This document summarizes an engagement to analyze a subcontract dispute between Gundlach Sheet Metal Works and Brush Wellman Inc. over a ductwork project. It finds that Brush Wellman unreasonably rejected Gundlach's materials, methods, and submittals, breaching the agreement and preventing Gundlach from performing the contract. As a result, Gundlach incurred significant additional costs and delays. The analysis concludes Gundlach's claim for over $1 million in damages is justified and sustainable.

1. Engagement Example 2. –
Client : Gundlach Sheet Metal Works, Sandusky, OH
Client’s Customer:Brush Wellman Inc., Elmore, OH
Client’s Contract :Subcontractfor Pebble Plant Process Ductwork System
ISSUES
Theoryof
Entitlement
Impossibilityof
Performance
InterferenceWith
Contractor'sMeansand
Methods
Negligence
ConstructiveChange
CommercialSenselessness
EconomicWaste
TypeIIDifferingSite
Condition
MaterialBreachofContract
ExtendedPerformance*
ConstructiveSuspension
1
Out-of-hand disapproval of GSMW's FRP joint alignment method
(temporary banding)
x x x
2 Nullification of the contract's resin specification x x x x
3 Directive to apply sealant to inside of FRP duct joints x x x x
4 Failure to respond to GSMW’S Submittal #s…… (numerous) X x x
5
Breach of agreement with owner for Gundlach to install its work
before the work of other subs
x x x x
*
Will be dependent on whether or not the delays and partial
suspensions fell on the critical path of the as-built schedule.
Taken altogether, the overarching issue wasthe cumulative impact of numerous material breaches of Gundlach’s contract by Brush and how
to measure its resulting money damages. To complicate matters, Brush w as claiming $659,000 in breach of contract damages (numerous
alleged failures of performance) against Gundlach.
The entire purpose of the Pebble Plan w as to produce materialfor the Federal Government under its Title III Beryllium Production Program.
The plant w as a very large, upw ardsof 80,000 sf, steelframed structure. Gundlach’s subcontract entailed installing all fiberglass and stainless
steel ductwork. The agreement included permitting Gundlach “first installation” of its w orkin every upper and low er bay – before any
installation of any w orkby other subs.
Precisely the opposite happened due to delays as indicated above, caused by the designer-construction manager’s unreasonable rejections of
Gundlach’s reasonable means, methods and materials submittals. As a result, to performthe contract, Gundlach had to interw eaveits
ductw orkaround and thru a virtualmaze of piping, ducting, electrical conduit, etc., resulting in Gundlach’s actual production – w hen there was
not an outright ow ner suspension in play – of perhaps 30% of as-bid production.
My engagement w as essentially Gundlach’s desire for an unbiased professionalopinion as to w hether its damages claim positions w ere
sustainable. I met w ith the principals in their offices in mid-November, and conducted document and specification review and analysis
throughout the remainder of November, 2010 and into December as w ell. I concluded that the ow ner’s agent’s rejections were unreasonable;
over the top and beyond the pale – and that Gundlach’s positions w ere entirely sustainable.
It should be noted here that Gundlach is a fifth (5th
) generation family business, conducting its sheet metal business continuously since 1889.
Its estimate of damages of approximately $1,000,000 (the original contract price was $860,000) was meticulous; it w as thorough and its
methodology w as easily understood.
The rejections of Gundlach’s materials and methods w ere clearly erroneousand defective.