,,
COMMONWEALTH OF MASSACHUSEITS
MASSACHUSEITS IllGHWAY DEPARTMENT
BOARD OF CONTRACT APPEALS
DATE:
April 28, 2004, Item #2'
CLAIM:
Bardon Trimaunt, Inc .., aggrieved by the Massachusetts
Highway Department's denial of its claim opposing the
deduction of quantities taken during the finals review and
failure to pay interest on 5 alleged late periodic payments
appealed to Board of Contract Appeals.
RECOMMENDATION:
The claim of Bardon Trimaunt, Inc.'s under Contract No.
93174 for deduction in quantities should be approved in the
amount of $1,449.00 and the claim for late periodic
payments in the amount afS4,713.32 should be dertied.
FOR DEPARTMENT SECRETARY
Item # -3..---------------------------------------------------­
___~ilJU_9A_______________________________________ '
Date
The Board accepted the ~ecomrnendations
Claim for deduction in quantities Approved.
Claim for late periodic payments Denied.
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SECRETARY, MASS. HIGHWP.Y COMM.
'MASS HIGHWAYDEPARn~ENT
c omn';or.wealth ofMassachu setts
In Contract # 93174 Bardon Trimount, Inc. (Bardon)1, disputes the deduction by
the finals engineer of the Massachusetts Highway Department (MHD or Department) of
63 tons of pavement from Item #460.1 with a value of $1,449.00 in the final estimate and
further disputes the refusal of the Department to pay interest of $4,713.32 on five (5)
alleged late periodic payments.
I find that Bardon’s appeal from the Department’s determination of the quantity
dispute of 63 tons has merit and that the Department should not deduct $1,449.00 from
the Department’s final estimate. I also find that the Department does not owe interest for
late payment on any of the 5 periodic estimates at issue. Under the Contract no payments
were “due” from the Department until Bardon submitted equal employment opportunity
forms required by law. Where the Department paid periodic estimates within 35 days of
the date on which the Department certified that Bardon had belatedly submitted the
required forms, no interest was due.
STATEMENT OF THE CASE
Bardon appeals to the Board directly from the determinations of the finals
engineer and filed this appeal on April 15, 2002. The appeal was heard on September
11,2003. There is a tape recording of the hearing. Present were
John McDonnell
Isaac Machado
Paul Sullivan
Mary Bearse
Greg MacKenzie
Acting Chief Administrative Law Judge
Deputy Chief Counsel, MHD
Final Engineer, MHD
Fiscal Management, MHD
Bardon
The following exhibits were entered in evidence:
Ex#1
Ex#2
Ex#3
1
Bardon’s Statement of Claim
Notice of Hearing
MHD Contract No. 93174
Bardon is now doing business as Aggregate Industries, Inc.
Ex#4
Ex#5
Ex#6
Quantity Control Sheet for Item No. 460.1
Final Engineer’s Tally Sheet for Item No. 460.1
Contract Quantity Estimate Sheets Nos. 4, 5, 6, 24, and 27.
The hearing officer requested additional documentation for the record at the
conclusion of the hearing. The Department supplemented Ex. #6 by supplying Bardon
and the hearing officer with Quantity Estimate Sheets Nos. 5, 6, 24 and 27. The
Department also supplemented the record by submitting a six page Standard Operating
Procedure titled “Contract Quantity Estimate.” Bardon did not make a post hearing
submission. The report and recommendation was written by the undersigned with the
participation of Mr. McDonnell, who heard the appeal.
FINDINGS OF FACT
Substantial evidence on the record, consisting of tape recorded testimony and
documents, supports the following findings of fact, which I recommend the Board adopt.
1.
Bardon is the contractor on MHD contract No. 93174 for work to
resurface a section of Interstate Route 395, interchange ramps, and
associated work, in Oxford and Auburn (Contract).
2.
The Contract was entered into on September 17, 1992 with an original
completion date of October 15, 1994. The Contract bid price was
$3,551,018.00. The Notice to Proceed issued September 21, 1992.
3.
The Contract work was completed on or before November 11, 1994, the
date approved by the Department for extended completion.
4.
The Contract included by reference, among other things, the Plans, the
Special Provisions; the Standard Specifications for Highways and Bridges
(1988 ed.) (Standard Specifications), the Supplemental Specifications
2
(August 7, 1991); the Required Contract Provisions, Federal-Aid
Construction Contracts; 41 Code Of Federal Regulations 60-1 et seq. (41
CFR 60); the Standard Federal Equal Opportunity Contract
Specifications; and the Commonwealth of Massachusetts Supplemental
Equal Employment Opportunity Anti-Discrimination and Affirmative
Action Program.
5.
Subsection 9.05 of the Standard Specifications, entitled “Final Acceptance
and Final Payment,” provides in pertinent part
All prior partial estimates and payments shall be subject to
correction in the final estimate and payment.
6.
The Department’s finals review engineer checked the quantities of
materials associated with the pay items and reviewed all prior partial
estimates and payments in the Contract.
7.
The Department prepared the Final Estimate on February 24, 1999.
8.
On December 5, 2000 the Department sent Bardon the First Final Estimate
Notice.
9.
On January 8, 2002 the Department sent to Bardon The Fourth and Final
Estimate Notice, which indicated, among other things, that the department
deducted payment for 63 tons of concrete with a Contract value of
$1,449.00.
10.
On May 1, 2002 Bardon filed its Statement of Claim.
3
The Quantity Dispute
11.
Item 460.1 of the Special Provisions provides that a certain estimated
quantity of class I bituminous concrete pavement type I-1 be used on the
project.
12.
Bardon calculated that it had supplied 37,593 tons of Item 460.1
bituminous concrete.
13.
The Department’s finals engineer calculated that Bardon had supplied
37,530 tons of Item 460.1 concrete.
14.
The amount in dispute between the Department’s finals engineer and
Bardon was 63 tons.
15.
The Department’s resident engineer erroneously wrote the number
“1,218” tons when attempting to transcribe the number 1,281 from one
column to another for Item 460.1 on the final estimate work sheet
submitted to the finals engineer. Ex. #4 line 9.
16.
The quantity dispute of 63 tons for Item 460.1 is wholly explained by the
transcription error by the Department’s resident engineer.
17.
The transcription error of 63 tons resulted in a proposed reduction in
payment under Item 460.1 of $1,449.00 (63 tons times $23/ton).
The Interest Dispute
18.
The Department refused to pay five periodic payment estimates submitted
by Bardon because forms showing Bardon’s compliance with nondiscrimination provisions of federal and state law were not timely
submitted.
4
19.
G.L. c. 30, s.39G requires that the Contract contain Subsection 7.15 in the
Standard Specifications.
20.
Subsection 7.15 of the Standard Specifications provides, in pertinent part
The awarding authority shall pay the amount due pursuant to any
periodic, substantial completion or final estimate within thirty-five
days after receipt of written acceptance of such estimate from the
contractor and shall pay interest on the amount due pursuant to
such estimate at the rate hereinabove provided from that thirty-fifth
day to the date of payment. [Retainage may be withheld from such
payments.]
21.
Subsection 9.04 of the Standard Specifications provides, in pertinent part
The [Department] shall pay biweekly to the Contractor while
carrying on the work the balance not retained as hereinbefore
provided. No such estimates or payment shall be required to be
made when, in the Engineer’s judgment, the work is not
proceeding in accordance with the provisions of the Contract….
21.
Subsection 1.44 defines the term “work” used in the Standard
Specifications and provides in pertinent part
Work shall mean the furnishing of all labor, materials, equipment
and other incidentals necessary for or convenient to the successful
completion of the project and the carrying out of all the duties and
obligations imposed by the Contract. Work shall include in addition
to work to be performed on the project location in the actual
construction process, necessary shop plans, computations, ordering
of materials and equipment, fabrication of material, parts and
components, etc.”
22. The Contract contains eight pages of “Required Contract Provisions FederalAid Construction Contracts,” of which Section II, “Nondiscrimination,”
incorporates by reference the Equal Employment Opportunity Affirmative
Action Construction Contract Specifications set forth in 41 CFR 60-4.3 (EEO
Specifications).
5
23. The EEO Specifications require Bardon to “not discriminate on the grounds of
race, color, sex or national origin in the selection and retention of
subcontractors, including procurement of material and leases of equipment.”
Section II (4).
24. The EEO Specifications require Bardon to comply with 41 CFR Part 60,
Section II (3)(d), to “furnish all information and reports required by Executive
Order 11246, Section II (3)(e).”
25. EEO Specifications Section II (4)(b) provides in pertinent part (emphasis
added)
In the event of the contractor’s noncompliance with
nondiscrimination provision of this Section II, paragraph 4, this
contract may be subject to sanctions, including but not limited to
the withholding of payment to the contractor under the contract
until the contractor complies and/or cancellation, termination or
suspension of the contract in whole or in part.
26. The Standard Operating Procedure (SOP) of the Department with respect to
the preparation of Contract Quantity Estimates provides, in pertinent part
If any document required under the contract has not been received
within the time limit for each document …. The Resident Engineer
shall enter the following statement in the bottom margin of the first
part of the Contract Quantity Estimate prior to submission to the
Contractor’s authorized representative: Approval withheld until
[blank space for date] when the Contractor submitted the [list
missing documentation].
27. Contract Quantity Estimate No. 4 (CQE 4) was signed by Bardon and
submitted to the Department’s resident engineer for approval on 5/20/93.
CQE 4 has on its face this notation: “Approval withheld until 6-21-93 when
contractor and subcontractor submit required EEO Forms. See Attached
List.” Said attached list is contained on a form dated 5-19-93 which says:
6
“The following reports are due immediately”: [1] “Bardon Trimount” and
[subcontractor] “Swank” “Projected manning tables April-June”; [2] Monthly
Utilization 257 “Bardon Oct, Nov. Dec. April” and “Swank Oct. Nov.”; [3]
“Bardon Biweekly training Rpt.”; and [4] “Bardon trainee reports 1409 semi
annual.” [Original emphasis.]
28. Contract Quantity Estimates (CQE’s) numbered 5, 6, 24 and 27 have on their
face notations made by the resident engineer showing that the Department [1]
has withheld approval of the CQE until a date certain [2] after “contractor and
subcontractor submit required EEO Forms. See Attached List.”
29. Late payment interest, in the amount of $8,675.39 for CQE #26 was paid on
CQE #27. CQE #27 shows that Bardon signed the same on 2/17/95 but the
resident engineer annotated that he “received back from contractor on
7/26/95.”
32. Following MHD’s receipt of required EEO Forms, CQE’s 4, 5, 6, 24 and 27
were approved and paid by the Department on the following dates, within the
number of days shown after the CQE had been approved by the Department:
Estimate No.
4
5
6
24
26
27
Day MHD Approved Date of Check
6/21/93
7/16/93
7/6/93
7/23/93
7/6/93
7/30/93
10/12/94
10/28/94
Interest paid on CQE #27 in amount of $8,675.39
8/4/95
8/24/95
Number Days
27
17
24
16
20
32. With respect to CQE’s 4, 5, 6, 24 and 27, in each instance the Department
paid the full amount due within 35 days after it approved the CEQ.
7
DISCUSSION
A.
The Quantity Dispute
Bardon appeals the Department’s deduction of 63 tons from Item 460.1 by
the finals engineer. The record shows without doubt that the origin of the
Department’s 63-ton quantity deduction was in a simple transcription error in the
resident engineer’s worksheet, which error was carried forward throughout the
final estimate process.
Where clear and convincing evidence shows that clerical error is the
genesis of the dispute, the error should be corrected and appeal resolved. I find
that Bardon’s appeal has merit. The Department should not deduct from retainage
$1,449.00 (63 tones at $23.00/ton) in the final estimate, which sum should be
released.
B.
The Claim For Interest For Late Payment
The Contract specifies that biweekly payments to the contractor carrying
on the work “shall [not] be required to be made when, in the Engineer’s judgment,
the work is not proceeding in accordance with the provisions of the Contract.”
See Standard Specifications, Subsection 9.04. The word “work” is defined in the
Contract to include “the carrying out of all the duties and obligations imposed by
the Contract as well as the “furnishing of all labor, materials and equipment.” Id.,
Subsection 1.44.
Bardon has the burden to show it was in compliance with all its duties and
obligations under the Contract. One such contractual duty was the timely
submission of forms to show that it and its subcontractor were in compliance with
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express federal and state equal employment opportunity (EEO) regulations. It is
undisputed that Bardon failed to submit certain federally mandated forms at
various times in 1993, 1994 and 1995, as shown on the face of CQE’s numbered
4, 5, 6, 24 & 27. Each of those CQE’s is plainly marked that “required EEO
forms” are missing. Each CQE states a date certain when the periodic payment
will be approved for payment if the missing forms are supplied.
The EEO forms that Bardon failed to timely supply were required by law
and by the Contract. See Equal Employment Opportunity Affirmative Action
Construction Contract Specifications (Federal Specifications) and 41 CFR 60-4.3.
The Federal Specifications themselves provide for the withholding of payment to
a contractor not in compliance in certain circumstances.
The resident engineer followed the Department’s Standard Operating
Procedure (SOP) governing the completion and payment of Contract Quantity
Estimates. The relevant SOP provides: “If any document required under the
contract has not been received … the Resident Engineer shall enter the following
statement: …. Approval withheld until [blank space for date] when the Contractor
submitted the [list missing documentation].”
The Department is expressly permitted to withhold periodic payments
under the Contract. Because Bardon was not in compliance with the Contract, as
expressly noted on the face of the each periodic estimate at issue, the sums
otherwise approved by the Department and Bardon never became an “amount due
… pursuant to such [periodic] estimate” under Subsection 7.15.
9
Payment under CQE’s 4, 5, 6, 24 and 27 became due when Bardon cured
its non-compliance. Bardon did in fact eventually submit the required EEO forms
to the Department, as evidenced by the date the district highway director
approved each CQE. The Department then paid the amount of the periodic
payment estimate due Bardon within 35 days of that approval. Because payment
was made within 35 days of the date of such approval, the Department owes no
interest.
Bardon’s contention that interest runs from the day Bardon itself approved
the CQE’s without qualification is not correct. The Contract does not require
periodic payments be made to Bardon while it was admittedly in non-compliance
with federal and state law. To the contrary, the Contract expressly gives the
engineer the authority to suspend payments in circumstances where B&E fails to
meet its duties and obligations. The Department’s obligation to pay Bardon only
arises after the engineer confirmed that Bardon had brought itself into
compliance. Hence, the date when the Department “received” Bardon’s CQE’s
could not commence the 35 day period for the Department to make the periodic
payments. Rather, the time period begins on the date on which the engineer
certified compliance.
FINDINGS
I find that a transcription error was the cause of the Department’s erroneous
deduction of $1,449.00 from the final payment estimate. I further find that the
Department owes no statutory interest in the circumstances presented.
10
RECOMMENDATION
The Board should adopt the findings of fact set forth. The Board should order $1,449.00 be restored to the final payment owed Bardon. The Board should deny Bardon’s claim for interest. Respectfully submitted,
Stephen H. Clark
Chief Administrative Law Judge
11