RE: RE: RE: RE: RE: time for a negotiation blitz I worked for many years in the construction industry and I know how the "extras" game is played.
It seemed very strange to me that in yesterdays release about a potential deal with Arcuso that it seemed like Orbite had capitulated to Arcuso.
If indeed Orbite has agreed to all of the "extras" charges then it is proof positve that they did not have a clue of how to go about building a plant with a contractor and the checks and balances that you have to have in place before you jump in.
If you have not set up a system of approvals for extras before they are performed then you are going to get screwed. If on top of that you did not keep a good paperflow documenting all of the changes and all of the details then you don't have a leg to stand on in defending your position.
Usually the contractor bills you an inflated charge for the extras and then you prove that it is not all justified and you saw off a deal. Of course you had better have your paperwork in place to back up your position.
It looks to me right now, and I hope I am wrong, that Orbite is just saying, " well ok, I guess we have to pay you." If that is true then it shows that Orbite is not able to defend its' position with backup documentation.
It would be normal for Orbite to have an owners representative such as an engineering consulting firm to oversee the construction and protect Orbites' interests. I don't know who they hired to do this but those are the people that are supposed to be keeping the documentation and tracking and approving all extras.
On the other hand,,, changes to design are really expensive to perform during construction.
They can add up in a hurry, so if an owner (Orbite) did not fully understand the consequences of changing things "on the fly" and were constantly changing things then the bill can get exhorbitant in a hurry.
Even if that was the case the contractors bill will be padded and if you have documentation then there is always room to decrease the bill, but you have to fight for it.
I hope that Orbite have not given up on reducing that bill yet.