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Cleveland Bridge hit with £800,000 bill for Shard delay

Cleveland Bridge has been ordered to pay out for delays and defects as the legal bust-up between the firms working on the Shard skyscraper’s steelwork reached its climax, CN can reveal.

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The steel specialist has been ordered to pay rival Severfield Rowen Structures £824,478 for damages due to delay and defects on the capital’s flagship skyscraper project, after an overload of work led to delays of 42 days.

The 1,016 ft Shard, currently the tallest building in Europe, was completed in 2012 under a £426m contract with Mace as main contractor.

Severfield Rowen Structures was employed for the steel contract, and subcontracted in Cleveland Bridge UK as the fabricator and supplier of steelwork for the first nine levels of the Shard.

The judgement, handed down to the Technology and Construction Court on 21 December by Mr Justice Akenhead and seen by CN, found that Cleveland Bridge “had taken on more work than it had the capacity to deal with”, and had subcontracted out its workload too late.

Cleveland Bridge was found to have been responsible for delays of 38 days on the “critical phase”, which needed to be completed on time to prevent an overall delay.

Mr Justice Akenhead accepted the view of a Severfield witness that there was “a very high level of poor workmanship in the steel delivered by Cleveland Bridge UK”.

There was an additional four-day delay from the planned closure over Easter of Severfield Rowen’s paint shop, along with 14 extra days of delays not attributable to Cleveland Bridge.

Both Cleveland Bridge and Severfield Rowen, noted the judge, were engaged in several major projects at the time. Severfield was engaged on the Olympic Stadium and the Heron Tower, while Cleveland Bridge was working on a major motorway project in Glasgow and on the A46.

The judge said that although Cleveland Bridge shouldn’t be criticised for having “a very healthy order book”, it had breached its contract with Severfield by failing to deliver according to the main contract programme.

Cleveland Bridge was also awarded £928,472 plus VAT from Severfield, in fees due under the subcontract.

Problems began to emerge on the project in January 2010, according to the judgement, when an internal Cleveland Bridge email mentioned an “extraordinary” work overload, expressing particular concern over the Shard.

Several factors were cited, including weather and internal resource constraints. After Severfield declined Cleveland Bridge’s suggestion to delay the fabricated steel delivery, Severfield extended its working hours and began working nights to make up the delay.

Subcontractors MCS and K-Len were also brought in as part of the acceleration effort.

However, the acceleration works failed to make up the delay, and Mace complained to Severfield that the main works were being delayed by late installation of the steelwork.

The row escalated in May 2010, with Severfield declining to make further payments to Cleveland Bridge. Cleveland Bridge called this “unreasonable”, criticising the lack of detail in Severfield’s quality complaints and their “confrontational approach”.

Cleveland Bridge also complained to Mace directly.

The subcontractor then took the dispute to the TCC, claiming £1.2 million plus VAT was due to them, of which Severfield admitted £825,000 at the outset subject to set-off. Cleveland Bridge also claimed £908,000 for loss and damages.

Severfield responded by stating that they had been working to a different timetable. They claimed there were quality defects in Cleveland Bridge’s steel, that they had caused delays, and that roughly £2.5m was due to Severfield in damages.

Severfield was at risk of a bill as high as £3m from Mace for a six-week delay, plus six weeks’ worth of site costs.

Mr Justice Akenhead awarded Severfield £522,659.05 in acceleration costs, as well as around £60,000 for additional site resources and senior management.

A further £115,000 was awarded for prolongation and disruption, as well as £95,962 towards the cost of greater-than-expected use of Mace’s tower crane.

£31,822 in contra charges brought the total up to £824,478.

There are also various non-conformance reports relating to fabrication defects yet to be heard for which Cleveland Bridge may be liable.

Cleveland Bridge told CN they do not intend to appeal the ruling.

Severfield Rowen and Mace declined to comment.

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