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The plumbing and mechanical contractor on Penn State's new children's medical center in Hershey, Pa. is seeking arbitration with the general contractor.

For a subcontractor on a major hospital project in Hershey, Pa., BIM was a bust.

The plumbing and mechanical subcontractor on the Milton S. Hershey S. Medical Center Children’s Hospital project at Pennsylvania State University in Hershey says that the building information model prepared by general contractor L.F. Driscoll Co. revealed so many design errors and clashes that the subcontractor had to spend about $10 million—$2.5 million blamed directly on the late BIM model—above its contracted price of $18 million. The sub's price had been calculated based on customary paper plans.

While the hospital project is apparently close to completion, the subcontractor claims it has substantial cost overruns and that Driscoll has refused to pay what is owed. To recover its overruns, Rado Enterprises Inc. has filed for arbitration of the disputed amount and demanded payment under a bond provided by Travelers Casualty and Surety Co. of America. The matter won’t be heard by an American Arbitration Association panel until March.

Used in the early phases of a project for the benefit of a project team, BIM fosters harmony. It becomes part of a collaborative system through which design errors are detected early and resolved without rancor. Then project owners rest confident that no disputes can push their project behind schedule and over budget.

But to foster teamwork on a project with as many intricate pipe and duct systems as a hospital, the BIM model would have to be design-integrated—and in a way that helps avoid physical and legal clashes.

Built adjacent to the Penn State medical center, the Hershey children’s hospital project consists of a 263,000-sq-ft, five-story building with an additional floor below ground. The facility will include surgical suites, patient rooms, outpatient clinics and a radiology unit. The university’s website states that the total budget is about $207 million and that completion is scheduled for late 2012.

Substantial portions of the interior are in place, according to the hospital’s website, which says that several of the seven air-handling units are operating. Rado officials expect to receive certificates of substantial completion from Driscoll soon for portions of the job.
Without sharing and design integration, the use of a BIM model on the medical center became a figleaf that failed to conceal broad design shortcomings, claims Rado, a subsidiary of Wayne, Pa.-based Moro Corp., which has annual revenue of $90 million. Rado specializes in hospital work and had worked successfully years ago on one prior project with Driscoll, a Bala Cynwyd, Pa.-based general contractor.

Driscoll awarded the initial mechanical, plumbing and sheet metal contract to Rado in May, 2010.

According to arbitration documents filed by Rado, L.F. Driscoll employees told Rado officials that the design work was largely complete at the time Rado prepared its price. In addition, Rado claims Driscoll represented to Rado that the BIM model had been design-integrated and clash-detection completed. But the extensive defects, conflicts and clashes Rado found when Driscoll finally provided the BIM model to Rado were much more numerous than the subcontractor could have anticipated, the subcontractor contends.

Rado Enterprises President David Zeitler says thousands of errors surfaced when Driscoll provided Rado with the BIM model. “We probably have over 50,000 interferences,” he says, adding that Driscoll wanted Rado to straighten out the problems at its own expense.

Initially, L.F. Driscoll would not allow Rado to submit requests for information, Zeitler says. “They demanded our guys spend time trying to figure out their design deficiencies.”

According to a letter from Rado attorney Timothy J. Woolford to the AAA and Travelers, the BIM model revealed piping and ductwork colliding with structural members, conflicts required thousands of hours of work by Rado to untangle.

In some cases, piping and ductwork was “depicted outside the building,” says the attorney’s letter.

For additional fittings and the labor to install them, Rado submitted a claim to Driscoll in excess of $2.5 million, says the letter.

Design defects resulting from the BIM model application led L.F. Driscoll employees to direct Rado employees to change the project sequence, leaving Rado to start in the middle of the building, moving from west to east and then jumping over the middle to the opposite side, says the letter. The change resulted in much additional field labor by Rado employees, the subcontractor states.

Rado also is faulting the project’s architect, Boston-based Payette Associates, for the design mistakes.

David Menard, CEO and primary shareholder of Moro Corp., Rado’s parent, says his company has initiated a lawsuit against Payette. Menard speculates that Driscoll is  “way underwater and trying to put it on us and other subcontractors… If we don’t get this money, it’ll deal Rado a very severe financial blow. We want all of the money that we’re due.”

Officials of Driscoll, Payette and Penn State could not be reached for comment. There are no signs that the project is running late or of any cost overruns on Penn State or medical center websites.

The argument between Driscoll and Rado, and hints of possible trouble, may have begun as early as the initial notice to proceed from the general contractor.

Rado was supposed to have a written contract from L.F. Driscoll by March 2010, but didn’t get it until late May 2010, says Zeitler. “They were constantly pressuring us to start, after they gave us a verbal ‘go,’” he says.

“We felt comfortable in starting because we thought they were credible,” Menard says, noting that his company had successfully worked with the general contractor on a project many years before.