Consider the hazardous soil condition in the example project about claims in an earlier module in this
Question:
Consider the hazardous soil condition in the example project about claims in an earlier module in this course. With all of the assumptions provided below, estimate the time and cost of the following resolution methods for a contractor:
● Negotiation
● Mediation
● Arbitration
● Dispute Board
● Court
Present your conclusions in table format.
Assumptions:
● Negotiation will take one month and a total of 200 hours at $100/hour with no attorney time.
● None of the approaches involve any travel and travel related expenses
● Dispute review board process will require 100 hours of company personnel time at $100/hour with no attorneys over a 20 day period.
● Mediation will require 40 hours of attorneys at $300/hour plus 40 hours of company personnel time at $100/hour, and a $5000 fee for the mediator.
● Arbitration will take 200 attorney hours, 400 company personnel hours plus a $15,000 for a single arbitrator and costs for arbitrator hearing rooms. Arbitration will not require any depositions of witnesses. This process will only take one week for a trial but the entire process will take nine months. All of the costs are contained in the hours mentioned here with the addition of the use of expert witnesses, 4 experts at $10,000 each.
● Court will involve 6 experts at a total cost of $20,000 each. The Court fee will be $30,000. There will be 32 fact witnesses who will need to be deposed. Each deposition will take 8 hours of deposition time and 8 hours of preparation time per witness at a cost of $100/hour for company personnel, $300/hour for an attorney for those same hours plus $3000 for each deposition for a court reporter. The trial will take 20 court days, 10 hours per day for attorneys at $300/hour. The trial will use $100,000 of company personnel time. The process will also cost $10,000 for beer to reduce stress. The process from start to finish will take three years.
Assuming the contractor is owed $10,000,000 and wins each of these processes. Include in your answer, the interest cost of that $10,000,000 over the period of the process assuming a 10% simple interest rate and the amount is paid at the conclusion of the process, which seldom really happens.
