A federal jury in Montana last month ordered ExxonMobil to pay AECOM $64 million in money owed on a disputed refinery turnaround project in Billings in 2019 that went badly and lasted months instead of the scheduled weeks. The jurors blamed both companies for failing to meet their contract terms, ordering AECOM to pay Exxon $20 million—reducing the overall damage award to the professional services firm from the oil and gas giant to $44 million.

But If a judge grants AECOM's request, that amount could more than double.

AECOM hopes to win and has asked federal district court judge Susan Watters in Billings to award it tens of millions more in interest for the years since the work was done, a hefty portion of which is based on a state prompt-pay law.

The jury verdict and damage award represent the second significant court win in recent months for AECOM and its attorneys at law firm Polsinelli PC. A federal judge in Denver had granted the Los Angeles-based firm $14.2 million in court costs in addition to a $5-million damage award from its former design-build teammate Flatiron, related to a highway project in Denver that finished work above its estimate.

The time for appeal of that final decision has passed.

The jury award and request for total damages on the ExxonMobil refinery maintenance turnaround, in the Montana federal court, still may be appealed or reduced by the judge. For the turnaround at the refinery that Exxon owned at the time, and has since sold, the energy firm hired AECOM Energy & Construction Inc. in 2017 to provide technical and engineering services for $41 million. 

ExxonMobil paid AECOM that amount, but the two companies disputed what went wrong and AECOM demanded additional pay.

ExxonMobil contended that AECOM failed to have enough qualified workers to do the work on time at the required quality level. The owner also alleged that 15% of all welds made originally during the work were substandard, contending that and other failures amounted to negligence and misconduct. For claimed total economic losses, ExxonMobil sought $93 million in damages.

ExxonMobil was not without fault, Judge Watters wrote in her pre-trial memo of agreed facts. It missed the final design drawing deadline by nearly one year. AECOM also accused the owner of changing the scope regularly during the project. ExxonMobil directed AECOM to perform additional work but refused to pay for it, the professional services firm claimed.

In its Feb. 1 verdict following a trial, the Billings jury found that both AECOM and ExxonMobil had breached their contract. But the jurors' award to AECOM, $64 million, exceeded Exxon's award, $20 million, by $44 million.

The jury also decided that ExxonMobil had violated the state's prompt-pay act that requires payment of invoiced work in three weeks unless the invoice is disputed. AECOM claims, in its attorneys memo to the judge, that another $8 million is due to the firm under the law.

Exxon's Final Payment

In an interesting twist, AECOM claims that ExxonMobil should pay prejudgment interest, as required by Montana law, on the combined award amounts that total $64 million.

Eleven states do not award prejudgment interest as a matter of right or law, and another 12 make it discretionary, according to the construction law committee of the International Association of Defense Counsel.

At 10.5% interest, dictated by state law, AECOM is entitled to another $45 million, the company argues, for all the money "that ExxonMobil should have paid six years ago."

On the amount of the damage award covered by the state's prompt-pay act—$8 million—state law applies a separate 18% interest rate. AECOM calculates that ExxonMobil should pay an additional $8.6 million in interest accrued on that amount over the years.

That would bring the total amount owed to AECOM by the owner—which is the jury award plus all interest—to $112 million.

Legal experts point out, however, that AECOM still owes $20 million under the prompt-pay law and could conceivably be subject to interest as well, with that amount potentially offsetting a part of what ExxonMobil owes it.