Case Study 10-1 — Corridor C: Nine Inches, Four Options, and Who Pays

All people, companies, and projects in this case are Tier-3 illustrative composites.

Setup

Project: Northgate Outpatient Pavilion — 132,000 GSF, four stories, outpatient clinics, imaging suite, and ambulatory surgery for Meridian Health System. CM at Risk with a $47,500,000 Guaranteed Maximum Price, 565 calendar days, substantial completion September 18, Year 2. Liquidated damages $5,500 per calendar day; extended general conditions $5,150 per calendar day; total daily exposure $10,650/CD.

The people in the room.

The constraint. Level 2, Corridor C, grid lines 4 through 9. Floor-to-floor 13'-6". Total structural depth 24 inches. Required finished ceiling 9'-0". Clear corridor width 8'-0". Level-two coordination sign-off is scheduled for January 12, Year 2, and the sheet-metal shop will not release fabrication against an unsigned model.

What Happens

Thursday, week 1: the model turns red

Grace federates the six trade models — mechanical duct, mechanical pipe, plumbing and medical gas, fire protection, electrical, and low voltage — over the structural and architectural files. After filtering, Corridor C and its two adjacent bays return 1,840 hard clashes:

Grace runs the section cut and the room goes quiet. Bottom of steel at grid 6 — where a deeper transfer girder carries load around the imaging suite below — reads 9'-6" above the level-two finished floor. Required finished ceiling: 9'-0".

Sofia Marchetti: "There isn't room. Somebody has to give something up, and it costs money either way."

The arithmetic, done in the room

Dani Okonkwo runs the general corridor condition on the whiteboard while Grace holds the section on screen.

Available cavity:

162" (floor to floor) − 24" (structure) − 108" (required ceiling) = 30 inches.

Required stack at the crossing:

Shortfall: 9 inches.

Then Devlin makes it worse, correctly. "Run the plan."

Supply duct with insulation is 46 inches wide. Return is 36. Three inches of separation for installation. 46 + 3 + 36 = 85 inches of a 96-inch corridor. Eleven inches left — which will not accept a 24-inch cable tray, a 20-inch conduit rack, a 12-inch medical-gas rack, or the domestic water. Four systems have nowhere to go, and they are not even in the vertical stack that is already 9 inches over.

Four options, priced

Ray sends Dani and Grace away with an assignment: price every option, including the ones we will reject, and price each one twice — once in dollars and once in days at $10,650.

Option 4 in detail:

• Sprinkler main leaves the corridor and runs in the adjacent exam rooms at a higher elevation, feeding corridor heads through the wall with armover drops.
• Cable tray, conduit rack, and medical-gas rack move to the service corridor, which has a 34-inch cavity and no return duct.
• Corridor light fixtures shift 18 inches off centerline so they sit under the 12-inch return rather than under the 20-inch supply trunk.

Resulting stack under the supply trunk: 2 + 21 + 1 + 1 = 25 inches against 30 available — five inches of slack. Under the return, where the fixtures now live: 2 + 13 + 7 + 1 = 23 inches. Clear.

Cost build-up:

The argument about who pays

This is the part that takes longer than the engineering.

Tavares Hill (Sentinel): "You are asking me to redesign a permitted sprinkler system and eat the recalculation. My bid was based on the fire protection drawings. The drawings show that main in the corridor."

Ray: "Your subcontract has a coordination clause. It says you participate in BIM coordination on our schedule and you route to the coordinated model. It also carries the delegated design for sprinkler layout with a stamp — which means the layout in the bid documents was always going to be yours, not Trellis's."

Tavares: "It carries delegated design for layout. It does not say I pay for a permit revision caused by a duct that shouldn't be that big."

Sofia, dryly: "The duct is that big because the imaging suite needs that air. Take it up with the magnet."

Where it lands. Ray applies the routing priority convention as the tiebreaker, in writing, that afternoon:

Under the coordination protocol in each subcontract, systems yield in order of increasing degrees of freedom. Gravity drainage and the large supply trunk have the fewest options; the sprinkler main has more than the trunk and fewer than the tray; conduit and tray have the most. On that basis: conduit, tray, and med-gas relocate at each trade's own cost as ordinary coordination. The sprinkler main relocates, and because its relocation triggers a permit consequence rather than just a labor consequence, Kestrel shares that cost. The lighting relayout is a design revision; H+P issues it at no cost as part of coordination support.

This is draw #11 against Northgate's $1,320,000 construction contingency. It takes the balance from $903,400 to $885,700, and it is logged with a named risk, a date, and a decision record — because contingency without a named risk is either fat or a lie.

The change order that never happened

Pri Sethi asks the question owners always ask, which is the right question: "Is this a change order?"

It is not, and the reason is worth being precise about. Meridian did not change anything. The design did not change in any way that alters function, quality, or quantity: the ceiling is still 9'-0", the airflow is unchanged, the sprinkler coverage is unchanged, the light levels are unchanged. What changed is where things physically are in three dimensions — a matter the contract documents never resolved, and which the coordination process exists to resolve.

There is no owner change order. There is no time extension. There is a contingency draw of $17,700 and a signed revision to the level-two coordinated model.

The follow-through that made it stick

Tavares files the sprinkler permit revision with the fire marshal the same day the decision is made, not after the model is updated. The revision comes back in twelve working days. Level-two coordination sign-off happens on January 12, Year 2, on schedule. Sheet-metal fabrication releases on January 15.

Analysis

What worked, and why.

The conflict was found in a model in November, not in a corridor in May. At the illustrative order-of-magnitude framing — roughly 1× in the model, 20× in the field, 100× after the ceiling closes — the same conflict discovered during rough-in would have meant cutting and re-hanging duct, re-hanging a permitted sprinkler main, an RFI, a stop-work in that corridor, and a failed above-ceiling inspection. Discovered after ceiling close-in, it would have meant demolition of finished work beside an operating clinic.

Both checks were run. Option 3 — reshape the duct — is the answer most engineering-minded managers reach for, and it is wrong here. The vertical check kills it by 4 inches and the plan-width check kills it by 7. The width check takes ninety seconds and almost nobody runs it.

The cheapest line item was not the cheapest decision. Option 2 at $41,200 is $4,900 less than Option 4. It also does not solve the problem, and it quietly hands Meridian a corridor eight inches shorter than their design standard with two inches of ceiling above every door head. A contractor who banks that $4,900 has bought an argument at substantial completion worth many multiples of it, plus a reputation cost with a repeat healthcare client that does not appear on any cost report.

The tiebreaker was written down. Ray did not win the who-pays argument by being the general contractor. He won it by applying a stated convention — degrees of freedom — consistently, in writing, the same day. That is the difference between a decision and an opinion, and it is why nobody re-litigated it in March.

What could still have gone wrong.

The permit revision. Twelve working days was a good outcome and not a guaranteed one. If the fire marshal's queue had been four weeks instead of two, the January 12 sign-off would have slipped, and every table in Chapter 10 §10.8 says what happens next: fabrication release slips, rough-in slips, the above-ceiling inspection slips, and substantial completion slips 21 calendar days at $10,650/CD = $223,650. The right lesson is not "it worked out." It is: file the permit revision on the day of the decision, and treat every AHJ turnaround as an activity with a duration and a predecessor, not as an errand.

Discussion Questions

1. Ray used degrees of freedom as the tiebreaker for who pays. Sentinel's counter-argument — that its bid was based on the fire protection drawings — is not frivolous. Draft the two sentences you would add to a future subcontract to remove the ambiguity, and explain what each sentence would cost you in bid price.
2. Option 2 was the cheapest in direct dollars and was rejected. Construct the strongest possible argument for Option 2, then say precisely why it fails. What would have to be true about the building for Option 2 to be correct?
3. Option 1 — raise the structure — was unavailable because steel had already topped out on November 12, Year 1. At what point in the project's life was Option 1 still live, and what would Kestrel have had to do in preconstruction to know about this conflict while it still was?
4. Pri Sethi asked whether this was a change order and the answer was no. Change one fact about the scenario so the answer becomes yes, and explain the principle that separates the two cases.
5. The contingency draw was $17,700 out of $1,320,000. If Northgate has 40 coordination conflicts of this magnitude, the contingency is gone. What does that tell you about how the coordination budget and the construction contingency should relate to each other, and what would you have priced differently at GMP?

Your Turn

You are Dani Okonkwo. It is the Monday after the decision. Ray asks you for a one-page decision record that will live in the project file and be readable by somebody who was not in the room — possibly a lawyer, two years from now.

Write it. Include: the conflict stated in one sentence with the governing dimensions; the four options with direct cost and schedule cost; the selection and the reason in no more than three sentences; the cost allocation by party with the contractual basis for each allocation; the contingency draw with the balance before and after; the permit action and its date; and the sign-off date it protects.

Then answer this in a closing line: what is the single fact in this record that you would most regret not writing down?