Examples
Frequently we report our findings to our Client who work with the contractors to recover funds. Therefore, in the following list our findings do not always reflect the amount of recovery made by our Clients.
Hospital
This project cost $62 million based upon a GMP contract having general conditions and mechanical contracting at cost.
Audit scope: Review and analyze construction contracts with the construction manager and mechanical subcontractor; thoroughly review payment applications and cost documentation at the offices of the construction manager and mechanical subcontractor.
Major over-billed costs were:
| "In-house store" material charges | $455,492 |
| Sub-subcontractor sheet metal fees | $101,304 |
| Duplicated small tool charges | $151,079 |
| Machine rentals more than cost | $351,248 |
| Excessive liability insurance billings | $100,855 |
| Various payroll over billings | $388,000 |
Our client performed all negotiations and recovered $1,130,000.
Less KBC costs and fees were $80,000. Client net recovery was $1,050,000.
Parking garage
This project was an $18 million GMP project with general conditions, concrete and structural steel at cost.
Audit scope: Review and analyze construction contracts with the construction manager, concrete and structural steel subcontractors; thorough review of payment applications and cost documentation at KBC offices.
KBC created audit issue backcharges amounting to $764,396.
Major over-billed costs were:
| Extra craft labor markup | $358,265 |
| Billed wrong project | $136,126 |
| Excessive liability insurance billings | $68,929 |
| Over-billed supplier costs | $41,471 |
KBC and our client performed negotiations and recovered $629,000.
Less KBC costs and fees were $31,000. Client net recovery was $598,000.
Manufacturing plant
The project was a $65 million Cost Plus project.
Audit scope: Review and analyze construction contracts with the construction manager and mechanical subcontractor; thoroughly review payment applications and cost documentation at KBC offices and the office of the plumbing/mechanical subcontractor.
Major over-billed costs were:
| Unsupported mechanical/control equipment | $103,005 |
| Apprentices billed at journeyman rates | $84,226 |
| Unsupported/undocumented labor | $60,854 |
KBC and our client performed negotiations and recovered $394,535.
KBC costs and fees were $61,000. Client net recovery $333,535.
Medical center
This project was a $110 million GMP design-build project with general conditions, concrete and structural steel at cost.
Audit scope: Review and analyze construction contracts with the construction manager who self performed much of the work on a cost plus basis, thoroughly review payment applications, change orders and cost documentation at KBC offices and the office of the construction manager.
Major over-billed costs were:
| Over-billed labor fringes of operators | $397,397 |
| Duplicate materials or general conditions items | $249,337 |
| Subcontractor over-billings | $183,964 |
| Labor futa and suta over-billed | $161,130 |
| Overhead costs duplicated | $181,132 |
| Non contract billable markups | $279,208 |
KBC and our client performed negotiations and recovered $1,101,845 with another $876,412 under closed door settlement.
KBC costs and fees were $150,000. Client net recovery - $951,845.
We have audited several projects in the $200 to $350 million range.