Performance and Payment Bond Defaulted, Bankrupt, Multi-State General Contractor
Cypress Consulting LLC was initially retained to provide the surety with an opinion on a request of the contractor for working capital advances from the surety to complete the bonded work program. All work performed by this contractor was bonded. The projects were in six different states and contracted with local airport authorities. The general contractor had direct control over the prime supplier and raw material source for all exterior and interior doors required for all projects. Review of management structure, project status and financial exposure indicated that advancing working capital by the surety was not an appropriate action.
After the contractor ceased operations at the direction of the court appointed receiver, Cypress was again engaged by the surety and receiver to provide a forensic accounting report on the financial operations of the company. Additionally, Cypress searched and identified available personal and corporate assets plus researched available insurance coverage’s, which might generate financial relief for the surety or receivership. Cypress will be providing expert witness testimony if either the surety or receivership file recovery action against the principal of the general contractor.
Self Performing Labor Intensive General Contractor
Cypress was retained by the general contractor to develop a business plan to manage their unprecedented growth. The contractor expanded from primarily interior carpentry work to broad based carpentry general contracting work. Additionally, the contractor expanded the inclusion of subcontract trades in this scope of work. This contractor negotiates nearly 90% of all work with selected private clients. The business plan developed included marketing, operations, office management and financial segments. Ongoing assignments have included the implementation of sections of the business plan and the development of a strategic plan. Cypress facilitated a series of strategic planning off-site meetings with key personnel of the contractor and his outside service providers
Three United States Post Office Claims
Cypress Consulting LLC was originally retained by the contractor to prepare a claim for damages and additional change orders on three UPS projects. Also included in the original assignment was the preparation of defenses against the UPS early termination of the general contractor. Working with Watt, Tieder, Hoffar & Fitzgerald LLP, we developed a workout program with UPS, eliminated the early termination penalties and settled subcontractor/supplier claims against the general contractor. This assignment involved three separate UPS contracts, two surety companies, nine litigated or arbitrated subcontractor/supplier claims and one general contractor.
Marine Contractor Surety Bond Default, NYC Waterfront
This assignment involves a New York City marine contractor who was not technically in default of his contracts with the project owners but had filed for Chapter 11 bankruptcy protection. The surety requested an analysis of the three major bonded projects the contractor included in his work in process. These projects were between 50% and 80% completed at the time of the assignment. Cost to complete analysis of each project was developed along with completion alternatives including re-letting one project, supporting the existing contractor on the two more advanced projects. The approximate contract value for all three projects was $7,000,000.
Golf Course Contractor Default
Cypress Consulting LLC provided cost to complete analysis and value of work in place estimates for Baer, Marks & Upham on a New York state golf course under construction by a major national golf course contractor. The golf course contractor defaulted on thirty plus contracts worldwide. Because the New York owner acted quickly, we were able to detail and substantiate our claims very early in the process, creating a satisfactory payment and performance settlement. The course opened one year late and the final cost of the entire golf course development exceeded $18,000,000.
Subcontractor Payment Dispute
The assignment involves working with Wolff & Samson for a surety on behalf of a trade contractor against whom a material supplier filed a Miller Act claim on a Department of Interior project. The trade contractor’s defense was that he did not have sufficient credit to open an account with this supplier therefore the general contractor opened the account and guaranteed payment. The general contractor issued multiple purchase orders to the trade contractors in an attempt to obtain bonding for this project. Even through the trade contractor was an electrician, he signed and bonded a $1,000,000 site contract with one surety and a $1,400,000 building contract with another surety. Both sureties are managing default claims on the bonds.
Connecticut based Hotel & Resort Complex
PinnacleOne/Cypress Consulting LLC was retained by the Hotel and Resort Complex, which is in the final stages of completing the fast-track construction of its main focus tower, a luxury hotel/casino at the resort. The owners have engaged PinnacleOne to perform an audit of the construction process, the project quality and financial issues. Additionally, a program audit of the Owner Controlled Insurance Program (Cypress Consulting LLC assignment) was required within the assignment.Major Connecticut University
The University recently completed the third year of a 10-year, $1 billion program, which provides for infrastructure repairs, equipment, building renovations, and new construction. At the direction of the Board of Trustees, the University recently retained PinnacleOne to conduct a comprehensive program review of the administrative procedures for compliance with prevailing statutes and Board-approved policies, including Architect and Engineering firm selection, contractor pre-qualification, competitive bid solicitation, proposal evaluation and contract award, project management and administration, financial disbursements, and the Owner Controlled Insurance Program (Cypress Consulting LLC assignment). PinnacleOne is also responsible for conducting a comprehensive financial audit of construction expenditures made pursuant to the University’s statutory authority to assess whether the University’s procedures are consistent with the intent of the enabling legislation and whether the expenditures are being made in a fiscally responsible manner, so as to protect the interests of the State of Connecticut and the taxpayers.
Surety/Re-let Contractor Claim
Cypress Consulting LLC was retained for a surety client through Wolff & Samson, to review a contract closeout claim. The New Jersey DOT re-let contractor was making a claim against the surety that their contract to complete the NJDOT project was only for the actual work known to be completed, not the scope of work uncompleted at the time of default by the original contractor. Primary focus is on the issue of an item in the original contract for interconnect conduit installation, which was never fully completed, however replacement methods of interconnect conduit installation were added to the contract as change orders. NJDOT issued a final change order to closeout all contract quantities to actual in-place quantities creating a $519,000 contract deduct. The re-let contractor is not accepting any of the deducts based on their claim of only having to provide the actual work to be completed.
Major Hartford Area School Development
Cypress Consulting LLC was given the assignment to provide financial oversight on a $100,000,000, three school building project in the Hartford area. This assignment involved the review and initiation of funding requirements by source, requisitions and payment processes, OCIP insurance purchase and oversight. Cypress manages the procedures and coordinates financial transactions between the State of Connecticut, the City and the five private partners involved this overall development.
Sports, Retail and Convention Center Development
PinnacleOne/Cypress Consulting LLC was retained by the project owner to provide financial management, planning, project management consulting and oversight management for the site preparation and component development of a $1,300,000,000 project in Hartford. The financial management aspect of this assignment included establishing requisition and payment procedures for the consultants and contractors in addition to methods of sources of funds coordination with city and state agencies. Also included is the oversight of the financial models for the components of the project including cost estimates, income streams, return on capital calculations and cost escalation management.