STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
GUIN & HUNT, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 77-1400BID
) STATE OF FLORIDA, DEPARTMENT ) OF GENERAL SERVICES, )
)
Respondent. )
)
RECOMMENDED ORDER
This matter came on for final hearing before Michael I. Schwartz, a hearing examiner appointed pursuant to a letter from the Executive Director, State of Florida, Department of General Services, dated November 1, 1974. The final hearing was held on January 20-23, 1976, in Orlando, on February 11-13, and March 15-18, 1976, in Tallahassee. The hearing examiner entered what is styled a "Recommended Order" on April 26, 1977. The hearing examiner recommended that the Petitioner, Guin & Hunt, be awarded a total of $48,370.51 on eight of its claims and be denied an award on the remainder.
The "Recommended Order" of the hearing examiner was presented to the Governor and Cabinet, sitting as the Department of General Services, with the recommendation from the Executive Director of the Department of General Services that it be accepted as the final order in this matter. The Petitioner, Guin & Hunt, took exception to parts of the "Recommended Order" and by those exceptions seeks a recovery significantly in excess of that recommended by the hearing examiner. The Governor and Cabinet then directed that the matter be refereed to the Division of Administrative Hearings for further consideration and for the entry of further Findings of Fact, Conclusions of Law and Recommendations.
These Findings of Fact, Conclusions of Law, and Recommendations are the response to that referral. In entering this Recommendation the undersigned Hearing Officer has read and considered the eleven volumes of transcripts of the final hearing, together with all exhibits thereto. Further, counsel for the parties have filed briefs in support of their respective positions which briefs have been considered by the Hearing Officer.
It does not appear from the record that this proceeding was conducted in accordance with the Administrative Procedure Act, Chapter 120, Florida Statutes.
FINDINGS OF FACT
In Claims Nos. 1, 12, 19 and 20 Petitioner seeks damages from the Department of General Services (hereinafer the "Department") for alleged job progress delays caused by the Department or its contractors. The hearing examiner in the original "Recommended Order" found that the Petitioner failed to ". . .establish a prima facie case justifying an award of monies in respect to the claim which he makes." The Petitioner took exception to this finding of the hearing examiner. A review of the record indicates that the Petitioner did
establish the following facts from which it is concluded that contrary to the hearing examiner's finding, the Petitioner is entitled to recover damages in the amounts stated.
On February 19, 1973, the Department of General Services advertised its formal invitation for bids for the "general contract" for the Humanities and Fine Arts Building, including the Rehearsal Building, at Florida Technological University, Project N. BR-3401-A. It is the performance of this general contract which is at issue in this proceeding. The bid-letting on this contract was held on March 21, 1973. The Petitioner's bid was $1,653,000.00, slightly below the next highest bidder. Because that bid exceeded the Architect's estimate, certain revisions to the specifications were negotiated, which revisions are reflected by Addendum No. 4 issued April 25, 1973, and the Petitioner's price was modified downward to $1,553,088.00. The contract was approved by the Department on May 1, 1973 and executed by the Department and the Petitioner on May 17, 1973. Notice to Proceed was issued to the Petitioner on June 5, 1973, with the contract requiring that their work be performed in 330 calendar days.
The construction concept of the Humanities and Fine Arts Building was a pilot project, experimental in nature, for the Department to test the so-called "fast track" or "systems method" of construction for an education institution. This was the first such project ever undertaken by the Department. The project was not a traditional one wherein a general contractor contracts with the owner to perform all the work of the project and then hires subcontractors to assist in performing his contractual responsibilities. For this project the Department contracted separately and independently for each element of the project. For example, the Department contracted individually with one contractor to prepare the foundation and with another to erect the steel structure. Indeed, the Department contracted separately and individually with the several major interior-trades, as well as with a "general contractor". The Department entered into these other, separate contracts before it entered into a contract with the Petitioner. Thus, on this project, the "general contractor" was not responsible for the hiring and conduct of various contractors in the traditional manner of a general contractor. These various contractors are, for this project, referred to by the Department as "subsystems contracts would not be assigned by the Department to the general contractor, whereupon the relationship of the general contractor to the subsystems contractors would be that of separate and independent contractors, each bound separately and independently to the Department. Although the original intent and design of this project was that the first alternative would be chosen and the subsystems contractors assigned to the general, who would then bear the responsibility of their management, that alternative was not chosen. Rather, the second alternative was chosen wherein the subsystems contracts were not assigned to the general, and each contractor maintained an independent and separate status one to another.
Such a situation involving "separate contractors" was a new experience for the Department. Previously the Department had always looked to a single contractor, the general contractor, to have overall control of the various subcontractors for the purpose of providing construction management. Here, for the major components of the project, there were no subcontractors contractually bound to a general contractor for construction management.
The architectural firm which designed the project for the Department, Rowe-Paras Associates, was dissolved about the time the bid invitations were issued to general contractors for the project. Two groups emerged from the original architectural firm, each requesting that it be chosen to continue and
finish the project. In late May, 1973, the Department selected Paras Associates, rather than Rowe-Holmes Associates, as the project architect to complete the project. It appears from the record that one or more architects who had a significant role in the development of this project, including the writing of its specifications, particularly the non-technical specifications, did not join Paras Associates. Therefore, as the project was being implemented, certain of those persons significantly involved in its development ceased to play a part in the projects's implementation except by their absence.
This project was designed by the architects with the explicitly intention that before the general contractor came on the job, the foundation and structural steel would be substantially in place. The contract to construct the structural steel was awarded to Romac Steel Company (hereinafter referred to as "Romac"). Romac's contract called for substantial completion of construction of the structural steel within ninety (90) days from its Notice to Proceed. The project was designed so that after the substantial completion by Romac of the structural steel work, the general contractor would come on-site and, within 330 days from its Notice to Proceed, construct the masonry and other items within the general contract. Roof deck and insulation, roofing and flashing, heating, ventilation and air conditioning, lighting and interior partitions, carpet, and elevators were all to be constructed by separate contractors not bound contractually in any way or otherwise related to the general contractor.
Although the project was designed so that Romac would substantially complete the erection of the structural steel before the general contractor was given a Notice to Proceed, the exact opposite actually occurred. Even though Romac had been awarded its contract approximately twelve months previously, the Department decided not to issue Romac its Notice to Proceed until the general contract had been awarded. This was apparently done for the benefit of the State so that the Department would know what the general contractor's price would be, and thereby maintain flexibility in staying within the budgeted funds for the project. Apparently for that reason, the Department, rather than issuing Romac a Notice to Proceed so that the structural steel could be in place for the general contractor, issued Romac's Notice to Proceed on June 5, 1973, simultaneously with that of the Petitioner,. Although this simultaneous issuance of the Notices to Proceed, contrary to the design of the project, was done for the benefit of the State, no changes were made in the Petitioner's contract to reflect this change in the basic scheduling concept of the project. Most importantly, no change was made in the 330 days allowed by the Petitioner's contract for completion even though that 330 days had been established by the Department's Architect directly on the assumption that the structural steel would be in place when the general contractor received his Notice to Proceed.
In late April, 1973, approximately one month after the bid opening at which the Petitioner was the apparent low bidder, the Department informed the Petitioner that contrary to the design of the project upon which Petitioner's bid was based, Romac would receive a Notice to Proceed on the same day the Petitioner would receive its Notice to Proceed. Immediately thereafter, on May 1, 1973, the Governor and Cabinet approved the contract between the Department and the Petitioner and the contract was completely executed by all parties on May 17, 1973.
The Petitioner was immediately concerned that the ninety (90) day construction time for Romac would have to be absorbed within the 330 days allowed the Petitioner to perform its responsibilities. The Petitioner's ability to perform was directly related to Romac erecting the steel upon which
the Petitioner was to place the masonry. The Petitioner immediately expressed this concern to the Department.
Upon being informed that Romac would start simultaneously, the Petitioner promptly engaged a company whose business is establishing critical path method schedules (hereinafter referred to as CPM schedules). The purpose for the development of this CPM schedule was to determine how, if at all, the various elements of the project could be coordinated so that the project could be completed within the original time frame. Representatives of the Petitioner and the Department's Architect met with the CPM company on May 11, 1973, and a CPM schedule was developed. A representative of the Department's Architect had contacted the other subsystems contractors and secured proposed work-progress schedules from them for incorporation in this CPM schedule.
It does not appear from the Contract Documents that the Petitioner had any contractual responsibility to prepare a CPM schedule for use by the Department or its Architect and the Department that the Architect, in providing "project system management services", was responsible for the "preparation and maintenance of a Critical Path Analysis and resulting Bar Chart for scheduling and coordination of all systems and subsystems", and "coordination and scheduling of systems, subsystems and non-systems elements through the use of the Critical Path Analysis and resulting Bar Chart". Article 16, Hearing Examiner Exhibit 5. Hearing Examiner Exhibit 5 is the contract between the Department and its Architect. In addition to a fee for the basic services of the Architect of 6.25 percent of the Project Construction Cost, by that contract the Department agreed to pay the Architect an additional fee of $55,750.00 for "Project Systems Management Services as described in Article 16" of the contract. It does not appear that the Architect, at any time during the construction phase of this project, utilized any critical path analysis other than that prepared by the Petitioner.
The CPM schedule prepared by the Petitioner showed that if the various subsystems contractors adhered to certain critical dates, the project might be built within the 330 days allowed by the Petitioner's contract. The Department's Architect approved and issued this CPM schedule to all of the contractors on the project as the work-progress schedule to be followed. This schedule of work was a fundamental change in the design schedule of the project.
For this fundamental change in the project concept to work, all of the subsystems contractors would have had to not only adhere to their total number of work days required, but also to the critical days established by the critical path analysis for various elements of construction. Unfortunately, the critical path was violated almost immediately. Through no apparent fault of the Petitioner, Romac failed to adhere to the critical path schedule or its own schedule submitted in preparation of the project CPM.
Romac did not substantially complete its contract until November 29, 1973, 176 days after the issuance of its Notice to Proceed. Thus Romac exceeded by 86 days the time in which it was required by its contract to complete its part of the project. Further the progress and sequence of Romac's erection of the structural steel was such that it necessarily significantly delayed the Petitioner in the completion of its contract. The evidence does not establish that the Petitioner was at fault for any of Romac's delays or that the Petitioner did not perform in a reasonable and diligent manner given the circumstances under which the Petitioner was required to perform.
The Department argues that the Petitioner delayed Romac because of a dispute over Petitioner's responsibility for the waterstop to be installed when the concrete slabs were poured by Romac. This argument, however, is not supported by the evidence. On June 15, 1973, the Petitioner notified the Architect that Petitioner's interpretation of the specifications did not require it to install the waterstop. The Petitioner felt that Romac was required to install the waterstop in the concrete slab. The logic of this position is compelling since the waterstop would have had to be in place at the time the concrete slab was poured and the design concept of the project was that Romac would be substantially complete before the Petitioner even came on the job. Thus, it is difficult to understand that the Petitioner, rather than Romac, was intended by the specifications to install the waterstop. However, it took a little over two months for the Architect to resolve this dispute. Finally, the Architect wrote a letter to the Petitioner wherein the Architect states that "we have instructed Romac Steel Company to complete the pouring of the slabs on the second, third, fourth, and fifth floors eliminating the waterstop, shown on the drawings which were dated November 3, 1972, and issued February 19, 1973". The Architect then proposed a substitute procedure for the waterstop. Thus, even it the job were delayed by this issue, the delay is attributable to the Architect's tardiness in resolving the matter and not to the Petitioner. Since the Architect, albeit reluctantly and belatedly, ultimately agreed by its decision with the Petitioner's position, it does not appear that the Petitioner was unreasonable in raising the issue. Neither does it appear that the Petitioner delayed resolution of the issue. Any delay in resolution of the issue seems to rest with the tardiness of the Architect in arriving at an ultimate answer to the dispute.
In fact, it is highly questionable whether the two-month delay of the Architect in resolving this dispute was the actual cause of delay on the project. It appears that Romac had difficulties with its concrete subcontractor because that subcontractor was nonunion while Romac's steel subcontractor was union. The tension of that situation seems to have made the concrete subcontractor very reluctant to begin pouring concrete on-site until the union steel subcontractor was finished and clear of the site. Ultimately, Romac lost its concrete subcontractor, and only with difficulty and delay did they acquire another concrete subcontractor who was able to perform the work. It appears that Romac's difficulty with its concrete subcontractor and the acquiring of a new concrete subcontractor caused significant delay and that the Architect's delay in resolving the waterstop dispute did not significantly delay the project since it was already delayed by Romac's trouble with its concrete subcontractor. Romac did not get another concrete subcontractor until September 6, 1973.
A primary cause of the significant delay in the completion of this project was the lack of competent construction management. The Department argues that most, if not all, of the fault for this lack lies with the Petitioner, who failed to provide competent construction management for the project.
The evidence is undisputed that the Petitioner never assumed responsibility for construction management of the entire project. While the Petitioner made several serious attempts at coordinating the other separate contractors or subsystems on the project, the Petitioner never attempted, or was allowed, to exercise construction management in the nature of that typically exercised by a traditional general contractor and necessary for the timely completion of a project. The reason for this was that the Petitioner, on this project, was not a traditional general contractor. As will be discussed in the Conclusions of Law, it does not appear that the Petitioner had any contractual
responsibility to provide such traditional construction management on this project.
It appears that there was a great deal of confusion among the contractors on this project, the Department, and the Department's Architect over who was ultimately responsible for the construction management of this project. That confusion appears to have been most intense on the part of the Department and its Architect.
Senior managers within the Department at the time of this project testified that they did not look to the Architect for construction management, but rather, they expected the Petitioner to provide the construction management traditionally provided by a general contractor. However, in contradiction of this testimony, the Department's on-site project manager took the unequivocal position throughout the pendency of the project, that in this type of project the Architect was to provide construction management and not the Petitioner. The Department's project manager wrote numerous letters and memos expressing this position, and throughout the project conducted his responsibilities on behalf of the Department with the premise that the Architect was responsible for construction management.
Interestingly, the Chief of the Department's Bureau of Construction was at the time of the project testified that it was his position during the project that responsibility for "coordinating" the entire project lay with the Petitioner, not the Architect. This witness suggested that construction management was to be provided not by the Architect, but by the Petitioner. He further testified that the Petitioner failed to provide such construction management and that he knew of this failure on the part of the Petitioner. Yet, pointing up the confusion in this project, this same Chief of the Bureau of Construction then testified that he took no steps to notify the Petitioner that it was failing its alleged contractual responsibility of properly coordinating and managing the project. It is difficult to comprehend why, if the Chief of the Bureau of Construction truly felt at the time that the Petitioner was contractually responsible for providing construction management, he would not have taken steps to make the Petitioner aware that its failure to provide such construction management was critically delaying completion of the project. The Petitioner was never notified by the Department or the Architect that it was in default of its contract for any alleged failure to perform required construction management services. If, during construction of the project, the Department felt that the Petitioner was contractually responsible for construction management, it is strange that, with no attempt to enforce that contract, the Department would look to the Architect for those construction management services as it did ultimately.
Compounding the difficulty in understanding the testimony of the Department's witnesses relating to Petitioner's management duties is the fact that in early October, 1973, the Department solicited an offer from the Petitioner to perform construction management services from that point forward for a fee of $25,000.00. If the Department felt that the Petitioner was already contractually bound to provide such services, why did it even discuss an additional fee and contract for them? The Department ultimately rejected the Petitioner's offer which it had solicited, and entered into a further agreement with the Architect wherein the Architect was to assume construction management and coordination of the project.
Pursuant to this agreement the Architect on November 5, 1973, employed a construction manager. The Department paid for the services of this
construction manager from November 5, 1973, to December 31, 1973. He continued as the construction manager until mid-1974 presumably being paid by the Architect. Some time in December, 1973, the construction manager hired by the Architect left the job site and thereafter operated from the Architect's office in Tampa. Even after the employment by the Architect of the construction manager, the construction management of the project remained marginal at best. This agreement between the Department and the Architect was apparently in addition to their agreement set forth in Hearing Examiner's Exhibit 5 wherein for a fee of $55,750.00 the Architect agreed to provide "Project Systems Management Services" defined in Article 16 thereof as:
Analysis of total construction project and division of the total project into workable systems and subsystems.
Preparation and maintenance of a Critical Path Analysis and resulting Bar Chart for scheduling and coordination of all systems and subsystems.
Preparation of performance specifications for each system and subsystem including drawings as required to obtain competitive bids.
Evaluation of proposals for compliance with design parameters and to obtain the best combination of systems and subsystems proposals.
Revisions of drawings and specifications to fit the combinations of systems and subsystems proposals finally agreed to.
Coordination and scheduling of systems, sub- systems and non-systems elements through the use of the Critical Path Analysis and resulting Bar Chart.
Coordination of new contract procedures for the transferable contracts required by Fast Track Bidding and construction.
Resolution of any interface problems that may result between systems and/or subsystems.
Fast-Track Management of the Systems or Sub- Systems where economically beneficial.
Evaluation, including In-depth Comparison Reports of System vs. Standard Approach to construction during all stages.
(Emphasis added)
Instead of the 330 days allowed by the contract for the Petitioner to complete his part of the project it actually took 511 days, or 181 days beyond the required completion date of the contract. It is interesting to note that this excess time, 181 days, is almost exactly equal to the length of time it
took Romac, the steel contractor who was supposed to be complete before the Petitioner even went on the job, to complete its contract. Romac took 176 days to reach substantial completion. Romac's contract called for completion in 90 days.
On any complex project such as this, it is difficult, at best to define, minute-by-minute, the reasons for and extent of any delay in construction. It is reasonable, however, on the face of this record to find as a matter of fact that the Petitioner was delayed in its completion through no fault of its own. This delay, ultimately the responsibility of the Department, is attributable primarily to three causes. First, the alteration of the concept of the project whereby Romac and the Petitioner were issued simultaneous Notices to Proceed rather than allowing Romac to complete before the Petitioner began its work, changed the entire character of the project and necessarily increased the time reasonably necessary for completion by the Petitioner. Second, Romac, the Department's separate contractor, through no fault of the Petitioner, failed to complete its part of the project on time, thereby further delaying Petitioner's completion. Third, and perhaps most important, the lack of responsible construction management on the project caused much confusion and delay, none of which was the fault of the Petitioner. This third cause is inextricably intertwined with the first two. With proper scheduling and construction management the first two causes may have been eliminated.
For the foregoing reasons the record establishes as a matter of fact that the Petitioner was delayed, and that a reasonable measure of that delay is the time it took Romac to complete its part of the project, 176 days. This delay was due to no fault of the Petitioner and was the ultimate responsibility of the Department, its agents or separate contractors. Except for the Department's actions and those of its independent contractor, Romac, the Petitioner would have come on the job, as designed, with the steel in place and ready for the Petitioner's labor. The Department and the Architect failed to provide adequate construction management of the project and, ultimately, failed to properly schedule the phases of construction.
Because of this delay the Petitioner incurred certain additional costs. The Petitioner had to pay an extra job insurance premium of $2,592.00 to renew its job insurance policy for the continuation of the project beyond the original time of the contract. The Petitioner's total field office and home office overhead was $527.64 per day. Home office, or indirect, overhead was allocated for this job at $294.82 per day. Direct job costs, including the salary of the superintendent and project manager, utilities, and various items of basic equipment, averaged $232.82 per day. In September, 1974, approximately one month prior to the completion of the job in October, 1974, the Petitioner removed most of its facilities from the site because the job was essentially complete, except for finish work awaiting completion by separate interior contractors. Therefore, in September and October, 1974, the Petitioner's direct job overhead was reduced considerably. However, indirect, or home office, overhead remained constant. Therefore, because of the delay the Petitioner incurred 145 days of additional direct job overhead which cost $33,758.90 and
176 days of additional indirect job overhead which cost $51,888.32. The Petitioner's anticipated profit margin on this project was 6 percent which is reasonable and when applied to the above costs equals $5,294.35.
Because of the above delays the Petitioner incurred increased costs for masonry. It was necessary for the Petitioner to rent additional equipment at a cost of $7,375.00. In addition, the pay scale for bricklayers and mason tenders increased 80 cents per hour respectively during the period from February
through June, 1974. When those increased rates are multiplied by the number of payroll hours during the extended period, the Petitioner's increased labor costs for masonry due to the delay is $16,565.00. Sales tax for the materials and payroll taxes and insurance for this same time period total $3,608.00. Thus, the total increased masonry cost because of the delay in the project is
$27,548.00.
An itemization of the cost of the delay to the Petitioner is a follows:
Additional insurance premium Direct overhead | $2,592.00 |
145 days at $232.82/day | 33,758.90 |
Indirect overhead | |
176 days at $294.82/day | 51,888.32 |
6 percent Profit for above | 5,294.35 |
Increased masonry costs | 27,548.00 |
TOTAL COSTS $121,081.57
Thus, with regard to Petitioner's Claims Nos. 1, 12, 19, and 20 dealing with job progress delay, whereas the hearing examiner in the original "Recommended Order" found no ultimate fault on behalf of the Department, the undersigned finds as set forth above that the Department is responsible for the delay and that the Petitioner thereby incurred the above costs as a result of that delay.
In disposing of Petitioner's Claim No. 3, dealing with the installation of certain spandrel angles, the hearing examiner found that "as a result of the Architect's untimely decision, the Contractor was required to fabricate and install additional spandrel angels". Thus, the hearing examiner concluded that the Petitioner was entitled to the total amount of his claim as established by the evidence. He then found that amount to be $5,400.75. However, as pointed out by the Petitioner in his exceptions, the evidence establishes that $5,400.75 includes only the cost of labor and materials. In addition, there was a real cost to the Petitioner of $507.50 for liquid air, auto fasteners, and welding machine costs necessary for the installation of the subject spandrel angles. Further, the $5,400.75 the hearing examiner found should be paid Petitioner with regard to spandrel angles, did not include an amount for overhead and profit. The reasonable amount to be allocated to overhead and profit respectively is percent. Thus, accepting the findings of the hearing examiner, with regard to the liability of the Department for this claim, the correct amount to which the Petitioner is entitled, is as follows:
Labor and materials (recommended $5,400.75 to be awarded by the hearing
examiner)
Liquid air, auto fasteners, and 507.50
welding machine costs
6 percent overhead and 6 p. profit 708.99
TOTAL AMOUNT OWED CONTRACTOR $6,617.24 FOR ADDITIONAL SPANDREL ANGLE WORK
Therefore, in addition to the $5,400.75 recommended to be awarded the Petitioner by the hearing examiner, it appears that an additional $1,216.49 is properly due the Petitioner based upon the finding of liability by the hearing examiner in the original "Recommended Order".
The hearing examiner recommended that the Petitioner was entitled to recovery on Claims Nos. 2 and 8. The Petitioner took exception to that recommendation to the extent that it did not include an allowance of 6 percent for overhead and 6 percent for profit. While ordinarily it would appear as a matter of fact that those are the proper percentages to be allocated to overhead and profit, on the face of the record it appears that the amounts recommended by the hearing examiner for Claims Nos. 2 and 8 may have been agreed to as the amounts payable on those claims should the Department be liable. It does not appear that evidence exists warranting amendment of the hearing examiner's recommendation with regard to Claims Nos. 2 and 8.
With regard to Claim No. 4 in the amount of $1,055.88, the hearing examiner found that the Petitioner failed to meet the basic notice requirements by the contract to entitle the Petitioner to compensation for additional work. Petitioner's Claim No. 4 referred to the necessity of chipping back one-half inch of the brick on the fourth floor, northside, because Romac's slab floor extended too far out, and as a result, the installed brick shelf angle protruded excessively and brickwork could not be aligned with the other floors. It is unchallenged that the work was actually performed by the Petitioner, and that the cost of that work was $1,055.88. The evidence establishes the necessity for the work and the fact that it was extra work not required by the Petitioner's contract nor caused by fault of the Petitioner. The Architect's project representative, Mr. Clayton Hyland, was aware that the work was needed and that it would be extra work for the Petitioner. Mr. Hyland indicated that Romac would be back-charged for the work. The formal notice of additional work required by the contract did not occur; however, it appears that the Architect and thus the Department had actual notice of the intended work, and accepted the necessity for the performance of the extra work. The evidence supports the claimed amount of $1,055.88. Adding 6 percent for overhead and 6 percent for profit, the total amount of the claim is $1,170.27.
Claim No. 13 was a claim by the Petitioner arising out of a claim back through the Petitioner from the Holloway Corporation, who was the Petitioner's electrical subcontractor. The claim, which originally totaled $14,832.33, included an amount for the cost of off-site storage of material allegedly incurred because of the delay in the construction of the job, and the cost of extended overhead to Holloway Corporation because of the delay in the job. The hearing examiner found that with regard to that part of the claim was not preserved by the Petitioner's timely submission of it to the Department. A review of the record indicates that there is competent substantial evidence to support the hearing examiner's conclusion with regard to that part of Claim No. 13.
The hearing examiner then found, however, that it". . . would appear that the subcontractor [Holloway Corporation] has preserved his right to process a claim for extended overhead and job costs due to alleged delays..." He goes on to find that "...very little additional information is adduced [in the record] upon which a claim for delay costs can be properly and adequately evaluated" and concludes that Petitioner has failed to sustain its claim for damages due to delays. In fact, it appears from the record that Holloway Corporation, the Petitioner's electrical subcontractor, was providing one of the major elements of the Petitioner's contract with the Department. The electrical
work required Holloway Corporation to be on-site from the time of the Petitioner's Notice to Proceed until the completion of the Petitioner's part of the project. The electrical work could only proceed at the same rate as the building that was being erected. For example, the electrical contractor could not rough-in conduit in a ceiling if there was not ceiling yet in place.
Similarly, the electrical contractor could not install fixtures in partitions if the partitions were not installed. Thus, the electrical phase of the project could only proceed at the same rate as the erection of the building. It has been concluded above as a matter of fact that the Petitioner was delayed for 176 days through no fault of its own in completion of the building. This delay necessarily affected the electrical portion of the Petitioner's contract being performed by the Petitioner's electrical subcontractor, Holloway Corporation.
The evidence of record further establishes that the Holloway Corporation has claimed $45.30 per day for the cost of keeping its superintendent on the job during the pendency of the project, including all of the delays. There is no evidence of record to contradict the reasonableness of the foregoing costs.
Therefore, it is concluded that as a matter of fact the Petitioner's electrical subcontractor, Holloway Corporation, was damaged by the delay of 176 days referred to above to the extent of $45.30 per day for the cost of a superintendent, which costs would not have occurred had the project not been delayed. That is a total of $7,972.80. The Holloway Corporation was reasonably entitled to 6 percent profit for its work. Therefore it appears that the Petitioner's electrical subcontractor, Holloway Corporation, pursuant to its claim through the Petitioner, incurred $8,451.17 in additional costs including profit because of the above-referenced delay.
The Hearing examiner found that the Petitioner had to do the extra work for which it claims compensation in Claim No. 14 because of an error in the drawings by the Architect. The hearing examiner further found that the Petitioner in fact incurred extra labor and material costs. The record of his proceeding supports those findings. However, the hearing examiner then concluded as a matter of fact and law that the Petitioner failed to conform to the proper notice requirements required by the contract to perfect his claim. The amount of the claim, $1,087.00, is established by the evidence and with the addition of 6 percent overhead and 6 percent profit the claim totals $1,217.44. The record establishes that the Petitioner in fact did the work, that the work was necessary to the completion of the project, and that the work was extra work necessitated by an error in the drawings of the Architect and not through the fault of the Petitioner. The Department's Architect had actual knowledge of the extra work which is the subject of Claim No. 14 before, during, and after its performance. There was no indication in the record that the Petitioner offered to do this work for free. The Architect had actual, timely notice of the additional work.
With regard to Claim No. 15 the hearing examiner stated unequivocally that the claim was well founded and that the Petitioner was entitled to be compensated in the amount claimed. A review of the record indicates no reason to alter that conclusion. Although he found that the claim was valid and that the "claim amount" should be paid, the hearing examiner recommended that
$1,665.08 be paid the Petitioner under the claim rather than the claimed amount of $3,226.44. The claimed amount of $3,226.44, including extra labor and insurance, represents the excess of actual costs over estimated costs for the subject work, since the estimated costs did not include the extra work for which compensation is sought by Claim No. 15. Having searched the original "Recommended Order" and the record to determine the basis for the hearing examiner's recommendation of $1,665.08, and failing to find any such basis, and further noting that the Department in its memorandum to the undersigned Hearing
Officer has provided no explanation of the basis for this lesser amount, it is concluded that the amount of $3,226.44 is the correct amount by which the Petitioner should be compensated for Claim No. 15.
In disposing of Claim No. 16 the hearing examiner considers it together with Claims Nos. 1, 12, 19, and 20 which deal primarily with the overall question of job progress delay. The hearing examiner deals with that question in a broad manner, seemingly concluding that the matter is so complicated and difficult of solution that it is doubtful"...whether or not claims in respect of delay can be so meticulously reviewed in order to be able to determine where in fact the Contractor [Petitioner] is entitled to monies and where in fact he is not." Whereupon the hearing examiner finds that the Petitioner has not shown his entitlement to additional compensation for Claims Nos. 1, 12, 16, 19, and 20. However, no matter how Claims Nos. 1, 12, 19, and
20 may be disposed of, a review of the record indicates that Claim No. 16 can be dealt with directly. (It should be noted that at times in the record Claim No.
16 is referred to as Claim No. 12). This claim was for the cost involved in reforming a beam across the entrance way in the Rehearsal Building because of the alleged delay in receiving approval by the Architect of the shop drawing for the steel in the beam. The shop drawing for beam steel was submitted to the Architect's office by the Petitioner on June 20, 1973. The shop drawing was returned "approved", dated July 27, 1973. Thus, approval of the shop drawing by the Architect took at least 41 days, plus time for return mail. No correction or modification to the shop drawing was noted. Pending approval of the shop drawing the Petitioner had already formed the beam bottom, the installation of which awaited approval of the shop drawing. It does not appear unreasonable for the Petitioner to have formed this beam bottom in preparation for installation upon approval of the shop drawing, particularly since the shop drawing was approved with no changes or modification. While waiting for approval of the shop drawing the formed beam bottom warped from exposure to the weather and had to be reformed. No evidence was presented that would establish fault on the part of the Petitioner in allowing the beam bottom to warp, or in contributing to the delay of 41 days for approval of the shop drawing. It is found as a matter of fact on the record of this proceeding that 41 days was an unreasonable period of time for the approval of the subject shop drawing. The evidence establishes that the cost for labor and materials to reform the beam bottom was
$972.00. Adding 6 percent overhead and 6 percent profit, the total cost to the Petitioner is the amount claimed, $1,088.64. This cost was incurred through no fault of the Petitioner.
The Petitioner has taken exception to the hearing examiner's findings and recommendation with regard to Claim No. 18. A review of the record and the rulings of the hearing examiner indicates no reason in the opinion of the undersigned why those findings and recommendations should be disturbed.
CONCLUSIONS OF LAW
The claims and disputes which are the subject of this proceeding are properly cognizable by this forum through Section 8.5 of the Contract Documents. The claims of Petitioner, unless otherwise specifically noted herein, were adequately perfected in the course of the project through the actions of the Petitioner and the Department, as set forth in the Findings of Fact, even though those claims may not have been strictly perfected in accordance with the formal requirements of the Contract Documents. By their actions, both parties have waived their rights to claim strict adherence to the requirements of the Contract Documents with regard to the notice requirements for perfecting claims referred to in the Findings of Fact.
The Contract Documents allow for the imposition of a reasonable allowance for overhead and profit to be paid Petitioner in the event of a Change in the work by the Department or in the even of the imposition of damages against the Department for actions of the Department in the nature of a Change in the Work. Such is the case in this proceeding. As established by the Findings of Fact above, a reasonable allowance for overhead and profit of 6 percent for overhead and 6 percent for profit. See Article 12 and Paragraph 8.3.4, Article 8, Contract Documents.
The Contract Documents allow Petitioner to recover damages for delay caused by the Department or its separate contractor. When, as in this case there is not a "No Damage for Delay" clause, a contractor who is delayed by a separate contractor may recover damages from the owner, in this case the Department, for breach of implied duty not to hinder performance. See discussion and numerous authorities cited in Byrne v. Bellingham Consol. Sch. Dist. No. 301, Whatcom County, 108 P.2d 791, 795-96 (Wash. 1941). In 17A C.J.S., Contracts 502(4), the rule is stated:
[I]n the absence of any stipulation in the contract exempting him therefrom, the owner is liable for damages from delays
caused by the failure of other contractors to perform work which they have undertaken to do for the owner, and which with respect to the former contractor, the owner is under obligation to do....
As a general rule, if a contractor agrees to do certain work within a specified time, and he is prevented from performing the contract by the act or default of the other party, or by the acts of persons for whose conduct the other party is responsible, the delay thus occasioned is excused and, in the absence of contractual provisions to the contrary, the contractor has a right to recover damages resulting form such delay from the owner. See also 13 Am. Jur. 2nd Building and Construction Contracts, Sections 48 and 50. This general rule is applicable to the job progress delay Claims Nos. 1, 12, 19, and 20 in this cause.
The Department has argued that the Petitioner was contractually responsible for providing the overall construction management. The Contract Documents fail to support that argument. Bearing in mind the conceptual difference of this project from those in with which the Department was previously familiar, the Petitioner's contract imposed less construction management responsibility than was imposed upon general contractors in those previous projects.
Article 4.3.1 of Petitioner's Contract States that the Petitioner is obligated to "...supervise and direct the work..." (Emphasis added). It further directs that the Petitioner"...shall be solely responsible for all. sequences
and procedures and for coordinating all portions of the work under the Contract." (Emphasis added). The pivotal phrase here, apparently misunderstood by the Department, is "the work". Article 1.1.3 of the Contract defines "THE WORK" in pertinent part as "...all labor necessary to produce the construction required by the Contract Documents..." Thus the Petitioner's obligation to coordinate work, or provide construction management, only applied to the construction required by its contract. The Petitioner had no obligation to coordinate the work required by separate and independent contracts between the
Department and other contractors. It is the lack of proper coordination and construction management of these separate contractors that has caused serious delay on this project. Indeed, in the development phase of the project the Department must have been aware of this potential vacuum of construction management, else why would it have advertised the bids with the alternative of assigning these separate contracts to the general contractor if not to, in part at least, thus obligate the general contractor to provide construction management and coordination. Perhaps, if the Department had chosen that alternative the delays due to construction management would not have occurred. Unfortunately the Department chose to assign the separate contracts to the Petitioner and thus the Petitioner was obligated to provide construction management and coordination for its work only.
It is concluded as a matter of law that the delay referred to in Paragraph 1 of the Findings of Fact was either the fault of the Department or of separate contractors for whom the Department was responsible, and that Petitioner is entitled to damages, including profit, for that delay. The amount of that damage, including profit, as set forth specifically in Paragraph 1 of the Findings of Fact, is $121,081.57.
It is concluded as a matter of law that for the reasons set forth in Paragraph 2 of the Findings of Fact, and consonant with the findings of liability of the hearing examiner in the original "Recommended Order", Petitioner is entitled to $6,617.24 as compensation for Claim No. 3.
With regard to Claims Nos. 2 and 8, based on the Findings of Fact set forth in Paragraph 3 above, it is concluded as a matter of law that Petitioner is not entitled to any further recovery than that recommended by the hearing examiner in the original "Recommended Order". That amount for Claim No. 2 is
$317.80 and for Claim No. 8, $3,018.11.
With regard to Claim No. 4, based on the Findings of Fact set forth in Paragraph 4 above, it is concluded that as a matter of law the claim was adequately perfected in the course of the project through the actions of the Respondent and the Department even though the claim was not strictly perfected in accordance with the requirements of the Contract Documents. By their actions with regard to the claim, both parties have waived their rights to claim strict adherence to the requirements of the Contract Documents with regard to perfection of the claim. The Petitioner being otherwise entitled to compensation for the claim is entitled to $1,170.27 for Claim No. 4.
Claim No. 13, as set forth in Paragraph 5 of the Findings of Fact, is similar in nature to the job progress delay claims asserted in Claims Nos. 1, 12, 19 and 20. The Petitioner, on behalf of its electrical subcontractor, Holloway Corporation, properly seeks compensation for the damage to Holloway by the delay in this project. The Conclusions of Law set forth above which are dispositive of the overall delay claim are also applicable and dispositive of this Claim No. 13. Therefore, based upon the Findings of Fact and these Conclusions of Law, Petitioner is entitled to $8,451.17 for Claim No. 13.
It is concluded as a matter of law, contrary to the conclusion of the hearing examiner in the original "Recommended Order", that Claim No. 14 of the Petitioner was adequately perfected in the course of the project through the actions of Petitioner and the Department as set forth in Paragraph 6 of the Findings of Fact even though the claim was not strictly perfected in accordance with the requirement of the Contract Documents. By its actions both parties have waived their rights to claim strict adherence to the requirements of the
Contract Documents with regard to perfection of the claim. There being no other challenge to the amount of the claim, Petitioner is therefore entitled to
$1,217.44 for Claim No. 14.
The original "Recommended Order" correctly concluded that the Department is liable for Claim No. 15 of the Petitioner. However, as set forth in Paragraph 7 of the Findings of Fact it appears that the correct amount to which Petitioner is entitled under that claim is $3,226.44, not $1,665.08 as recommended by the hearing examiner. Therefore, it is concluded as a matter of law that Petitioner is entitled to $3,226.44 for Claim No. 15.
With regard to Claim No. 16, as set forth in Paragraph 8 of the Findings of Fact, the Petitioner was damaged in the amount of $1,088.64 by the delay of the Department's Architect in the approval of shop drawings. Pursuant to the Conclusions of Law regarding delay set forth above, Petitioner is therefore entitled to recover $1,088.64 for Claim No. 16.
As stated in Paragraph 9 of the Findings of Fact, it appears that with regard to Claim No. 18, the findings and recommendations of the hearing examiner were correct and should not be disturb. Thus Claim NO. 18 was properly denied.
In the original "Recommended Order" the hearing examiner recommended that Petitioner was entitled to full recovery on the following claims:
Claim No. 10 | $ 2,348.33 |
Claim No. 11 | 1,386.00 |
Claim No. 17 | 2,734.44 |
Claim No. 23 | 31,500.00 |
Upon review of the record of this proceeding there appears to be no reason of fact or law to disturb the findings and recommendations of the hearing examiner with regard to the aforestated claims, and it is therefore concluded that Petitioner is entitled to recover for those claims in the amounts set forth above.
An additional hearing before the undersigned Hearing Officer has been set to receive evidence on the applicability of taxing interest, legal costs, and attorneys fees pursuant to the Contract Documents. That hearing is scheduled to occur subsequent to the entry of these Findings of Fact, Conclusions of Law, and Recommendation, and a supplemental recommendation will be entered by the Hearing Officer on that subject.
It is concluded that as a matter of law, Petitioner is entitled to no other compensation or adjustment under the subject contract than that referred to above.
All motions not otherwise disposed of by order of the Hearing Officer are denied.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
RECOMMENDED:
That Petitioner be awarded additional compensation for the subject project as follows:
Claims Nos. 1, 12, 19, and 20 $121,081.57
Claim No. 2 317.80
Claim No. 3 6,617.24
Claim No. 4 1,170.27
Claim No. 8 3,018.11
Claim No. 10 2,348.33
Claim No. 11 1,386.00
Claim No. 13 8,451.17
Claim No. 14 1,217.44
Claim No. 15 3,226.44
Claim No. 16 1,088.64
Claim No. 17 2,734.44
Claim No. 18 -0-
Claim No. 23 31,500.00
TOTAL $184,157.45
Respectfully submitted and entered this 21st day of July, 1981, in Tallahassee, Florida.
CHRIS H. BENTLEY, Director
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1981.
COPIES FURNISHED:
Stephen Turner, Esquire
318 N. Calhoun St.
Drawer 591 Tallahassee, Florida 32302
Spiro T. Kypreos, Esquire Department of General Services Larson Building (Room 457) Tallahassee, Florida 32303
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
GUIN AND HART, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 77-1400BID
) (Fees) STATE OF FLORIDA, DEPARTMENT OF )
GENERAL SERVICES, )
)
Respondent. )
)
SUPPLEMENTAL RECOMMENDED ORDER
The Petitioner seeks an assessment of costs, charges and interest against Respondent in this cause. In furtherance of that request, a hearing was held on July 28, 1981. Having considered the matters presented at that hearing and the memoranda of the parties, and being otherwise fully advised of those proceedings, the Hearing Officer enters the following:
FINDINGS OF FACT
The Petitioner has been represented by two attorneys during this cause. Dale E. Rice, Esquire, a member of the Florida Bar, initially represented Petitioner and continued that representation at least into 1976. Petitioner paid Mr. Rice an attorney's fee of $12,500 and costs, including copies, telephone calls, travel expenses, and postage, of $196.11.
Beginning in July, 1975, and continuing until the present, Petitioner has also been represented by M. Stephen Turner, Esquire, a member of the Florida Bar. The initial fee agreement between Petitioner and Mr. Turner was that Mr. Turner would be reimbursed a minimum fee on the basis of $60 per hour and a maximum fee of twenty-five percent of the total amount recovered and collected from the Respondent. As the complexity and magnitude of this controversy became apparent to both Petitioner and Mr. Turner, this fee agreement was amended. The present agreement between Petitioner and Mr. Turner as evidenced by the record of this proceeding is that they have agreed to wait until the conclusion of the proceeding and agree upon a reasonable fee contingent in nature.
Mr. Turner has estimated that through August, 1981, he had expended 1,025 hours of time in prosecution of the Petitioner's claim. Although no time records were available from which to calculate the time expended by Mr. Turner, his estimate of 1,025 hours was corroborated by the unrebutted estimate of a disinterested member of the Florida Bar who, after review of the complete file in this cause, estimated that Mr. Turner would have had to have expended approximately 1,000 hours in the prosecution of Petitioner's claim. Mr. Turner's estimate of 1,025 hours is reasonable and accurate.
The efforts of Messrs. Rice and Turner culminated in the award of
$184,157.45 additional compensation to Petitioner in the subject cause. The record of this proceeding indicates that Mr. Turner performed the vast bulk of the legal work leading to this award.
The record establishes that an hourly rate of $70 per hour is a reasonable amount by which to measure the value of Mr. Turner's professional services during the progress of this dispute. The opinions of three members of the Florida Bar were submitted either by affidavit or live testimony as to a reasonable attorney's fee in this cause. All three attorneys offering an opinion had reviewed the file in this cause and were familiar with the dispute. No contrary opinion was offered, nor were these proffered opinions otherwise rebutted. All three attorneys offering an opinion are experienced in complex matters of the type involved here. One attorney stated that in his opinion
$85,000 to $100,000 would be a reasonable fee to be paid to Petitioner's attorney for services rendered in this cause. The second attorney offered the opinion that a reasonable attorney's fee in this cause would be $100,000 to
$120,000. The third attorney offered the opinion that a reasonable attorney's fee in this cause would be $80,000 to $90,000. As noted by all three attorneys offering an opinion on a reasonable attorney's fee, this was a complex and extremely difficult proceeding. It is further found as a matter of fact that Mr. Turner enjoys an excellent reputation within the legal profession. A reasonable fee for Mr. Turner's services in this cause is $70 per hour for the 1,025 hours Mr. Turner expended on Petitioner's behalf. That is a fee of
$71,750.
The following costs and charges are found as a matter of fact to have been expended by Petitioner in the prosecution of this cause:
$ 154.50 Orlando Reporters, Inc.
431.25 Elizabeth A. Lester, Court Reporter
95.00 Elizabeth A. Lester, Court Reporter
310.75 Elizabeth A. Lester, Court Reporter
223.80 National/U.S. Constructors, Inc. -- charges incurred for testimony
493.62 D. E. Holmes, AlA, Expert Witness
196.11 Dale E. Rice, Esquire, Expenses as recounted above
958.39 M. Stephen Turner, Esquire -- Expenses, see Petitioner's Composite Exhibit 6
200.00 Stewart Brown, Expert Testimony
==========
$ 3,063.42
The foregoing are not necessarily the only costs and charges incurred by Petitioner in this cause, but are specifically found by this Hearing Officer to be those both proven of record in this proceeding and deemed to be equitably assessed against Respondent.
Petitioner seeks $9,793.41 in travel costs and costs related to travel in connection with the prosecution of this claim. However, the record fails to establish as fact that $9,793.41 was necessarily and equitably expended by Petitioner in travel and related costs specifically in prosecution of this claim. Neither does the record provide a sufficiently detailed breakdown of these claimed costs to allow the Hearing Officer to determine which amount, if any, should be equitably assessed against Respondent. Similarly, Petitioner claims $2,374.06 in telephone long-distance toll charges related to prosecution of this claim. The evidence by which Petitioner sought to establish the validity of this expenditure is not sufficient to find as a matter of fact that
$2,374.06 was expended on telephone long-distance tolls in prosecution of this claim.
Petitioner paid $2,500 to Mr. O. C. Mills, International Agency for Claims and Collections, Inc. Mr. Mills was apparently employed to analyze the problems existing between Petitioner, the Department of General Services, and the Department's architect. After considering the entire record of this proceeding, including the document marked as "Examiner's Exhibit No. 4B" in the original hearing in this cause, which is the submission to the Petitioner by the International Agency for Claims and Collections, Inc. of its analysis, it cannot be found as a matter of fact that the cost of Mr. Mills' services through the International Agency for claims and Collections, Inc., should equitably be assessed against Respondent under the circumstances of this case.
Petitioner claimed $1,000 as its cost for making copies in connection with this case. The figure of $1,000 was apparently based upon the cost of the rental of a copier used in Petitioner's business which testimony set at $200 per month. There being no further evidence delineating the cost to Petitioner of making copies in connection with this case, it cannot be found as a matter of fact that Petitioner used a copy machine for five months exclusively in connection with the prosecution of this case. Thus, the evidence is insufficient to support a finding of fact that Petitioner expended $1,000 in copying costs in connection with this cause which would be equitably assessed against Respondent.
The President of Petitioner, William A. Hunt, testified that he estimated that he spent approximately three or four months of his time in prosecution of this claim and that Petitioner thereby lost $20,000 in his productive time. The testimony is not sufficient to make a finding of fact that Petitioner, actually suffered a loss of $20,000 because of the time spent by Mr. Hunt in prosecution of this claim. Further, from the record of this proceeding it cannot be concluded as a matter of fact that the value of Mr. Hunt's lost productive time should be equitably assessed against Respondent.
CONCLUSIONS OF LAW
Paragraph 8.5 of the contract between Petitioner and Respondent is entitled "Claims and Disputes." In pertinent part it states:
In the determination and settlement of any such dispute, the said Review Panel may
assess the costs and charges of the proceeding upon either or both parties, as it may deem equitable under the circumstances, which
costs and charges may include, but shall not be limited to, any professional, legal or technical advice and counsel it may require; and if it deems it equitable, it may award to the successful party, in any
dispute, damages for delays, or for necessary costs and expenses, caused by the proceeding, if it finds that the appeal or refusal to
accept the Architect's determination was without reasonable cause.
The first phrase of the foregoing provides that "costs and charges of the proceeding" may be assessed "upon either or both parties" as may be "equitable" under the circumstances. That first phrase goes on to state that " . . . costs and charges may include, but shall not be limited to, any professional,
legal or technical advice and counsel it may require." Where reference is made to a "Review Panel," that reference includes a hearing examiner and could include a Hearing Officer as those entities have existed in this proceeding.
Clearly, the term "costs and charges" was intended by the parties to the contract to include attorneys fees since such is specifically included within the term "costs and charges" in the latter part of the subject phrase.
Respondent argues that the entire phrase is intended to refer only to costs and charges of the "Review Panel" and not the costs and charges incurred by the parties to this proceeding. That argument is specifically rejected. The phrase states that "the Review Panel may assess the costs and charges of the proceeding . . ." The reasonable interpretation of this language is that the costs and charges referred to are those incurred by the parties. The provision then goes on to specifically extend the right to "costs and charges" to the "Review Panel" by its statement that " . . . costs and charges may include, but shall not be limited to, any professional, legal or technical advice and counsel [the Review Panel] may require." Without that language, the provision would only apply to the "costs and charges" of the parties.
The second phrase of the sentence dealing with costs and charges says that " . . if [the Review Panel] deems it equitable, it may award to the successful party, in any dispute, damages for delays, or for necessary costs and expenses, caused by the proceeding, if it finds that the appeal or refusal to accept the Architect's determination was without reasonable cause." In the first phrase, the Review Panel was empowered to ". . . assess the costs and charges of the proceeding . . ." [Emphasis added] In this second phrase, the Review Panel is empowered to assess, in addition to the costs and charges of the proceeding, ". . . damages for delays, or for necessary costs and expenses, caused by the proceeding. . . " [Emphasis added] The damages, costs and expenses caused by a proceeding are different in nature from the costs and charges of a proceeding. The former could be very far reaching in scope and would, it seems, necessarily include items beyond those such as attorneys fees and witness fees normally envisioned as the costs and charges of a proceeding. Therefore, it is concluded as a matter of law that the contract allows the assessment of attorneys fees and costs against either or both parties as deemed equitable under the circumstances.
Having read the entire transcript of the proceeding before the hearing examiner and having read and considered every exhibit submitted therein, as well as having considered all memoranda and argument of counsel in this cause, it appears that this cause, complex by its nature, was made considerably more difficult by the unwarranted contentiousness of the Respondent and its counsel during the progress of the proceeding before the hearing examiner. Weighing that with the clear entitlement to additional compensation set out in the Recommended and Final Orders previously entered herein, it is considered equitable to assess against Respondent the attorneys fees incurred by Petitioner in the prosecution of its claim. Those include $12,500 to Mr. Rice and $71,750 to Mr. Turner for a total of $84,250, as set forth in the Findings of Fact above.
Similarly, it is considered equitable under the terms of the contract to assess against Respondent costs and charges incurred by Petitioner in the amount of $3,063.42 as set forth in the Findings of Fact above.
Petitioner argues well and vigorously that interest should be allowed Petitioner on monies owned it by Respondent in this cause. However, it appears from the contract between Petitioner and Respondent that the parties
specifically contemplated at the time they entered into their contract that no interest would be paid by either party on monies not paid when due. Article 1 of the agreement between Petitioner and Respondent, dated May 7, 1973, defines the contract documents and notes that the contract documents to include the General Conditions of the Standard Form A-201 of the American Institute of Architects (AIA). Further, Section N, entitled GENERAL CONDITIONS AND SUPPLEMENTARY CONDITIONS in subparagraph 1a states:
"THE AMERICAN INSTITUTE OF ARCHITECTS, DOCUMENT A201 'GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION,' FEDERAL EDITION, DATED APRIL 1970 AND THE AMERICAN INSTITUTE OF ARCHITECTS, DOCUMENT A 201/SC, SUPPLEMENTARY CONDITION OF THE
CONTRACT FOR CONSTRUCTION, FEDERAL EDITION, DATED AUGUST 19, 1972, EXCEPT AS MAY BE ADDED TO OR MODIFIED HEREINAFTER ARE HEREBY SPECI-
FICALLY MADE A PART OF THESE CONTRACT DOCUMENTS."
Paragraph 7.9 of AIA document A201 is entitled "INTEREST." Subparagraph 7.9.1 of paragraph 7.9 states "Any moneys not paid when due to either party under this Contract shall bear interest at the legal rate in force at the place of the Project." That provision clearly provides for the payment of interest.
However, Section N, 2, (5)(A) of the GENERAL CONDITIONS AND SUPPLEMENTARY
CONDITIONS of the contract between Petitioner and Respondent states as an amendment to the standard AIA contract form A201, "PARAGRAPH 7.9, DELETE IN ITS ENTIRETY." Thus, it plainly appears that the parties contemplated the payment of interest on monies not paid when due and by deleting the requirement that interest be paid, specifically contracted and agreed that monies not paid when due would not bear interest. Therefore, it is concluded as a matter of law that Petitioner is not entitled to interest on monies due it by Respondent in this cause.
Therefore, based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
RECOMMENDATION
That Petitioner be awarded $84,250 for attorneys' fees and $3,063.42 for costs incurred as a result of this proceeding.
ENTERED this 5th day of August, 1983, in Tallahassee, Florida.
CHRIS H. BENTLEY, Director
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 5th day of August, 1983.
COPIES FURNISHED:
Stephen Turner, Esquire
318 North Calhoun Street Post Office Drawer 591 Tallahassee, Florida 32301
Thomas Beason, General Counsel Department of General Services Larson Building Room 457 Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Nov. 18, 1981 | Final Order filed. |
| Jul. 21, 1981 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 06, 1981 | Agency Final Order | |
| Jul. 21, 1981 | Recommended Order | Petitioner is entitled to adjustments for delay in performance under contract caused by other independent contractors or by Respondent. |
BAXTER`S ASPHALT AND CONCRETE, INC. vs. DEPARTMENT OF TRANSPORTATION, 77-001400 (1977)
WHITE CONSTRUCTION CO., INC. vs. DEPARTMENT OF TRANSPORTATION, 77-001400 (1977)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. OSCAR DARIAS, 77-001400 (1977)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. DAVID WAYNE MILAM, 77-001400 (1977)
