INTEROFFICE MEMORANDUM
To:
Lina Swan, Director of Fiscal Operations
From:
Stephen H. Clark, Administrative Law Judge
Date:
September 29, 2005
Re:
Demand For Direct Payment
----------------------------------------------------------Claimant:
Aggregate Industries (Aggregate)
Contractor: Roads Corporation (Roads)
Contract:
MHD #32082
City/Town: Interstate 495
Amount:
$804,63.99
1. Aggregate filed this direct payment demand (Demand) on September 7, 2005
through a letter dated September 6, 2005 pursuant to G.L.c.30, s.39F (Section
39F). The Demand is properly sworn under pains and penalties of perjury and
was sent to the Department by certified mail with a copy to Roads, also by
certified mail.
2. Aggregate’s Demand states that it is “a materialman entitled the protection [sic] of
M.G.L. Ch. 30, s.39F.” “Subcontractor” is defined for purposes of Section 39F
with respect to general contracts with the commonwealth not awarded under G.L.
c. 149, s.44A to 44H as a “person contracting with the general contractor to
supply materials used or employed in a public works project for a price in excess
of five thousand dollars.” Section 39F(3)(iii).
3. Section 30F(1)(d) requires that a subcontractor’s demand contain “a statement of
the status of completion of the subcontract work.” The Demand states that
Aggregate’s “portion of the project is complete” but does not expressly state a
date of substantial completion. The date of completion is material since Section
39F(1)(d) provides in substance that the right to make a direct payment demand
does not accrue until 70 days after the subcontractor has “substantially completed
the subcontract work.” Here, the date of the last invoice is August 26, 2005. See
invoice #4529316. Based on a “substantial completion” date of August 26, 2005,
it is plain that Aggregate’s September 9, 2005 Demand was filed before 70 days
had elapsed since substantial completion.
4. Section 39F(1)(d) requires that a subcontractor’s “demand shall contain a detailed
breakdown of the balance due under the subcontract.” The Demand here states
“Asphalt and stone provided on a unit cost basis and a liquid asphalt escalation
charge.” The Demand further states: “The nature of the materials provided by
Aggregate Industries to Roads Corporation for the project located at I-495,
Mansfield to Franklin, is detailed on the attached schedule.” (Emphasis supplied.)
The attached schedule, which is not sworn and which is not expressly
incorporated by reference into the sworn Demand, consists of a list of 67
numbered invoices, for example
MATERIAL
INVOICE #
ORIG. DATE
OPEN AMOUNT
MATERIAL
4514448
4514449
07/25/05
07/25/05
$29,287.79
$ 2,339.96
ASPHALT
STONE
5. The schedule of 67 invoices is offered in the Demand to show the “nature” of the
materials provided. Neither the schedule nor anything else in the Demand states
the terms of the subcontract, the payment item(s) in Roads’s general contract to
which the Demand refers, the unit prices bid in the general contract, the quantities
of material supplied by the subcontractor or the amount (or calculation) of the
“liquid asphalt escalation charge,” if any.
6. The schedule in the Demand also includes category titled “ESCALATION” under
which one invoice (#273355) is listed as an “open amount” of $30,548.94. There
is no reference to a payment item in the general contract (or any unit price
therein) for “escalation.” There is no written statement in the Demand that
explains the $30,548.94 demanded or the basis on which the Department may pay
that sum to Aggregate.
7. The Demand does not contain a balance due under the subcontract that is derived
from the financial data of the general contract or subcontract. The Demand is a
list of 67 “open invoices” totaling $804,634.99.
8. Roads filed a sworn reply to the Demand (Reply) on September 20, 2005. See
Section 39F(1)(d). The Reply states that Roads has paid Aggregate for
168,505.22 megagrams of bituminous concrete but the Reply does not specify the
sums paid Aggregate nor which of Aggregate’s invoices it paid. The Reply also
states Aggregate is requesting payment for which materials Roads itself has yet to
be “reimbursed” by the Department. Roads’s Reply agrees that the paving work
“has been substantially completed” but like Aggregate does not specify a date.
The Reply states that “Roads accounting with Aggregate Industries will be fully
reconciled upon payment to Roads by MassHighway for the remaining
bituminous concrete products delivered to the project.”
9. The Demand fails to meet the requirements of Section 39F. It failed to provide a
detailed statement of the balance due under the subcontract. The Demand was
filed prematurely.
10. Kindly take no further action on this Demand.
cc:
Aggregate Industries
Northeast Region, Inc.
1715 Broadway
Saugus, MA 01906
The Roads Corporation
241 Treble Cove Road
North Billerica, MA 01852
District Highway Director, District 5
Chief Engineer
Commissioner