PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED AT THE DIRECTION OF COUNSEL IN ANTICIPATION OF LITIGATION
MEMORANDUM
FROM: Dr. Elinor Chazen Lakeview Consulting Group LLC 200 South Wacker Drive, Suite 1400 Chicago, Illinois 60606
TO: Linda Osei, Esq. Responsible Partner Calderwood & Harkness LLP 425 Park Avenue, 33rd Floor New York, New York 10022
DATE: December 20, 2024
RE: Preliminary Critical Path and Delay Analysis — Meridian Infrastructure Partners LLC v. Northgate Fiber Americas Inc., Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024
C&H MATTER NO.: 1022-00005
STATUS: DRAFT — For Attorney Review Only; Not Final Expert Opinion
Right-click to update Table of Contents
I. Introduction and Engagement Summary
1.1 Purpose of Memorandum
This memorandum presents my preliminary findings from the construction delay and critical path analysis I have conducted in connection with the above-captioned matter. The purpose of this memorandum is to provide counsel with a comprehensive summary of my initial analytical conclusions regarding the causes and allocation of schedule delays on the Northgate Fiber Americas fiber-optic construction program, the schedule impact of quality defects documented in Non-Conformance Reports ("NCRs"), and my preliminary assessment of whether the delays experienced across the project's defined milestones were Contractor-caused or Owner-caused.
I wish to emphasize that this memorandum is a draft prepared for counsel's review and does not constitute my final expert report or final expert opinion. My final expert report is due on March 31, 2025, with a rebuttal report due on May 15, 2025, in accordance with the scheduling order entered in this action. My opinions as set forth herein are preliminary and are subject to refinement, modification, or expansion as additional discovery materials become available. In particular, I note that documents from seven third-party subcontractors and three municipal permitting authorities remain outstanding pursuant to subpoenas that have been issued but not yet fully responded to. Additionally, several depositions that are likely to yield material testimony relevant to my analysis have not yet occurred, including the deposition of Bridget Yeung, scheduled for February 4, 2025, and the deposition of Frank DiBello, scheduled for March 4, 2025. I expect that the testimony elicited in those depositions, as well as the resolution of pending privilege disputes (oral argument scheduled for January 27, 2025), may provide additional relevant information that will inform the final formulation of my opinions.
1.2 Engagement Background
I was retained by Calderwood & Harkness LLP on October 15, 2024, on behalf of the defendant and counterclaimant, Northgate Fiber Americas Inc. ("NFA" or "Northgate"), to serve as a construction delay and critical path analysis expert in the above-captioned litigation. My engagement encompasses the following scope of work:
(a) Critical path analysis of the project schedule, including identification of critical path activities for each milestone period and assessment of delay events along those critical paths;
(b) Delay causation assessment, including allocation of responsibility for delay among the Contractor, the Owner, concurrent causes, and excusable events;
(c) Evaluation of the Non-Conformance Reports issued over the life of the project, including analysis of the severity and legitimacy of the quality defects identified therein;
(d) Assessment of the schedule impact of quality defects and associated rework requirements on the critical path; and
(e) Opinion on whether the delays experienced across the project's milestones were Contractor-caused or Owner-caused, and whether the termination for cause was supported by the pattern of delay and non-conformance.
I am qualified to render these opinions based on my more than twenty-five years of experience in construction delay analysis, critical path methodology, and the assessment of complex infrastructure construction disputes. I hold a Ph.D. in Civil Engineering from the University of Illinois at Urbana-Champaign, with a specialization in construction project management and scheduling. I have served as a testifying expert in over forty construction disputes in federal and state courts and in domestic and international arbitrations, and I have particular experience with fiber-optic and telecommunications infrastructure projects. My full curriculum vitae will be appended to my final expert report as Appendix A.
1.3 Materials Reviewed
In formulating the preliminary findings set forth in this memorandum, I have reviewed the following materials, among others:
1. The Master Construction Agreement ("MCA") dated March 15, 2020, between Northgate Fiber Americas Inc. and Meridian Infrastructure Partners LLC ("Meridian"), including all exhibits thereto. I have paid particular attention to Exhibit B (Milestone Values), Exhibit C (Technical Specifications incorporating NS-FIBER-2020), and Exhibit D (Baseline CPM Schedule).
2. The MCA project schedule and the fourteen (14) defined milestones set forth under MCA § 8.2, including the contractually specified milestone completion dates and associated milestone payment values.
3. Monthly progress reports and schedule updates submitted by Meridian to NFA's construction management team, spanning the period from April 2020 through March 2024. These monthly submissions include narrative progress reports, updated CPM schedules, look-ahead schedules, and earned value data.
4. Two hundred eighty-seven (287) Non-Conformance Reports, of which forty-three (43) were classified as "critical" and two hundred forty-four (244) were classified as "non-critical." I have reviewed the full catalog of these NCRs as organized in the spreadsheet prepared by Calderwood & Harkness, which includes dates, phases, milestones, defect types, severity classifications, cure status, and estimated remediation costs.
5. Cure Notice No. 1, dated January 18, 2024, issued by NFA to Meridian; Meridian's response thereto, dated February 2, 2024; Cure Notice No. 2, dated February 19, 2024; Meridian's Corrective Action Plan, submitted March 5, 2024; NFA's rejection of the Corrective Action Plan, dated March 12, 2024; and the Notice of Termination for Cause, issued April 1, 2024.
6. Deposition transcripts of the following witnesses:
(a) Renata Voss, deposed November 12–13, 2024;
(b) Sean Calloway, deposed November 19, 2024;
(c) Marcus Henley, deposed December 3–4, 2024; and
(d) Victor Sandoval, deposed December 10–11, 2024.
7. Northgate's internal quality assurance monthly reports documenting quality defects identified during Phase 2 construction activities, including field photographs, test data, and corrective action tracking logs.
8. Payment applications and progress certifications for all three phases of the project, including NFA's marked-up responses, disputed line items, and correspondence regarding payment withholding.
9. Meridian's Verified Complaint, filed July 15, 2024, and NFA's Answer with Counterclaims, filed September 3, 2024.
10. Select documents from Northgate's document production of approximately 1.4 million documents (3.2 TB) and Meridian's document production of approximately 890,000 documents (1.8 TB), as identified and provided to me by Calderwood & Harkness. My review has focused on the documents most relevant to schedule, delay causation, quality defects, cure efforts, and the termination decision.
11. Third-party subpoena responses received to date. I note that seven (7) subcontractor subpoenas and three (3) municipal permitting authority subpoenas remain outstanding, and I expect the responses to those subpoenas to provide additional relevant information, particularly regarding the permitting timeline and subcontractor performance issues.
12. Weather data from the National Oceanic and Atmospheric Administration ("NOAA") for the seven-state project area, covering the period from April 2020 through April 2024.
13. Industry data on construction labor market conditions and fiber cable supply chain lead times for the period 2020–2024.
A comprehensive list of all materials reviewed will be finalized and included as Appendix B to my final expert report.
II. Project Overview and Contractual Framework
2.1 The Master Construction Agreement
The Master Construction Agreement between NFA and Meridian was executed on March 15, 2020. NFA issued its Notice to Proceed ("NTP") on April 1, 2020, establishing the commencement date for the project schedule.
The scope of work under the MCA encompasses the design, engineering, permitting, and construction of approximately 18,500 route miles of underground and aerial fiber-optic cable across seven states: New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia. The project contemplated the installation of both underground conduit and fiber cable (via directional boring, open-cut trenching, and microtrenching methods) and aerial cable (via existing utility pole attachments and new pole installations), together with all associated splice closures, vaults, handholes, and termination points required to create a continuous fiber-optic network across the designated service territory.
The total Contract Price was $1.2 billion, structured as a hybrid pricing arrangement consisting of sixty-five percent (65%) fixed-price milestones ($780 million) and thirty-five percent (35%) unit-rate pricing ($420 million). The fixed-price milestone component provided for progress payments upon the achievement of each of the fourteen defined milestones, with the milestone values set forth in MCA Exhibit B. The unit-rate pricing component applied to certain categories of work, including bore footage, aerial cable placement, and splice closures, with unit rates specified in MCA Exhibit B-1.
The original contractual completion date for the entire project was March 31, 2025, representing a five-year performance period from the NTP date. The MCA established fourteen (14) defined milestones under Section 8.2, with interim completion certificates to be issued for each phase upon the achievement of all milestones within that phase.
The MCA is governed by the laws of the State of New York, as specified in MCA § 22.1, and this action is properly before the Supreme Court of the State of New York, New York County, Commercial Division.
2.2 Three-Phase Structure
The MCA organized the project into three geographically defined phases, each with its own set of milestones, milestone values, and target completion dates. The three-phase structure was designed to allow Meridian to mobilize progressively across the seven-state footprint, with each successive phase building upon the workforce, equipment, and operational infrastructure established in the preceding phase.
Phase 1: New York Metro & Northern New Jersey. Phase 1 encompassed approximately 3,200 route miles of fiber-optic cable construction in the New York metropolitan area and the northern New Jersey corridor. The aggregate milestone value for Phase 1 was $208 million. Phase 1 was divided into Milestones 1 through 4, with a planned performance period from April 2020 through September 2021.
Phase 2: Connecticut, Western Massachusetts, and Southern Pennsylvania. Phase 2 encompassed approximately 5,600 route miles across the Connecticut, western Massachusetts, and southern Pennsylvania corridors. The aggregate milestone value for Phase 2 was $363 million. Phase 2 was divided into Milestones 5 through 8, with a planned performance period from October 2021 through June 2023.
Phase 3: Maryland, Virginia, and Eastern Pennsylvania. Phase 3, the largest phase by both route mileage and contract value, encompassed approximately 9,700 route miles across Maryland, Virginia, and eastern Pennsylvania. The aggregate milestone value for Phase 3 was $629 million. Phase 3 was divided into Milestones 9 through 14, with a planned performance period from July 2023 through March 2025.
2.3 Relevant Contractual Provisions for Delay Analysis
Several provisions of the MCA are of central importance to my critical path and delay analysis. I summarize them as follows:
MCA § 8.2 — Milestone Schedule. Section 8.2 required the Contractor to achieve each of the fourteen defined milestones by specified dates set forth in Exhibit B to the MCA. Each milestone was defined by reference to specific deliverables, including completion of designated route segments, successful fiber testing, and acceptance by NFA's construction management team. The Contractor was obligated to maintain a staffing plan and work schedule sufficient to achieve timely milestone completion.
MCA § 9.1 — Liquidated Damages for Delay. Section 9.1 established a liquidated damages mechanism for unexcused delays in milestone achievement. The liquidated damages rate was $175,000 per day per milestone for each day of delay beyond the milestone completion date that was not attributable to an excusable delay event. Section 9.1 further provided that liquidated damages for any individual milestone would be capped at ten percent (10%) of the milestone value for that particular milestone, and that the aggregate liquidated damages across all milestones would be capped at five percent (5%) of the total Contract Price, or $60 million.
MCA § 12.4 — Quality Standards. Section 12.4 required that all work be performed in accordance with Northgate Technical Specification NS-FIBER-2020, as well as applicable industry standards, including ANSI/TIA-568 and BICSI guidelines. The Contractor was obligated to maintain a quality assurance and quality control ("QA/QC") program sufficient to ensure compliance with these standards, and NFA retained the right to conduct inspections and testing at any time and to issue Non-Conformance Reports for work that failed to meet the specified standards.
MCA § 14.1 — Termination for Cause by Owner. Section 14.1 provided that the Owner could terminate the MCA for cause in the event of a material breach by the Contractor that remained uncured for thirty (30) calendar days after written notice of the breach was provided to the Contractor. The section further provided that, upon termination for cause, the Owner would be entitled to complete the work using a replacement contractor and to recover from the Contractor any excess costs incurred in completing the work over and above the remaining unpaid contract balance.
MCA § 16.1 — Change Orders. Section 16.1 established the procedure for changes to the scope of work or the project schedule. Under this provision, any change to the scope, schedule, or Contract Price required a written Change Order signed by authorized representatives of both parties. The Contractor was obligated to submit a Change Order Request within fifteen (15) business days of becoming aware of any condition that it believed warranted a change, and the Owner was required to respond within ten (10) business days of receipt. The section further provided that the Contractor's failure to submit a timely Change Order Request would constitute a waiver of any claim for additional compensation or schedule relief arising from the alleged change.
MCA § 5.3 — Permitting Responsibilities. Section 5.3 allocated permitting responsibilities between the Owner and the Contractor. This provision is of particular significance because Meridian has asserted in its pleadings and in discovery that NFA failed to timely obtain permits that were the Owner's responsibility, causing delays to Meridian's performance. As discussed in greater detail in Section V.1 below, my preliminary analysis of MCA § 5.3 indicates that the provision establishes a bifurcated permitting structure, and that the majority of the permits Meridian identifies as delayed were, in fact, within the Contractor's scope of responsibility.
2.4 Quality Standards and Technical Specifications
The quality framework established by the MCA and its incorporated technical specifications is central to the analysis of delay causation in this case, because a significant portion of the delays experienced on the project were driven by rework necessitated by quality defects.
Northgate Technical Specification NS-FIBER-2020, incorporated by reference in MCA Exhibit C, governs detailed technical requirements for all aspects of fiber-optic cable construction, including splice loss tolerances, conduit depth requirements, cable routing parameters, minimum bend radius requirements, documentation requirements, and acceptance testing protocols. NS-FIBER-2020 establishes, among other things, maximum permissible splice loss thresholds for each fiber strand, minimum conduit burial depths calibrated to the frost line depth in each geographic corridor, and mandatory routing approval procedures requiring engineering sign-off before any deviation from the approved route design.
In addition to NS-FIBER-2020, the MCA incorporated by reference the applicable provisions of ANSI/TIA-568 (Telecommunications Infrastructure Standard for Commercial Buildings) and BICSI guidelines (Building Industry Consulting Service International) as supplementary industry standards governing fiber-optic cable installation and testing.
The NCR process under the MCA and NS-FIBER-2020 operated as follows: NFA's quality assurance team was authorized to issue Non-Conformance Reports whenever work was found to deviate from the applicable specifications. Each NCR was categorized as either "critical" or "non-critical" based on the severity of the defect and its potential impact on system performance and reliability. Critical NCRs required immediate cessation of related work activities, submission of a corrective action plan by the Contractor within five (5) business days, and NFA approval of the corrective action plan before work could resume. Non-critical NCRs required corrective action within a specified timeframe but did not mandate an immediate work stoppage.
III. Critical Path Analysis Methodology
3.1 Methodology Overview
My analysis employs a contemporaneous schedule analysis approach, utilizing an as-planned versus as-built methodology supplemented by a "windows analysis" technique. This methodology is widely recognized and accepted in the construction industry and in construction litigation as a reliable method for identifying, quantifying, and allocating delays on complex construction projects. It is consistent with the methodologies endorsed by the Association for the Advancement of Cost Engineering ("AACE") in its Recommended Practice No. 29R-03 and by the Society of Construction Law in its Delay and Disruption Protocol.
The first step in my analysis was to build a detailed as-planned critical path model from the baseline CPM (Critical Path Method) schedule that was attached to the MCA as Exhibit D and submitted by Meridian at the outset of the project. The baseline schedule contained approximately 4,200 individual activities with defined durations, predecessor-successor logic relationships, and resource allocations. From this baseline, I identified the critical path — the longest continuous chain of dependent activities that determined the earliest possible completion date — for each milestone period.
The second step was to construct the as-built schedule, which represents what actually occurred on the project. I built the as-built schedule from Meridian's monthly schedule updates, daily field logs, progress reports, payment applications, and other contemporaneous project records. By comparing the as-planned schedule to the as-built schedule, I was able to identify variances and to trace those variances to specific delay events and causative factors.
The third step was to apply the windows analysis technique. Under this approach, the project timeline is divided into discrete analytical "windows" — typically corresponding to milestone periods or other logical intervals — and the critical path and delay events are assessed independently within each window. This technique avoids the distortions that can arise when delay events are assessed retrospectively over the entire project duration without regard to the sequential development of delays, and it allows for a more precise allocation of delays to specific causes.
3.2 Data Sources and Inputs
The data sources and inputs for my critical path analysis include the following:
1. Meridian's Baseline CPM Schedule. The baseline CPM schedule submitted with the MCA as Exhibit D serves as the starting point for the as-planned analysis. This schedule was developed by Meridian's project controls team and was accepted by NFA at the time of contract execution. It contains approximately 4,200 activities, including design, permitting, mobilization, construction (boring, trenching, cable placement, splicing, testing), and closeout activities for each of the fourteen milestones.
2. Monthly Schedule Updates. Meridian submitted monthly schedule updates to NFA's construction management team, led by Sean Calloway, throughout the project's duration from April 2020 through March 2024. These updates include revised activity durations, actual start and finish dates for completed activities, percentage complete for in-progress activities, and narrative explanations for schedule variances.
3. Daily Field Reports and Crew Mobilization Logs. Meridian's field operations team, under the direction of Marcus Henley (VP of Field Operations), maintained daily field reports documenting crew counts, equipment utilization, weather conditions, work activities performed, and any issues or incidents encountered. These reports provide granular data on actual work progress and resource deployment.
4. NFA's Internal Project Tracking Database and QA Monitoring Reports. NFA maintained its own internal project tracking system, which includes records of inspections, test results, NCR issuances and dispositions, and progress assessments. The QA monitoring reports provide an independent record of work quality and progress that can be compared against Meridian's self-reported data.
5. Weather Data. I obtained historical weather data from the National Oceanic and Atmospheric Administration ("NOAA") for each geographic corridor within the seven-state project area. This data includes daily temperature, precipitation, snowfall, and wind speed records, which I have used to assess whether any delays were attributable to unusually severe weather conditions qualifying as force majeure events under MCA § 18.1.
6. Municipal Permitting Records. I have reviewed the municipal permitting records obtained to date through third-party subpoenas. As noted, responses from several municipal authorities remain outstanding, and this is an area where my analysis may be refined upon receipt of additional data.
7. Change Request Correspondence. I have reviewed the correspondence between the parties relating to Change Order Requests, alleged scope changes, and Requests for Information ("RFIs"), to the extent such correspondence has been produced in discovery and identified by Calderwood & Harkness as relevant to my analysis.
3.3 Analysis Windows
I have organized my analysis into three primary windows corresponding to the three phases of the project, with sub-windows for each individual milestone period within those phases:
Window 1: Phase 1 (April 2020 – October 2021) — Milestones 1 through 4. This window covers the initial project mobilization and the construction of approximately 3,200 route miles in the New York Metro and Northern New Jersey corridors. Within this window, I have assessed each of the four Phase 1 milestones individually.
Window 2: Phase 2 (October 2021 – Termination on April 1, 2024) — Milestones 5 through 8. This window covers the construction of approximately 5,600 route miles in the Connecticut, Western Massachusetts, and Southern Pennsylvania corridors. This window encompasses the period during which the most significant delays and quality defects occurred. I have assessed each of the four Phase 2 milestones individually, with particular attention to the cascading effects of delays from earlier milestones into later ones.
Window 3: Phase 3 (July 2023 – Termination on April 1, 2024) — Milestones 9 through 14 (partial). This window covers the approximately nine-month period between Meridian's initial Phase 3 mobilization and the date of termination. Because Meridian achieved only minimal progress on Phase 3 before termination, this window is assessed on an aggregate basis rather than on a milestone-by-milestone basis.
Within each window, I have identified the activities that were on the critical path during each sub-window period, assessed the delay events that affected those critical path activities, and allocated the delay among the categories described in Section 3.4 below.
3.4 Delay Categorization Framework
For purposes of this analysis, I have categorized each identified delay event into one of the following four categories:
Contractor-caused delays. Delays attributable to Meridian's actions or inactions, including but not limited to: inadequate crew staffing and resource deployment; sequencing errors in the scheduling and performance of construction activities; mismanagement of subcontractors; defective work requiring rework; failure to maintain adequate QA/QC programs; and failure to timely obtain permits that were within the Contractor's scope of responsibility under MCA § 5.3. Contractor-caused delays are not excusable and expose Meridian to liquidated damages under MCA § 9.1.
Owner-caused delays. Delays attributable to NFA's actions or inactions, including but not limited to: late delivery of Owner-furnished materials; failure to timely obtain permits within the Owner's scope of responsibility; directed scope changes; site access restrictions imposed by the Owner; and design changes directed by the Owner. Owner-caused delays would entitle the Contractor to schedule relief and, depending on the circumstances, potentially to additional compensation.
Concurrent delays. Periods during which both Contractor-caused and Owner-caused delays overlapped on the critical path, such that neither party's delay alone would have eliminated the schedule impact. Under New York law and standard construction industry practice, the treatment of concurrent delays is a nuanced issue; in general, where delays are truly concurrent on the critical path, neither party may recover delay damages from the other for the concurrent period.
Excusable delays. Force majeure events, unusually severe weather, acts of government, and other events beyond the reasonable control of either party, as defined in MCA § 18.1. Excusable delays entitle the Contractor to schedule relief (i.e., an extension of time) but generally do not entitle the Contractor to additional compensation.
IV. Phase-by-Phase Delay Analysis and Findings
4.1 Phase 1: New York Metro & Northern New Jersey (Milestones 1–4)
4.1.1 Milestones 1, 2, and 4
Milestones 1, 2, and 4 were completed either on time or within the contractual tolerances established in the MCA. My analysis has not identified any significant critical path delays for these milestones. Meridian's initial mobilization during Phase 1 was generally smooth, and the Contractor was able to deploy sufficient resources to maintain progress in accordance with the baseline schedule. Crew levels during the initial months of the project were adequate, and the work in the New York Metro corridor — which consisted primarily of underground conduit installation via directional boring and cable placement through existing conduit infrastructure — proceeded without material disruption.
The on-time performance of these milestones is relevant context for the subsequent analysis of Phase 2 delays, because it demonstrates that Meridian was initially capable of performing in accordance with the project schedule, and that the delays that later emerged in Phase 2 and Phase 3 were not attributable to inherent project design flaws or systemic external impediments, but rather to a deterioration in Meridian's own performance capabilities over time.
4.1.2 Milestone 3 — 47-Day Delay
Milestone 3 had a target completion date of August 28, 2021. Actual completion was achieved on October 14, 2021, a delay of forty-seven (47) calendar days. NFA assessed liquidated damages for this delay in the amount of $8,225,000 (47 days × $175,000/day), as set forth in NFA's LD assessment letter dated November 5, 2021. This amount was deducted from a subsequent payment application submitted by Meridian.
My preliminary critical path analysis has identified the following root causes for the Milestone 3 delay:
Inadequate Staffing of Directional Boring Crews in Northern New Jersey. The dominant cause of the Milestone 3 delay was Meridian's failure to adequately staff its directional boring crews in the northern New Jersey corridor. Crew mobilization logs from the July through September 2021 period show that Meridian deployed only sixty to sixty-five percent (60–65%) of the planned labor capacity for directional boring activities in this corridor. Directional boring was on the critical path for Milestone 3, as it was a predecessor activity to cable placement, splicing, and testing. The understaffing of boring crews directly resulted in a slower rate of conduit installation, which pushed the entire downstream chain of activities beyond the milestone completion date.
Sequencing Errors in Cable Placement Activities. In addition to the staffing shortfall, my analysis identified sequencing errors in Meridian's execution of cable placement activities. Specifically, Meridian's field team placed cable in certain segments out of the optimal sequence, which disrupted the planned sequencing of splicing and testing activities. Instead of proceeding in the planned geographic sequence that would have allowed splicing crews to follow closely behind cable placement crews, the out-of-sequence cable placement created a serial dependency that required splicing crews to remobilize to non-contiguous segments, adding transit time and reducing productivity.
Minor Concurrent Factor — Late Material Delivery. My analysis identified a minor concurrent factor: NFA's late delivery of fiber cable to one of the staging areas in the northern New Jersey corridor. The late delivery caused approximately five to eight (5–8) days of delay to cable placement activities in that particular staging area. However, upon further analysis, I have determined that this late material delivery was not on the critical path for the dominant delay activities. The affected cable placement activities were not the critical path activities during the relevant period; rather, the directional boring activities discussed above controlled the critical path. Accordingly, the NFA material delivery issue, while unfortunate, did not independently extend the milestone completion date.
Preliminary Conclusion. Based on my analysis to date, the Milestone 3 delay was predominantly Contractor-caused. Of the total forty-seven (47) days of delay, I estimate that approximately forty to forty-two (40–42) days are attributable to Meridian's inadequate staffing and sequencing errors. The remaining five to seven (5–7) days may involve minor concurrent Owner-related issues, but these were not on the critical path for the dominant delay activities and therefore did not independently contribute to the milestone delay.
4.2 Phase 2: Connecticut, Western Massachusetts, Southern Pennsylvania (Milestones 5–8)
Phase 2 is the focal point of the delay analysis in this case. The delays experienced during Phase 2 were severe and escalating, progressing from a twenty-two (22) day delay at Milestone 5 to a one hundred thirty-four (134) day delay (and counting) at the time of termination for Milestone 8. The Phase 2 delays were driven by a combination of continued staffing deficiencies, systemic quality control failures generating a massive volume of Non-Conformance Reports, and the cascading effects of rework requirements consuming critical path time and diverting resources from forward progress.
4.2.1 Milestone 5 — 22-Day Delay
Milestone 5 had a target completion date as specified in MCA Exhibit B. Actual completion was achieved twenty-two (22) calendar days after the target date. NFA assessed liquidated damages in the amount of $3,850,000 (22 days × $175,000/day).
My preliminary analysis has identified the following root causes for the Milestone 5 delay:
Continued Crew Shortage Issues. The staffing deficiencies that emerged during Phase 1 continued and worsened during Phase 2. Marcus Henley, Meridian's Vice President of Field Operations, testified during his deposition on December 3–4, 2024, that Meridian experienced significant difficulty recruiting qualified fiber splicers and boring operators for the Connecticut corridor. Critically, Mr. Henley acknowledged during his testimony that this staffing challenge was an internal Meridian problem — specifically, difficulty attracting and retaining experienced personnel — rather than a consequence of COVID-19 supply constraints. By the time Phase 2 commenced in approximately October 2021, the initial pandemic-related disruptions to the construction labor market had substantially subsided, and Mr. Henley's testimony confirms that Meridian's staffing difficulties were attributable to its own internal management and compensation practices rather than to external market conditions.
Subcontractor Performance Issues. Two of Meridian's subcontractors in the Connecticut region underperformed relative to their contractual commitments to Meridian. The underperformance of these subcontractors resulted in slower progress on conduit installation and cable placement activities, contributing to the overall schedule slippage. Under the MCA, Meridian is responsible for the performance of its subcontractors, and subcontractor delays attributable to Meridian's selection, supervision, or management of its subcontractors are properly categorized as Contractor-caused delays.
Preliminary Conclusion. The Milestone 5 delay was primarily Contractor-caused. Of the twenty-two (22) days of delay, I estimate that approximately twenty to twenty-two (20–22) days are attributable to Meridian's crew shortages and subcontractor performance issues. I have not identified any significant Owner-caused delay factors for this milestone period, although a marginal zero to two (0–2) days of potential concurrent delay cannot be fully excluded pending further review of outstanding materials.
4.2.2 Milestone 6 — 68-Day Delay
Milestone 6 experienced a delay of sixty-eight (68) calendar days beyond its target completion date. NFA assessed liquidated damages in the amount of $11,900,000 (68 days × $175,000/day). The Milestone 6 period marks the emergence of significant quality failures as a major driver of schedule delays.
Quality Failures in Western Massachusetts. During the Milestone 6 period, NFA's quality assurance team issued eighty-seven (87) Non-Conformance Reports for work performed in the western Massachusetts corridor, including sixteen (16) classified as critical. The critical NCRs documented the following categories of defects:
(a) Splice loss exceeding NS-FIBER-2020 specifications. Multiple fiber splices were found to have optical loss values exceeding the maximum permissible thresholds established in NS-FIBER-2020. These defective splices required complete re-splicing of the affected fiber segments — a process that involved remobilization of splicing crews, removal of existing splice closures, performance of new fusion splices, and re-testing to confirm compliance with specifications.
(b) Improper conduit depth below frost line requirements. Conduit was found to have been installed at depths insufficient to meet the minimum burial depth requirements established in NS-FIBER-2020 for the western Massachusetts climate zone. Conduit installed above the frost line depth is vulnerable to frost heave and to third-party dig-in damage. Remediation of these defects required excavation of the installed conduit, re-excavation of the trench to the proper depth, and reinstallation of the conduit.
(c) Unauthorized route deviations. Meridian's field crews deviated from the approved fiber routes in several locations without obtaining the required engineering approval. These unauthorized deviations necessitated re-engineering of the affected route segments, re-permitting in certain cases, and in some instances complete rerouting and reconstruction of the deviated segments.
Schedule Impact of Rework. The rework required to remediate these quality defects consumed approximately thirty-five to forty (35–40) days of critical path time during the Milestone 6 period. Rework activities diverted crews and equipment from planned forward-progress work, compounding the schedule impact beyond the direct duration of the rework activities themselves.
Permitting Issues. Meridian has argued that NFA's permitting delays in the western Massachusetts corridor contributed to the Milestone 6 delay. My analysis of the municipal permitting records obtained to date for the western Massachusetts towns in question suggests that some permits were delayed by two to three (2–3) weeks. However, the allocation of permitting responsibility under MCA § 5.3 requires further analysis for this specific corridor. My preliminary assessment is that most of the municipal permits at issue were the Contractor's responsibility under MCA § 5.3, and that the Owner was responsible for state-level right-of-way permits, which were obtained in a timely manner. I estimate that a net total of approximately ten to fifteen (10–15) days of the Milestone 6 delay may involve Owner-related permitting issues, subject to further review of the outstanding municipal permitting authority subpoena responses.
Preliminary Conclusion. The Milestone 6 delay was predominantly Contractor-caused. The dominant factor — over fifty (50) days — was the quality failures and resulting rework, compounded by continued staffing deficiencies. A partial concurrent delay of approximately ten to fifteen (10–15) days may be attributable to permitting issues, subject to further analysis of the MCA § 5.3 allocation and the outstanding subpoena responses. Zero to three (0–3) days of potentially excusable delay from weather events has been identified but not yet confirmed.
4.2.3 Milestone 7 — 91-Day Delay
Milestone 7 experienced a delay of ninety-one (91) calendar days beyond its target completion date. NFA assessed liquidated damages in the amount of $15,925,000 (91 days × $175,000/day). The Milestone 7 delay represents a significant escalation of the schedule problems that emerged during Milestone 6, and demonstrates the cascading nature of Meridian's performance failures.
Cascading Effects of Milestone 6 Rework. The Milestone 6 quality defects and associated rework requirements were not fully resolved before Milestone 7 activities were scheduled to commence. As a result, crews that were planned to mobilize to Milestone 7 work areas were instead retained on Milestone 6 rework activities, delaying the start of critical Milestone 7 predecessor activities.
Continued and Worsening Quality Defects. During the Milestone 7 period, NFA's quality assurance team issued an additional one hundred twelve (112) Non-Conformance Reports, including eighteen (18) classified as critical. The critical NCRs during this period documented recurring splice loss failures of the same type observed during Milestone 6, as well as a systemic conduit depth problem in the southern Pennsylvania corridor that affected multiple route segments. The repetitive nature of these defects — the same types of failures occurring again and again across different geographic segments — is indicative of a systemic quality control breakdown rather than isolated construction errors.
Deposition Testimony Regarding Quality Control Degradation. Marcus Henley's deposition testimony from December 3–4, 2024, is particularly relevant to the Milestone 7 delay analysis. Mr. Henley acknowledged during his deposition that Meridian had difficulty maintaining quality control with crews working overtime hours in an effort to recover the project schedule. This testimony confirms the causal relationship between Meridian's schedule recovery efforts and the quality defects: in attempting to accelerate work to recover from prior delays, Meridian's crews produced substandard work that required rework, which in turn generated further delays — a vicious cycle that accelerated throughout the Milestone 7 period.
The deposition testimony of Victor Sandoval, Meridian's Chief Financial Officer, from December 10–11, 2024, provides additional context. Mr. Sandoval admitted during his testimony that Ridgepoint Capital Group LP — Meridian's private equity sponsor — had been pressuring Meridian's management to reduce project costs. Mr. Sandoval further admitted that this pressure led to reductions in QA/QC staffing levels. This testimony is significant because it establishes a direct link between Meridian's financial management decisions and the quality control failures that drove the schedule delays: Meridian's private equity sponsor's demand for cost reductions led to reduced QA/QC staffing, which in turn led to increased quality defects, which in turn led to rework and schedule delays.
Meridian's Corrective Action Plan as an Admission. Meridian's Corrective Action Plan, submitted on March 5, 2024, in response to Cure Notice No. 2, proposed, among other measures, the addition of dedicated QA/QC personnel to each active crew and the implementation of enhanced inspection protocols at designated hold points. In my professional opinion, the Corrective Action Plan implicitly acknowledges that the quality-driven delays were caused by inadequate QA/QC staffing and procedures — precisely the deficiencies that Mr. Sandoval admitted were the result of cost reduction pressure from Ridgepoint Capital Group LP. The Corrective Action Plan constitutes an admission against interest insofar as it acknowledges the very deficiencies that NFA identified in its cure notices.
Alleged Owner-Directed Scope Changes. Meridian asserts that fourteen (14) Owner-directed scope changes were implemented during the Phase 2 period but were never formalized as Change Orders in accordance with MCA § 16.1. Meridian contends that these unformalized scope changes caused schedule delays for which it should receive relief.
My preliminary review of the correspondence and field directives related to the fourteen (14) alleged scope changes indicates the following:
(a) Five to six (5–6) of the alleged changes involve potentially legitimate scope modifications, including the addition of access points at certain locations, routing modifications to avoid newly constructed third-party facilities, and upgraded conduit specifications in certain corridors. These items may have had some schedule impact, which I estimate at approximately ten to twenty (10–20) days in the aggregate.
(b) Three to four (3–4) of the alleged changes are, upon review of the underlying documentation, routine design clarifications or RFI responses. These items fall within the normal course of construction administration and do not constitute scope changes that would entitle the Contractor to schedule relief or additional compensation.
(c) Four to five (4–5) of the alleged changes are field-level adjustments that were initiated by Meridian's own field crews and subsequently characterized by Meridian as Owner-directed changes. The contemporaneous documentation does not support Meridian's characterization of these items as Owner-directed scope modifications.
I further note that MCA § 16.1 requires that any change to the scope of work be documented in a written Change Order signed by authorized representatives of both parties, and that the Contractor was obligated to submit a Change Order Request within fifteen (15) business days of becoming aware of any condition warranting a change. My preliminary review indicates that Meridian did not submit timely Change Order Requests for most of the fourteen alleged items, raising a question of waiver under MCA § 16.1.
Preliminary Conclusion. The Milestone 7 delay was predominantly Contractor-caused. I estimate that approximately sixty-five to seventy-five (65–75) of the ninety-one (91) days of delay are attributable to Contractor-caused factors, including the cascading effects of Milestone 6 rework, continued and worsening quality defects, and QA/QC staffing reductions driven by Meridian's cost reduction decisions. A limited concurrent Owner-caused delay of approximately ten to twenty (10–20) days may be attributable to possible informal scope modifications, subject to further analysis of MCA § 16.1 compliance requirements and the legitimacy of Meridian's scope change claims. Zero to six (0–6) days of potentially excusable delay from weather or other external factors has been identified but requires further verification.
4.2.4 Milestone 8 — Never Completed (134 Days of Delay Accrued at Termination)
Milestone 8 was never completed. At the time of NFA's termination for cause on April 1, 2024, one hundred thirty-four (134) calendar days of delay had accrued beyond Milestone 8's target completion date, and the Milestone 8 work remained substantially incomplete. NFA calculated liquidated damages for this delay at $23,450,000 (134 days × $175,000/day); however, this amount exceeds the per-milestone cap under MCA § 9.1, which limits liquidated damages for any individual milestone to ten percent (10%) of the milestone value. The Milestone 8 value is $91 million, yielding a per-milestone cap of $9,100,000. Accordingly, NFA has assessed liquidated damages for Milestone 8 at the capped amount of $9,100,000.
Root Causes. The Milestone 8 delay is attributable to the following Contractor-caused factors:
Cascading Impacts from Milestones 6 and 7. The delays and rework requirements from Milestones 6 and 7 had a direct cascading impact on Milestone 8 activities. Resources that were planned for Milestone 8 work were instead consumed by ongoing Milestone 6 and 7 rework and remediation activities, delaying the commencement and progress of Milestone 8 predecessor activities.
Effective Demobilization of Southern Pennsylvania Crews. By late 2023, Meridian had effectively demobilized its construction crews from the southern Pennsylvania corridor, where the remaining Milestone 8 work was concentrated. Field reports from this period indicate that Meridian redirected its southern Pennsylvania resources to attempt Phase 3 mobilization in Maryland, evidently in an effort to demonstrate progress across a broader geographic front. This resource diversion left the Milestone 8 work severely understaffed.
Critical Staffing Deficit. Field reports and daily crew logs from November 2023 onward indicate that Meridian had fewer than forty percent (40%) of the planned crew complement deployed on Milestone 8 activities. At these staffing levels, completion of the Milestone 8 work within any reasonable timeframe was not achievable.
Continuing Quality Defects Post-Cure Notice. Twelve (12) additional critical NCRs were issued in February 2024 alone — that is, after Cure Notice No. 1 was issued on January 18, 2024. These critical NCRs documented the same types of defects — splice loss failures, conduit depth deficiencies, and unauthorized route deviations — that had been identified in the cure notice. The issuance of twelve additional critical NCRs within approximately one month of the first cure notice demonstrates that Meridian had not remedied its quality control deficiencies and was not on a trajectory to achieve compliance.
Preliminary Conclusion. The Milestone 8 delay is entirely Contractor-caused. I have not identified any credible Owner-caused or excusable delay factors for this milestone period. The Milestone 8 delays are the product of the cumulative and cascading effects of Meridian's systemic performance failures across Phase 2, including inadequate staffing, quality control breakdown, resource diversion, and failure to cure documented deficiencies.
4.3 Phase 3: Maryland, Virginia, Eastern Pennsylvania (Milestones 9–14)
4.3.1 Minimal Progress Before Termination
Phase 3 was planned to commence in July 2023 and encompass the construction of approximately 9,700 route miles across Maryland, Virginia, and eastern Pennsylvania, representing the largest and most complex phase of the project. Meridian did mobilize crews in Maryland beginning in July 2023; however, by the date of termination on April 1, 2024, Meridian had completed only approximately 340 of the planned 9,700 route miles — a mere 3.5 percent of the Phase 3 scope.
During this approximately nine-month period, Meridian submitted payment applications totaling $48.2 million for Phase 3 work. NFA approved and paid $31.7 million, and the remaining $16.5 million was disputed. The disputed amounts relate primarily to defective work that did not warrant payment under the MCA's quality standards and to inflated unit counts in Meridian's payment applications.
Meridian's Phase 3 mobilization was inadequate from its inception. The Contractor deployed a fraction of the crew levels that would have been necessary to meet the Phase 3 milestone dates established in the MCA. This understaffing was not surprising given the context: by July 2023, Meridian was already deeply behind schedule on Phase 2, its crews were stretched thin attempting to address ongoing Phase 2 rework requirements, and Meridian's financial condition — as later confirmed by Mr. Sandoval's deposition testimony — was under strain from Ridgepoint Capital Group LP's cost reduction directives.
The Phase 3 delays are attributable entirely to Meridian's inability to perform. The principal causes include the diversion of resources to attempt remediation of Phase 2 defects, the financial constraints imposed by Meridian's private equity sponsor, and organizational dysfunction that prevented Meridian from effectively scaling its operations to meet the demands of the largest phase of the project.
4.3.2 Impact on Overall Program
At the time of termination on April 1, 2024, the overall project status was as follows:
• Total route miles completed: approximately 9,140 of 18,500 (49.4%)
• Total contract value earned (per NFA's assessment): approximately $569.7 million of the $1.2 billion total Contract Price (47.5%)
• Remaining unperformed contract value: approximately $630.3 million
NFA engaged a replacement contractor, Crestline Construction Group Inc. ("Crestline"), on June 10, 2024, to complete the remaining scope of work. Crestline's contract price for the remaining scope is $712 million — an excess of $81.7 million over the original remaining MCA value of $630.3 million. The excess cost is attributable in part to the need for an accelerated construction schedule to recover lost time and in part to the need for Crestline to remediate certain of Meridian's defective Phase 2 work before proceeding with new construction in adjacent or overlapping areas. This excess completion cost of $81.7 million is a component of NFA's counterclaim damages.
V. Analysis of Meridian's Asserted Delay Excuses
Meridian has advanced several arguments in its pleadings and through its discovery positions to explain and justify the project delays. In this section, I address each of Meridian's principal delay defenses and provide my preliminary assessment of their validity and their impact — or lack thereof — on the critical path and overall delay allocation.
5.1 Owner Permitting Delays (MCA § 5.3)
Meridian contends that NFA failed to timely obtain certain municipal permits, which Meridian claims were the Owner's responsibility under MCA § 5.3, and that these alleged permitting failures caused significant delays to Meridian's construction activities.
My preliminary analysis of MCA § 5.3 reveals that the provision establishes a bifurcated permitting structure, allocating permitting responsibilities between the Owner and the Contractor as follows:
Owner's responsibility: State and federal right-of-way permits; highway crossing permits; railroad crossing permits; and certain utility relocation permits requiring coordination with state-regulated utilities.
Contractor's responsibility: Municipal street-opening permits; utility locate permits (one-call/811 coordination); local building and construction permits; and municipal traffic management permits.
The majority of the permits that Meridian has identified as delayed were municipal street-opening permits, utility locate permits, and local construction permits — all of which fall squarely within the Contractor's scope of responsibility under MCA § 5.3. Accordingly, to the extent these permits were delayed, the delays are Contractor-caused, not Owner-caused.
Some ambiguity exists with respect to three to four (3–4) county-level permits in Connecticut and western Massachusetts that do not fit neatly into either the "state/federal" or "municipal" categories. Further analysis of the MCA § 5.3 language and the specific permitting requirements of these counties is needed to resolve this ambiguity, and I expect that the outstanding municipal permitting authority subpoena responses will provide relevant information.
Even crediting Meridian's permitting argument at its maximum reasonable extent — that is, assuming all of the arguably Owner-responsible permits were in fact delayed and that those delays fell on the critical path — the permitting-related delays account for no more than fifteen to twenty-five (15–25) days of delay across all milestones. This represents a small fraction of the aggregate delay of 362 or more days experienced on the project and does not come close to explaining or justifying the massive schedule overruns.
5.2 Unformalized Change Orders (14 Alleged Scope Changes)
As discussed in Section IV.2.3 above, Meridian asserts that fourteen (14) Owner-directed scope changes were implemented during the course of the project but were never formalized as Change Orders in accordance with MCA § 16.1. Meridian contends that these unformalized scope changes caused delays and additional costs for which it should receive schedule relief and additional compensation.
My review of the correspondence, field directives, RFIs, and other documentation related to the fourteen alleged scope changes yields the following preliminary assessment:
• Five to six (5–6) items involve potentially legitimate scope modifications that may have had some schedule impact. These include the addition of access points at specified locations requested by NFA's network planning team, routing modifications directed by NFA to avoid newly constructed third-party facilities, and upgraded conduit specifications in certain high-traffic corridors. I estimate that the cumulative schedule impact of these items, if they are ultimately determined to constitute compensable scope changes, is approximately ten to twenty (10–20) days.
• Three to four (3–4) items are routine design clarifications or responses to Requests for Information submitted by Meridian. These items reflect the normal give-and-take of construction administration and do not constitute changes to the scope of work.
• Four to five (4–5) items are field-level adjustments that were initiated by Meridian's own field crews — for example, minor route adjustments to avoid unforeseen underground utilities or adjustments to vault locations for constructability — and were subsequently characterized by Meridian as Owner-directed changes. The contemporaneous field records and correspondence do not support Meridian's characterization of these items.
Regarding the procedural requirements of MCA § 16.1, my preliminary review indicates that Meridian did not submit timely Change Order Requests for most of the fourteen alleged items. Section 16.1 requires that the Contractor submit a Change Order Request within fifteen (15) business days of becoming aware of a condition warranting a change, and that the failure to submit a timely request constitutes a waiver. The question of whether Meridian's failure to comply with this procedural requirement precludes its change order claims is a legal issue for counsel to address; from a schedule analysis perspective, however, I note that Meridian's failure to submit contemporaneous Change Order Requests deprives the schedule analysis of the kind of real-time documentation that would ordinarily substantiate a scope change claim and its schedule impact.
Even assuming, arguendo, that all fourteen items were legitimate scope changes with schedule impact, the cumulative schedule impact would not exceed twenty-five to thirty-five (25–35) days. This is dwarfed by the more than three hundred (300) days of Contractor-caused delay that I have identified across the delayed milestones.
5.3 Force Majeure (COVID-19 Aftereffects)
Meridian invokes COVID-19 aftereffects — specifically, purported disruptions to the construction labor supply and the fiber cable supply chain — as a force majeure defense for its schedule delays.
The COVID-19 pandemic began in approximately March 2020, coinciding closely with the execution of the MCA (March 15, 2020) and the issuance of the NTP (April 1, 2020). The pandemic unquestionably caused significant disruptions to the construction industry, including labor shortages, supply chain delays, and regulatory restrictions on construction activities. However, the relevant question for purposes of this analysis is not whether COVID-19 caused disruptions to the construction industry in general, but whether COVID-19 aftereffects were a material cause of the specific delays experienced on this project, during the specific time periods in which those delays occurred.
My analysis of this issue yields the following findings:
Phase 1 Delays (Milestone 3, August – October 2021). The Phase 1 Milestone 3 delay partially overlapped with the period of lingering supply chain disruptions from the pandemic. However, as discussed in Section IV.1.2 above, the crew shortages at the specific Phase 1 sites appear to have been a Meridian-specific staffing issue — attributable to Meridian's internal management and compensation practices — rather than an industry-wide labor shortage caused by COVID-19. The evidence does not support a conclusion that the Milestone 3 delay was caused by COVID-19 aftereffects.
Phase 2 Delays (October 2021 – April 2024). The Phase 2 delays, which constitute the vast majority of the aggregate delay on the project, occurred over a period spanning approximately eighteen months to four years after the onset of the pandemic. By this time, industry data from the Bureau of Labor Statistics, the Associated General Contractors of America, and other authoritative sources demonstrates that the construction labor market had substantially recovered from the pandemic's effects. Construction employment nationwide returned to pre-pandemic levels by approximately mid-2022, and fiber cable supply chain lead times returned to pre-pandemic norms by approximately the same date.
Marcus Henley's deposition testimony is directly relevant to this point. Mr. Henley, as Meridian's Vice President of Field Operations, was the individual most directly responsible for crew deployment and labor management. During his deposition on December 3–4, 2024, Mr. Henley acknowledged that Meridian's Phase 2 crew shortages were attributable to Meridian's difficulty retaining experienced workers because of compensation issues, not to COVID-19-related labor unavailability. This candid admission from Meridian's own witness substantially undermines the force majeure defense.
Supply Chain Data. Fiber cable lead times, which experienced significant elongati