While building the $1 billion PortMiami tunnel underneath the cruise ship channel to the port, Bouygues Civil Works Florida Inc. (BCWF) encountered a significant issue due to unexpected geologic conditions and its request for relief due to the differing site condition was denied by the Florida Department of Transportation (FDOT). The resulting dispute easily could have caused significant delays–perhaps even bringing the massive tunnel-boring machine nicknamed Harriet to a halt–without an agreement to resolve disputes by a Technical Dispute Review Board (TDRB).
The TDRB for this project was composed of three tunnelers with more than 100 years of combined experience. Under the terms of the contract, the TDRB’s decisions were to be considered provisionally binding, not final, and both sides would have the right of outside review, with the caveat that the board’s ruling would be admissible as evidence in any such appeal. The board meets quarterly to keep apprised of the project and any brewing disputes. When the differing site condition dispute arose, the TDRB convened a 12-day evidentiary hearing on entitlement only. At the hearings, the parties presented the dispute for resolution through the testimony of lay and expert witnesses. Lawyers advised and prepared the witnesses, but they did not conduct questioning or present argument at the hearing.
The TDRB found largely in favor of Miami Access Tunnel/BCWF. Thereafter, FDOT and MAT negotiated a $58.5 million settlement related to modifying the tunnel boring machine and the extra work of grouting the limestone. The funds were allocated from a contractual contingency fund, so the actual contract amount did not change.
This settlement during construction allowed the new tunnel to continue on schedule. Using the TDRB expedited the resolution and minimized the acrimony that exists in more conventional dispute resolution and should be considered for all major construction projects. Commercial, residential, sports venue, and industrial developers and their contractors can benefit from this alternate dispute resolution technique, which can be tailored to address the specific nuances of a particular project.
Dispute review boards are favored in the construction industry for the same reasons arbitration has been preferred to litigation. Knowledgeable expert panels rather than a lay jury or judge without specific knowledge provides confidence that resolution of a dispute will be educated, sensible and fair. DRBs are constituted before a dispute and can actually intercede to prevent circumstances from ripening into disputes.
DRBs are preferable to litigation for practical reasons, too. Backlogs of foreclosure actions clog the courts. Budget cuts hamper court clerks across the country, impacting the flow of paper that is necessary for a court to consider the dispute. Results have become more unpredictable, slower and more expensive.
Similarly, the process with arbitration has become more expensive, as the administrative costs and arbitrator fees increased over the years. The accepted procedures now allow for a more expansive discovery phase, bearing an unmistakable resemblance to litigation and its added costs.
As a result, DRBs have become commonly used in large government or public-private infrastructure projects. The DRBs are typically composed of industry professionals whose specialized knowledge is invaluable in resolving disputes. Care must be given to crafting, funding and selecting a dispute resolution board or panel. Since the DRB is a creature of contract, the parties should consider including a lawyer to add process management skills to the panel. Properly composed and properly informed, a DRB can provide the best of all worlds in dispute resolution.
Without exception, every form of dispute resolution has shortcomings that can lead to uncertainty, expense and frustration. As the benefits of arbitration over litigation have become murkier, construction concerns and their experienced legal counsel are turning to DRBs as a preferred method for dispute resolution. Considering all of the possibilities for disputes that are presented by large construction projects in which dozens of disciplines are coalesced, disputes around issues of scope, time, extra or changed work, and cost and time are almost certain to arise. They can be anticipated with mechanisms such as DRBs that address them proactively under the terms of the contractual arrangements.
Dispute avoidance using DRBs has proven to be preferable to dispute resolution in most every respect, and their use in major construction projects will undoubtedly continue to grow in the years to come.