 72201
`Jfalasco@qgtlaw.com
`Attorneys for El Dorado Ammonia, LLC
`El Dorado Chemical Company
`
`
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 6 OF 20
`
`

`

`IN THE CIRCUIT COURT OF UNION COUNTY, ARKANSAS
`CIVIL DIVISION
`
`GLOBAL INDUSTRIAL, INC. d/b/a
`GLOBAL TURNAROUND
`
`PLAINTIFF
`
`v.
`
`CASE NO. 70CV—16-76-6
`
`LEIDOS CONSTRUCTORS, LLC et al
`
`DEFENDANTS
`
`and
`
`EL DORADO AMMONIA, LLC
`
`EL DORADO CHEMICAL COMPANY; and
`LSB INDUSTRIES, INC.
`
`V.
`
`CROSS-CLAIMANTS
`COUNTER CROSS—DEFENDANTS
`
`LEIDOS CONSTRUCTORS, LLC;
`LEIDOS ENGINEERING, LLC; and
`LEIDOS, INC.
`
`CROSS-DEFENDANTS
`COUNTER CROSS-CLAIMANTS
`
`Declaration of Michael B. Gwvn inSUQQOi‘l‘ of Reply
`In Support of Motion for Leave toChangePartv Name
`
`1.
`
`My name is Michael B. Gwyn, and I am the tonner President of the Federal,
`
`Healthcare & Energy Group at The Haskell Company (“Haskell”), as well as the former President
`
`of Benham Constructors, LLC (“Benham”). Haskell is the sole Member of Benham Constructors,
`
`LLC. >
`
`2.
`
`I submit this declaration in support of the Benham’s Motion for Leave to Change
`
`Party Name.
`
`I have personal knowledge of the facts contained in this declaration.
`
`3.
`
`On April 16, 2016, Haskell acquired Leidos Constructors, LLC. Haskell did not
`
`acquire Leidos Engineering, LLC or Leidos, Inc.
`
`4.
`
`In connection with its purchase of Leidos Constructors, LLC, Haskell changed the
`
`name of Leidos Constructors, LLC from Leidos Constructors, LLC to Benham Constructors, LLC.
`
`5.
`
`Since April 2016, Benham Constructors, LLC has been known exclusively as
`
`Benham Constructors, LLC.
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX-000000185792 PAGE 7 OF 20
`
`

`

`6.
`
`7.
`
`Leidos Constructors, LLC no longer exists.
`
`Benham Constructors, LLC is not affiliated with Leidos,
`
`Inc. or Leidos
`
`Engineering, LLC.
`
`8.
`
`In May 2016, Benham Constructors, LLC completed the projects which form the
`
`basis of the above-styled litigation.
`
`9.
`
`On April 11, 2017, counsel for El Dorado Ammonia, LLC sent a demand letter
`
`referencing “material breaches by Benham Constructors L.L.C.” Attached as Exhibit 1 is a true
`
`and correct copy of that letter.
`
`1, Michael B. Gwyn, solemnly affirm and declare under penalty of perjury, that the
`
`foregoing declaration is true and correct to the best of my personal knowledge, information, and
`
`belief.
`
`
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 8 OF 20
`
`

`

`Exhibit 1
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 9 OF 20
`
`

`

` EGreenbergTraurig
`
`James R. Leahy
`Tel 713.374.3534
`Fax 713.374.3505
`Ieahyj©gtlaw.com
`
`April 11. 2017
`
`Via cerli zed mail return recei r ret nested re ular mail and e-mail
`
`
`
`
`
`Mr. Michael Smith
`Vice President
`
`SAIC Constructors. L.L.C.
`9400 N. Broadway, Ste. 300
`Oklahoma City. OK 73114
`
`Mr. William J. Cople IlT
`Counsel for Leidos Constructors. L.L.C.
`
`Hollingsworth LLP
`1350 I Street, NW
`Washington, DC 20005
`wco1;1e@Iiolliugsworthllp.com
`
`Mr. Jeffrey W. Miller
`Associate Counsel, SAIC Constructors, L.L.C. and
`Registered Agent, Benlram Constructors, L.L.C.
`9400 N. Broadway, Ste. 300
`Oklahoma City, OK 73114
`Jeff. rrufler'ga2,berrlrarrr. com
`
`Mr. Richard M. Mitchell
`Executive Vice—President, Construction
`Benham Constructors, L.L.C.
`8845 Red Oak Boulevard
`Charlotte. NC 28217
`r‘ichardinitchelltthb enha 111.com
`
`Mr. James R. Moos
`SVP and Deputy Group President, Civil
`Leidos Engineering
`622 Emerson Rd Ste 600
`Saint Louis. Missouri 63141-6728
`
`Mr. Michael B. Gwyn
`President
`Leidos Constructors. L.L.C.
`9400 N. Broadway. Ste. 300
`Oklahoma City. OK 73114
`MICHAEL.B.GYWN@leidos.corn
`
`Leidos, Inc, f/k/a Science Applications
`International Corporation
`c/o The Corporation Trust Company.
`Registered Agent
`Corporation Trust Center
`. 1209 Orange Street
`Wilmington, DE 19801
`
`Re:
`
`Engineering, Procurement, and Construction Agreement between El Dorado
`Ammonia, L.L.C., and SAIC Constructors, L.L.C., and, Guaranty
`
`Dear Sirs:
`
`This firm has been retained to represent. El Dorado Ammonia, L.L.C., (“EDA”) in a legal
`matter regarding the material breaches by Benham Constructors L.L.C., formerly known as
`Leidos
`Constructors,
`L.L.C.,
`formerly
`known
`as
`SAIC
`Constructors,
`L.L.C.
`(“Benham/Leidos/SAIC”) of its Engineering, Procurement, and Construction Agreement
`(“Ammonia EPC Contract”), dated August 12, 2013, and its breaches of other legal duties owed
`to EDA.
`The subject matter of the Ammonia EPC Contract concerned the design and
`reconstruction of the 531—NH3 ammonia plant in El Dorado, Arkansas (“Project”). At all times
`relevant herein, Benham/Leidos/SAIC was the design engineer and general contractor engineer
`responsible for the timely completion of the Project. Contemporaneously with the execution of
`
`GREENBERG TRAURIG, LLP l ATTORNEYS AT LAW l WWW.GTLAW.COM
`1000 Louisiana Street, Suite 1700, Houston. Texas 77002 lTol 713.374.3500 l Fax 713.374.3505
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX-000000185792 PAGE 10 OF 20
`
`

`

`April 11,2017
`PageZ
`
`the Ammonia EPC Contract, a Guaranty agreement was executed by Leidos, Inc, formerly
`known as Science Applications International Corporation (“Guarantor”) in favor of EDA in
`which the Guarantor unconditionally, absolutely, and irrevocably guaranteed to EDA the full and
`timely performance of Benham/Leidos/SAIC of the Ammonia EPC Contract as primary obligor,
`not merely as surety.
`
`Pursuant to Article 13 of the Ammonia EPC Contract, EDA engaged FTI Consulting
`(“FTI”) to audit the costs and management of the work by Benham/Leidos/SAIC. The audit has
`been completed, and its results are disturbing. Although the mismanagement and delays that
`repeatedly occurred during the course of the Project are well known to both parties,
`the
`quantification of the costs that have been incurred by EDA as a result of Benham/Leidos/SAIC’S
`poor engineering and mismanagement of the Project are
`significant and will
`require
`reimbursement by Benham/Leidos/SAIC. A copy of the audit report
`is attached hereto as
`Exhibit A.
`
`The Ammonia EPC Contract provided a fixed price for engineering and general
`conditions (Article 5.1), and the contractor, Benham/Leidos/SAIC, was to invoice variable
`construction costs at actual cost plus a 4.5% fee (Article 5.2). Under the terms and conditions of
`the Ammonia EPC Contract, Benham/Leidos/SAIC was contractually obligated to manage the
`Project in accordance with Article 2 ofthe contract, which required Benham/Leidos/SAIC inter
`alia to:
`
`0
`
`Perform the work as appropriate to complete the Project in accordance with the
`estimated contract price ($233,821,044);
`
`- Maintain a competent full time staff at the Project site;
`0
`Secure, monitor, and coordinate subcontractor activities;
`
`0
`0
`
`0
`
`0
`
`Provide all engineering in a timely manner;
`Provide, update, and maintain the Project schedule;
`
`the work for defects, and confirm that work
`inspect
`Provide quality control,
`complied with plans, specifications, and other requirements ofthe contract; and
`Provide accurate progress reports ofthe Project.
`
`Additionally, Benham/Leidos/SAIC was fully responsible for the adequate, conforming, and
`timely performance of the work by its subcontractors and fully responsible to EDA for all acts
`and omissions of its subcontractors (Article 8.3).
`
`1. Liquidated damages for delay
`
`As an additional consequence of Benham/Leidos/SAIC’S breaches of its contractual
`duties, mechanical completion of the Project was delayed for 273 calendar days. Discrete
`periods ofincremental delay have been identified as follows:
`
`0
`
`90 calendar days of delay to start of piping installation on November 17, 2014,
`was caused by Benham/Leidos/SAIC’S mismanagement of its subcontractor
`procurement process. Benham/Leidos/SAIC waited until July 25, 2014, to issue
`its invitation to bid, and took over a month after receipt of proposals to execute a
`
`GREENBERG TRAURIG,'LLP I: ATTORNEYS AT LAW I www.GTLAw.COM
`1000 Louisiana Street, Suite 1700, Houston, Texas 77002 ITel 713.374.3500 I Fax 713.374.3505
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 11 OF 20
`
`

`

`April 11,2017
`Page 3
`
`subcontract on October 17, 2014, with the selected piping subcontractor, Global
`Industrial, Inc. (“Global”), Critical piping activities, planned to begin on July I,
`2014,I did not actually start until November 17,2014.
`
`105 calendar days of delay to complete the piping installation for the Project was
`due
`to Benham/Leidos/SAIC’S mismanagement
`of
`the
`initial
`piping
`subcontractor, Global. During Global’s time on the Project, Benham/Leidos/SAIC
`did not consistently provide EDA with information concerning percent complete,
`physical progress, or other
`earned value metrics
`that
`tracked GIobaI’s
`productivity, even though Global was being paid on a time and materials basis.
`Notwithstanding such failures to manage Global’s productivity, cost, and
`schedule, Benham/Leidos/SAIC represented to EDA on May 30, 2015, that piping
`installation would be complete by September 26, 2015 — before terminating
`Global approximately one month later on July 1, 2015. After the replacement
`piping subcontractor, Performance Contractors,
`Inc. (“Performance”) assumed
`responsibility for the completion of the piping work for the Project, the revised
`schedule projected that piping installation would not be complete until January
`28, 2016.
`
`78 calendar days of additional delay due to impacts on Performance’s work
`caused by Benham/Leidos/SAIC, specifically:
`
`0
`
`0 Engineering revisions — Piping engineering was far from complete at the
`start of piping installation, and Benham/Leidos/SAIC continued to
`sporadically issue piping isometrics and revisions well into 2016;
`Existing isometric errors;
`0 Global—related backcharges — Rework of defective piping installed by
`Global was belatedly discovered by Benham/Leidos/SAIC and required
`correction;
`
`o
`
`other
`by
`Interference
`Benham/Leidos/SAIC —
`
`subcontractors
`Performance
`
`not
`and
`
`by
`properly managed
`other
`subcontractors
`
`experienced inefficiencies due to acceleration and overcrowding and
`congestion of work areas in the later stages of Project work.
`
`As set
`
`forth above, Benham/Leidos/SAIC was responsible for 273 days of inexcusable
`delay in completing the Project. Amendment No.
`1
`to the Ammonia EPC Contract granted
`Benham/Leidos/SAIC an additional 131 calendar days to achieve mechanical completion of the
`Project, but included an important reservation of rights:
`
`Nothing in this Amendment shall act as a release, settlement, waiver, or otherwise
`limit or reduce the Parties’
`rights, obligations, or responsibilities under the
`Contracts including in relation to the Work performed to date, delays, and the
`Parties’
`responsibility for
`same.
`In all other
`respects,
`the terms of the
`Amendment or Contracts shall remain in full force and effect and unchanged.
`
`1 Delay of 49
`calendar days caused by delay in issuance of air permit has not been not charged to
`Benham/Leidos/SAIC.
`
`GREENBERG TRAURIG,
`1000 Louisiana Street,
`
`LLP I ATTORNEYS AT LAW I WWW,GTLAW.COM
`Suite 1700, Houston, Texas 77002 ITet 713.374.3500 I Fax 713.374.3505
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 12 OF 20
`
`

`

`April 11, 2017
`Page4
`
`Accordingly, EDA is entitled to recover for delays that occurred prior to the execution of the
`Amendment No. 1 on October 20, 2015, which amount to 142 calendar days (273 calendar days
`minus 131 days).
`
`Article 4.3 of the Ammonia EPC Contract provides for liquidated damages of $5,000 per
`day for each full day of delay if mechanical completion was not achieved by the agreed
`completion date due to Benham/Leidos/SAIC’S failure to prosecute the work with diligence
`and/or its negligence or the negligence of its subcontractors. Liquidated damages in the amount
`of $710,000 would be owed to EDA for 142 calendar days of delay, but for the limit set by
`Article 4.3, which reduces the liquidated damages owed by Benham/Leidos/SAIC to $500,000.
`
`2. Other costs proximately caused by Benliam/Leidos/SAIC’S breach of contractual
`duties, negligence, gross negligence, and/or fraud
`
`in some cases,
`As a result of Benham/Leidos/SAIC’S negligence, gross negligence, and,
`actionable fraud, EDA sustained additional costs and damages in the amounts set forth below:
`
`(1. Costs incurred in overpayment to Global due to Ben/mm/Leidos/SAIC’S
`mismanagement of engineering, material, and subcontractor
`
`As set forth above, not only did Benham/Leidos/SAIC have a contractual obligation
`under Article 2 of the Ammonia EPC Contract
`to supervise, manage, and inspect work
`performed by subcontractor Global
`for compliance with plans and specifications, but
`Benham/Leidos/SAIC agreed to assume full responsibility for the negligent acts and omissions
`of Global under Article 8. Global’s defective work and negligence caused EDA to incur
`excessive costs currently calculated in the amount of $3,886,290, which represents Global’s
`overbilling of overtime in the amount of$l,774,763 (including Benham/Leidos/SAIC’S 4.5% fee
`to be reimbursed) and Global’s inefficiencies associated with its overtime hours in the amount of
`82,1 1 1,527 (including Benham/Leidos/SAIC’S 4.5% fee to be reimbursed).
`
`Due to the initial delays in the piping installation work, on March 3, 2015, Global was
`allowed to amend its work schedule to six days per week and 12 hours per day. EDA agreed to
`this change on the basis of representations made by Benham/Leidos/SAIC’S project manager that
`Global’s
`revised work schedule was
`not
`expected
`to
`have
`any
`cost
`implications.
`Benham/Leidos/SAIC was required to manage Global to ensure that Global did not abuse the
`new work schedule by charging excessive overtime hours with little or no productivity resulting
`from the extra hours.
`Instead, Benham/Leidos/SAIC allowed Global to use the revised work
`schedule as a blank check to be written on EDA’s account.
`
`EDA reasonably expected the revised work schedule would allow critical piping
`activities to accelerate and advance the Project schedule; instead, after Global’s overtime charges
`were approved in March 2015, the mechanical completion date continued to slip even further
`behind schedule. Benham/Leidos/SAIC’S monthly report for April 2015 showed that
`the
`mechanical completion date had slipped from July 28, 2015, to August 25, 2015, and the piping
`completion had slipped from June 29, 2015,
`to August 27, 2015 (a delay of two additional
`months). Global’s poor performance and inefficiencies were attributable — and allowed to
`
`GREENBERG TRAURIG, LLP I ATTORNEYS AT LAW I www.cTLAWLOM
`1000 Louisiana Street, Suite 1700, Houston, Texas 77002 ITel 713.3743500 I Fax 713.374.3505
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO‘185792 PAGE 13 OF 20
`
`

`

`April 11,2017
`Page 5
`
`for months — due
`continue
`Benham/Leidos/SAIC.
`
`to
`
`negligent management
`
`and
`
`lack of oversight
`
`by
`
`Global billed for 72,062 overtime hours between March 1, 2015, and its termination date
`of July 2, 2015. Global’s subcontract with Leidos defined overtime as all hours in excess of 40
`hours Monday through Friday, as well as all hours on Saturdays, Sundays, and company
`observed holidays.
`The inefficiency of Global’s overtime work became evident with the
`schedule slippages set forth above, but FTI used a 201]
`industry study, Change Orders,
`Productivity, Overtime: A Primer for the Construction Industry,
`issued by the Mechanical
`Contractors Association of America (“MCAA”) to determine the loss of productivity due to
`Global’s excessive overtime hours.
`‘
`
`MCAA methodology measures the decrease in productivity of an employee with each
`consecutive week of scheduled overtime. Applying the MCAA methodology, Global worked
`5,567 inefficient manhours between March 1, 2015, and April 22, 2015, and another 20,472
`inefficient hours between April 22, 2015, and July 2, 2015, due to the excessive and ineffective
`overtime scheduled by Benham/Leidos/SAIC. The inefficient hours were multiplied by the
`applicable blended rate of straight time rate and overtime being charged at the time, which shows
`resulting costs incurred in the amount of $2,020,600. When Benham/Leidos/SAIC’S 4.5% fee
`($90,927) is added to Global’s excessive overtime costs,
`the cost of Benham/Leidos/SAIC
`allowing excessive and inefficient overtime to be invoiced by Global amounts to $2,111,527.
`
`b.
`
`Additional costs due to negligent materials management and supervision
`
`Benham/Leidos/SAIC is also responsible for other costs attributable to its negligent
`materials management and supervision.
`The parties’ agreed Project schedule (Exhibit E to
`Ammonia EPC Contract)
`required Benham/Leidos/SAIC to complete design work and
`engineering prior to the start of piping installation. Not only was the engineering incomplete
`when Benham/Leidos/SAIC directed Global to start piping installation in November 2014, but
`only a small percentage of the piping isometric drawings were completed.
`in fact, 90% of the
`piping isometrics had still not been issued by February 2015.
`
`Benham/Leidos/SAIC was also responsible for the management of materials needed for
`the Project. Article 2.1.6 of the Ammonia EPC Project provided that Benham/Leidos/SAIC was
`required to perform all necessary preparation for laydown areas, storage areas, or areas needed
`for access of materials and equipment. While Global performed work on the Project, materials
`were spread across six different laydown yards, which made it difficult and time consuming to
`identify required materials and deliver proper materials for installation.2 Benham/Leidos/SAIC
`was either directly responsible or inexcusably negligent in tolerating such obvious inefficiencies
`in material handling at the Project site.
`
`These failures on the part of Benham/Leidos/SAIC directly impacted the productivity of
`its subcontractor, Global. To calculate these specific inefficiencies, EDA again utilized the 2011
`MCAA industry study, which provides a method of quantifying inefficient hours using factors
`based on industry research. According to the MCAA methodology, mismanagement of materials
`
`2 One ofthe first actions taken by the replacement piping subcontractor, Performance, was to move all materials to a
`single laydown yard to increase efficiency.
`
`GREENBERG TRAURIG, LLP I ATTORNEYS AT LAW I WWW.GTLAW.COM
`1000 Louisiana Street, Suite 1700, Houston, Texas 77002 ITel 713.374.3500 l Fax 713.374.3505
`
`UNION COUNTY CIRCUIT CLERK DOCUMENT# CTX—OOOOOO185792 PAGE 14 OF 20
`
`

`

`April 11,2017
`Page 6
`
`(as occurred at the Project site) is considered a logistics factor, which has been determined to
`have a relatively minor impact (although quite significant in the context of this Project) of 10%.
`Similarly, according to MCAA methodology, negligent supervision has also been determined to
`have a relatively minor (but significant) impact of 10%.
`
`After adjustment for overtime inefficiencies (see above), Global’s remaining man hours
`amounted to 232,321 man hours. When the MCAA methodology is applied to include both
`mismanagement of materials
`and negligent
`supervision of a
`subcontractor
`(20%),
`a
`determination can be made that at least 38,720 man hours billed by GlObal were wasted time.
`Applying Global’s average hourly rate to the hours of productive work lost due to
`Benham/Leidos/SAIC’S mismanagement and negligence, the costs incurred by EDA amount to
`$2,885,717. When Benham/LeidOS/SAIC’S 4.5% fee ($129,857) is added to this amount, the
`excessive costs due to negligent management of materials and negligent supervision amount to
`$3,015,574.
`
`c.
`
`Costs to It ire another engineering firm to perform scheduling work
`
`EDA also incurred additional costs when forced to transfer the scheduling responsibilities
`for the Project from Benham/Leidos/SAIC to another engineering firm, Hatch, Ltd. (“Hatch”).
`The Ammonia EPC Contract required Benham/Leidos/SAIC to provide sufficient management
`of the wOrk to achieve Project completion in accordance with the estimated contract price and
`the
`agreed Project
`schedule.
`By May 2015, when
`it had become obvious
`that
`Benham/Leidos/SAIC had failed to manage and adequately supervise its subcontractor, Global,
`and had repeatedly caused the Project schedule to slip, EDA had no alternative but to transfer the
`scheduling responsibility for the Project to Hatch pursuant to Article 16 of the Ammonia EPC
`Contract.
`'
`
`to retain the services of a replacement engineering firm to take over
`EDA’S cost
`scheduling responsibilities for the Project amounted to $1,868,431. These were duplicative costs
`incurred by EDA, as such services were part of Benham/Leidos/SAIC’S scope ofwork under the
`Ammonia EPC Contract. Accordingly, EDA is entitled to recover such additional costs from
`Benham/Leidos/SAIC.
`
`(I.
`
`Transition costs fol/0 wing Global ’5 termination
`
`The effective date of Global’s termination was July 2, 2015, which left the Project site
`without a piping subcontractor for approximately one month. During that period oftime, EDA
`incurred additional costs and sustained further delay to the Project as transitional tasks had to be
`performed before a replacement subcontractor was hired to complete the piping work (and to
`remedy defective piping work performed by Global). These transitional tasks included inter alia
`identification the scope of work remaining to be completed, developing a more effective
`management of the materials on site, determining staffing needed to complete the work, and to
`calculate costs to complete the work.
`
`2015,
`
`The transition costs incurred during the period from July 12, 2015, through August 2,
`amounted to $2,229,842.3
`Such
`costs would
`not
`have
`been
`incurred
`had
`
`3 A portion of such costs invoiced by Performance appear to include work invoiced to the OSBL pro