Ahhh, the Revel Casino on a foggy morning last summer before the steel podium was higher than the second level, before the two concrete hotel towers were able to be seen from 100 miles out to sea, and of course before Revel Entertainment was slowing and possibly halting construction on a sea-side project that was initially tagged at $2 billion.
I worked for the steel fabrication and erection contractor for this job (we kicked ass by the way), and it was probably the most difficult project with which I have ever been associated. Not only was it a very complicated and enormous steel design (over 26,000 tons), but the ownership and management of the project did nothing to make things any easier.
The contract was structured on a unit price per ton of steel billing schedule, however the unit prices varied among different types of steel sections. For example, a curved tube section on the exterior of the building was more expensive than a typical wide-flange section on the interior of the building. This seems relatively straightforward right? Well, I took three dimensional calculus classes that were more straightforward than this one.
The hope in a unit price contract is to reduce or eliminate change orders all together because additions to scope are automatically added to your contract. So no change orders right? Wrong.
Of course drawings were not nearly complete upon commencement of the job so when changes were issued they often affected steel that was already detailed and possibly already bought. This work and material was rendered useless since it was no longer part of the project and in order to get paid for it we needed a change order. I think you'd have a better chance of hitting the $2 million jackpot on a nickel slot machine than getting change orders from Revel Entertainment.
From what I've heard from the older folk in the business, casino owners are some of the toughest out there. Casinos have historically been very profitable (up until now) and the amount of money lost for one day of schedule extension can quickly approach the millions.
Contractors are beat with a rubber stick to perform faster and at a lower cost - it's really a brutal game.Nonetheless, the steel went up, the change order log kept growing, Revel hit the brakes on the project resulting in lay offs of half the workers (myself included), and Morgan Stanley (partner with Revel Entertainment) after changing to a bank holding company received debt relief.
When all the fog clears, we will undoubtedly have an impressive beach-front casino in Atlantic City.
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