To:
Secretary Daniel A. Grabauskas, EOT Through:
Commissioner John Cogliano, MHD
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From:
Stephen H. Clark, Administrative Law JUdge)lt ~
Date: January 20, 2005
Re:
Report and Recommendation
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I am pleased to submit for your consideration and approval the attached report
and recommendation.
HNTB, a consultant that designed the Brightman Street Bridge
in Fall River undcr MHD contract #92607, appealed on
October 4,1999 seeking $717,460.00 in funds "to cover labor
escalation costs." The appeal should be dismissed because it is
moot. Subsequent tu its appeal HNTB and the Department at
various times between 2000 and 2004 modified the Contract.
Among such modifications were increases to the Contract of
approximately $292,000.00. Such increases to the Contract
supersede HNTB's appeal. Because the subject matter of the
appeal was addressed in subsequen t contract modifications,
approved by both HNTB and the Department, the appeal has
been rendered moot and should be dismissed.
Massachusetts Highway Department· Ten Park Plaza, Boston, MA 02116-3973 · (617) 973-7800
INTRODUCTION
HNTB, a consultant responsible for the design of the Brightman Street Bridge in
Fall River-Somerset under MHD contract #92607 (Contract), appealed to this office on
October 4, 1999 seeking $717,460.00 “for additional funds [to be added to the existing
contract] to cover the escalation in labor costs.” HNTB appealed after the Department
decided in 1999 that it would not make a cost escalation adjustment to the Contract.
Subsequently, between 2000 and 2004, the Department and HNTB agreed to several
Contract modifications, including requests for extra costs. Accordingly, this appeal is
moot and should be dismissed.
BACKGROUND
At the time it appealed HNTB had since 1992 been under Contract to design a
replacement for the Brightman Street Bridge in Fall River. The Contract permitted (but
did not require) the parties to renegotiate the contract fee if there was an approved
extension of time for more than one year beyond the “specified time period” of
performance. In 1998, the year before this appeal, the Department and HNTB had agreed
to a $500,000 cost escalation adjustment and a contract increase of $200,000 for added
work after the Contract term had been extended. When HNTB appealed the maximum
contingent obligation under the Contract was $6,385,000.00. Statement of Claim, Ex. 10.
HNTB styled this appeal as a “ non-adversarial claim” to obtain additional funds
“to accommodate cost escalation due to [project] extensions.” On January 13, 2000,
Judge Milano held a conference with representatives of both the Department and HNTB.1
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The undersigned replaced Judge Milano on March 1, 2004 and makes this report and recommendation to
the Commissioner of the Department pursuant to St. 2004, c. 196, s. 5.
Thereafter, on January 25, 2000, HNTB requested the Department to make a
transfer of funds and certain internal budget reallocations within the Contract totaling
$185,986.00. The Department agreed to both requests, which the Board of
Commissioners (Board) approved on April 19, 2000. Between 2000 and 2004 the
Department approved further increases in the total contingent cost of the Contract. By
August 19, 2004 the total value of the work done had risen to $6,677,067.90. The
Contract is active in fiscal year 2005. The Department’s most recent payment (for
$16,102.22) was approved on September 29, 2004.
Neither HNTB nor the Department took any action at the office of the
Administrative Law Judge following the conference of January 13, 2000.
DISCUSSION
HNTB’s appeal was not from a final decision of the Department. Rather, its
appeal was apparently made in the context of on-going negotiations. Those negotiations
were partially successful since the Board approved the reallocation of existing Contract
funds on April 19, 2000. Thereafter, between 2000 and 2004, HNTB and the Department
reached additional agreements by which the Contract amount of $6,385,000.00 (at the
time of the appeal) increased by approximately $292,000.00 to $6,677,067.90 (by August
19, 2004).
CONCLUSION AND RECOMMENDATION
There is no doubt that HNTB’s 1999 appeal is no longer the subject of any
present controversy. If HNTB filed a justiciable appeal in this office in 1999, a
proposition subject to considerable doubt, that appeal is now moot. The subject matter of
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HNTB’s 1999 appeal has been entirely overtaken by events, as the Department’s
subsequent reallocations and additions to the Contract show.
I conclude that the appeal is moot and that for that reason should be dismissed.
Respectfully submitted,
Stephen H. Clark
Administrative Law Judge
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