STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
BUILT RIGHT CONSTRUCTION INC.,
vs.
Petitioner,
Case No. 11-5316
PALM BEACH COUNTY SCHOOL BOARD,
Respondent.
/
RECOMMENDED ORDER
On February 25-March 1, March 5, March 12-14, April 15-19,
April 29-30, May 2-3, and May 16, 2013, Administrative Law Judge Errol H. Powell conducted the final hearing in West Palm
Beach, Florida.
APPEARANCES
For Petitioner: Michael D. Brown, Esquire
Brown & Associates, P.A.
2620 Lakeshore Drive, Suite 100 Riviera Beach, Florida 33404
For Respondent: Kathelyn Jacques-Adams, Esquire
3318 Forest Hill Boulevard
West Palm Beach, Florida 33406 STATEMENT OF THE ISSUE
Whether, in accordance with Section 4.1(l)(f), State Requirements for Education Facilities (SREF), Respondent has grounds to ratify the Superintendent's determination that Petitioner is delinquent, so as to be disqualified for a period
of one year from bidding on any construction contracts with Respondent that require certification.
PRELIMINARY STATEMENT
By letter to Petitioner dated July 14, 2011 (Superintendent's Letter), Respondent's Superintendent advised that he had declared Petitioner delinquent under SREF Section 4.1(l)(f). The Superintendent's Letter cites three grounds: "[s]ubstantial or [r]epeated failure to comply with contract documents after written notice of such non-compliance," "[s]ubstantial deviation from project time schedules after written notice of non-compliance," and "[s]ubstantial or [r]epeated failure to pay sub-contractors after the Board has paid the contractor for the work performed by the sub- contractors and in accordance with approved requisitions for payment." The Superintendent's Letter serves as the charging document in this case.
For the first ground, the Superintendent's Letter states that, at Limestone Creek Elementary School (Limestone Creek), Petitioner substantially violated Paragraph 00700.4.12 in its use of the site and Paragraph 00700.4.14 in its failure to clean up. (References to "Paragraph 00700.x" are to the General Conditions of the Contract for Design/Build, which is discussed in detail below.) Paragraph 00700.4.12 provides that a builder "shall not unreasonably encumber the site with materials or
equipment." Paragraph 00700.4.14 adds that a builder "shall keep the Project and surrounding areas free from accumulation of waste materials and rubbish."
The Superintendent's Letter alleges that, by the Contract Documents, emails, and Periodic Performance Evaluations (PPEs), Respondent required Petitioner to restore the Limestone Creek site promptly and completely. The letter claims that Respondent achieved "Substantial Completion" by January 18, 2011, but failed to restore the site by May 12, 2011, and never fully restored the site, despite subsequent written notice of the lack of restoration. The letter links Petitioner's alleged failure to restore the site to exposed cracked concrete walkways, stained areas, ungraded earth, rocks and debris in graded areas, and dead or missing sod. The letter states that Petitioner's failure left the school site with an incomplete construction site for long periods of time.
For the second ground, the Superintendent's Letter states that, at H. L. Watkins Middle School (Watkins), Independence Middle School (Independence), Jupiter Farms Elementary School (Jupiter Farms), Lighthouse Elementary School (Lighthouse), Limestone Creek, and Spanish River High School (Spanish River), Petitioner repeatedly and substantially violated Paragraph 00700.8.2. (The six schools that are the subject of the second ground of the Superintendent's Letter are collectively referred
to as the Six Schools.) The letter alleges that Petitioner failed to complete work at the Six Schools on time, even though Respondent had requested achievable completion dates. Paragraph 00700.8.2.1 allegedly states that all time limits in the contracts are of the essence. Paragraph 00700.8.2.2 allegedly states that a builder shall perform the work "expeditiously with adequate forces and shall complete it within the Contract Time."
Citing Final Completion Dates from a proposed second round of change orders to which Petitioner never agreed, as detailed below, the Superintendent's Letter states that Petitioner failed to meet the Final Completion Date on the following projects: Watkins, which was due to be completed on March 25, 2011, but was not actually completed until May 11, 2011; Independence, which was due to be completed on April 30, 2011, but failed inspections on May 31, 2011, after which Petitioner had not called for new inspections; Jupiter Farms, which was due to be completed on April 20, 2011, but was not actually completed until June 13, 2011; Lighthouse, which was due to completed on April 20, 2011, but failed inspections on April 6, 2011, after which Petitioner had not called for new inspections; Limestone Creek, which was due to be completed on April 20, 2011, but failed inspections on April 29, 2011, after which Petitioner had not called for new inspections; and Spanish River, which was due
to be completed on April 15, 2011, but was not actually completed until April 26, 2011.
The Superintendent's Letter does not allege that the substantial deviation from time schedules occurred after written notice of noncompliance.
For the third ground, the Superintendent's Letter explains that Petitioner substantially and repeatedly violated Paragraph 00700.9.5.4 by failing to pay subcontractors after Respondent had paid Petitioner for the work performed by the subcontractors. The letter alleges three instances of such nonpayment: 1) Petitioner's concrete supplier served a writ of garnishment on Respondent because Petitioner failed to pay the supplier; 2) Petitioner's aluminum subcontractor filed a legal action seeking a declaratory statement, equitable accounting, and a writ of garnishment against Respondent because Petitioner failed to pay the subcontractor; and 3) Petitioner's general contractor subcontractor filed a Notice of Non-Payment against Petitioner because Petitioner failed to pay the subcontractor. Failing to produce evidence of the third alleged instance of nonpayment, Respondent abandoned this allegation, which will not be addressed further in this recommended order.
For ease of reference, this recommended order will refer to these three grounds of the Superintendent's Letter as Counts I, II, and III.
The Superintendent's Letter notifies Petitioner of a meeting of the School Board on July 20, 2011, to consider the ratification of the Superintendent's declaration of delinquency. The letter advises that Respondent proposes to hold Petitioner in delinquent status for one year, during which time Petitioner would not be eligible to bid on any contracts with Respondent.
By letter dated July 21, 2011, to Petitioner, Sharon Swan, Respondent's Director of Purchasing, advised that, on July 20, 2011, the School Board ratified the Superintendent's declaration of delinquency, effective for one year from July 14, 2011.
The letter advises that Petitioner has a right to obtain a "fair hearing" under SREF Section 4.1(1)(f) by timely requesting a hearing, pursuant to Florida Administrative Code Rule
28-106.111(2).
By Amended Petition for Formal Administrative Hearing dated October 3, 2011, Petitioner requested a formal administrative hearing. The Amended Petition denies the allegations of each of the three counts. The Amended Petition claims that Petitioner was delayed in its performance by factors beyond its control.
The Amended Petition implicitly claims that Respondent failed to perform its obligations in good faith and impeded or delayed the performance of Petitioner.
Respondent transmitted the case to the Division of Administrative Hearings (DOAH) on October 14, 2011.
Almost one year after transmitting the case to DOAH, by Notice of Submission of Supplemental Information to Support Respondent's Position filed September 4, 2012, Respondent supplemented the allegations of the Superintendent's Letter. The notice states that the supplemental allegations provide an additional basis for determining delinquency based on Count I, but the allegations raise entirely different factual issues.
The notice states that Petitioner failed to return keys to Respondent or indemnify Respondent for the loss of the keys for Atlantic High School (Atlantic) (four keys), Egret Lake (Egret Lake), Grassy Waters Elementary School (Grassy Waters), Lighthouse, Limestone Creek, Spanish River (five keys), and William T. Dwyer High School (Dwyer). Except as indicated in the preceding sentence, the notice claims that Petitioner failed to return one key per school.
The notice alleges that Paragraph "0830.1.4 [sic; should be 00830.1.4] and Article 2 of the Agreement" incorporate the requirements of the District Master Specifications. (References to "Paragraph 00830.x" are to the Special Conditions, which is discussed in detail below. The District Master Specifications is also discussed in detail below.)
The notice states that Section 01 56 00 of the District Master Specifications requires a builder to maintain a Security Program on a project to protect the existing premises from
theft, vandalism, and unauthorized entry. The notice states that Section 01 56 00 further requires a builder to control entry onto the project site to restrict entrance of persons and vehicles onto the site and existing facilities and to allow entry only to authorized persons with proper identification.
The notice alleges that Paragraph 00700.4.18.1 requires Petitioner to indemnify Respondent from all claims, damages, losses, and expenses arising from the performance of work, provided such claims, damages, losses, and expenses are attributable to the destruction of tangible property due to a negligent act or omission of Petitioner.
Lastly, the September 4 notice states that Petitioner's failure to return the keys to Respondent constitutes a loss and damage to Respondent. The notice demands that Petitioner either return the keys or pay Respondent the cost of rekeying, which is estimated at $302,000.
The grounds for delinquency stated in the September 4 notice will be referred to as Count IV.
In Petitioner's Unilateral Pre-Hearing Stipulation filed February 22, 2013, Petitioner stated that it was not delinquent, and any delay in its performance was caused by Respondent's actions or bad faith conduct.
At the hearing, Petitioner called six witnesses and obtained the admission of 14 exhibits: Petitioner Exhibits 3-3,
5, 5-1, 6, 6-1, 6-8, 8, 8-3, 11-3, 13, 14, and 36, as well as
exhibits premarked as Respondent Exhibits 161 and 171. Respondent called 16 witnesses and obtained the admission of 138 exhibits: Respondent Exhibits 1-33, 36-43, 57-58, 59-A, 60-62,
64, 67-68, 69-71, 72 (page 1), 73-74, 76-82, 84, 86, 88-89,
95-99, 104, 106-37, 140-41, 148-150, 152-54, 159-60, 163-165
(exhibits 2 and 3), 169, 182, 191-92, 194, 196, 199-200, 211-12,
221 (exhibit 3), 224 (exhibits 14 and 16), 227, 232-1, 232-2,
232-3, 233, 239, 241-47, and 249-52.
Administrative Law Judge Errol H. Powell retired shortly after conducting the final hearing. Pursuant to section 120.57(1)(a), Florida Statutes, the case was assigned to the undersigned Administrative Law Judge, who has prepared this recommended order based exclusively on the existing record, which consists of over four thousand pages of transcript and untold thousands of pages of exhibits.
By Motion for Clarification and Motion for Status Conference filed September 25, 2013, Petitioner expressed doubts that an Administrative Law Judge could prepare a recommended order without having conducted the final hearing. By Order on Motion for Clarification and Motion for Status Conference entered September 26, 2013, the undersigned Administrative Law Judge denied both motions, citing section 120.57(1)(a), Florida
Statutes, and Sabates v. Dep't of Health, 104 So. 3d 1227 (Fla.
4th DCA 2012).
On July 23, 2013, the court reporter filed the transcript. By letter dated October 7, 2013, the undersigned Administrative Law Judge advised the parties that, based on his examination of the transcript, he had tentatively determined that Administrative Law Judge Powell had admitted into evidence the above-identified exhibits. The letter invites counsel to file corrections, if any, by October 16, 2013. The parties did not file any corrections.
On October 16, 2013, the parties filed proposed recommended orders. In its proposed recommended order, as to Count II, Petitioner contended that Respondent failed to prove that Petitioner substantially deviated from project time schedules after written notice of noncompliance; Respondent did not give Petitioner timely written notice of noncompliance in accordance with the Contract Documents; if Respondent had the right to declare Petitioner in noncompliance, it waived that right by failing to provide written notice of the alleged noncompliance; Petitioner's work was delayed by decisions of Respondent's personnel; Petitioner was prevented from meeting the completion dates by mistakes made by Respondent's personnel regarding the drainage design and lighting design, including whether lights could be installed on wet columns; and any delays resulting in
Petitioner's failure to meet completion deadlines were either waived by Respondent or caused by Respondent.
As discussed in the Conclusions of Law, Petitioner has raised several issues concerning Count II in its proposed recommended order. Three of these issues are properly addressed. The Amended Request for Hearing and Unilateral Pre- hearing Stipulation raises the issue of whether any delays were caused by Respondent; more broadly, this issue, which applies to all four counts, considers whether any noncompliance was without justifiable cause. Also, the Superintendent's Letter alleges that Petitioner's noncompliance with deadlines was substantial and followed the receipt of written notice; these two issues are elements of Respondent's case-in-chief and do not need to be raised by Petitioner as defenses.
However, Petitioner's proposed recommended order raises, for the first time, the issue of whether Respondent waived or acquiesced to Respondent's deviations from the time schedules. Timely notice of an intent to raise this issue would have allowed Respondent to be heard on the question of whether waiver or acquiescence is a defense to a delinquency proceeding, as it is in a breach of contract action. The attempt by Petitioner to raise this issue in its proposed recommended order is thus untimely. Additionally, as discussed in the Conclusions of Law,
waiver or acquiescence is unavailable as a defense to a delinquency proceeding.
For the most part, though, Petitioner's inability to assert waiver or acquiescence as a defense is irrelevant as to those claims asserted by Respondent that require proof of substantiality, rather than repetition.1/ To the extent that the acts and omissions of Respondent's employees would have supported a defense of waiver or acquiescence, they tend to support a finding that any noncompliance to which these acts and omissions pertain was not substantial, or else Respondent would not have forgiven the noncompliance. This relationship is especially pronounced because, as noted in the Conclusions of Law, Respondent must prove its case, including the substantiality of any noncompliance, by clear and convincing
evidence.
FINDINGS OF FACT
Introduction
This case involves the construction of lighted aluminum walkway covers at several dozen of Respondent's existing schools. Walkway covers are the canopies that are erected over sidewalks to protect pedestrians from rain and sun.
The construction of lighted walkway covers is not complicated. The job requires electrical, aluminum, drainage, and concrete work. The contractor lays a new sidewalk or widens
an existing sidewalk; erects columns to support the cover or canopy, accommodate the conduit to drain stormwater from the covers to the ground, and support light fixtures; fabricates and installs the canopy; installs in-ground drainage features; excavates trenches for electrical service and drainage; and restores the construction site.
Prior to the period in question, Respondent contracted with Walker Design & Construction Co. (Walker) for the construction of lighted walkway covers at Respondent's schools. In the summer of 2009, contemplating the construction of a large number of walkway covers over a short period of time, Respondent decided to broaden its pool of contractors. For schools with urgent needs, which constituted about one-quarter of the construction budget, Respondent assigned the work to Walker through its competitively bid annual contract that had been in place since 2007. Walker's work on these urgent-needs schools is not addressed in this recommended order.
For the remaining schools, Respondent decided to issue a request for proposals to obtain as many as four contractors from which it could later solicit bids for groups of projects. Respondent sought design/build contracts, in which the contractors would assume the responsibility of designing lighted walkway covers that met the stated requirements of Respondent.
Contract Documents
RFP and Selection of Four Design Builders
By Request for Proposal for the Design/Build of Aluminum Walkway Covers (RFP) published in August 2009, Respondent requested proposals by September 21, 2009, for the design, permitting, fabrication, and installation of lighted aluminum walkway covers over existing and new sidewalks at about
50 sites at an estimated budget, per site, of $50,000-$500,000 and at a total approved budget of $8 million.
The RFP Instructions to Proposers is identified as Section 00100.2/ Paragraph 00100.7.2 states that Respondent will award up to four contracts "to establish a pool of qualified Design Builders to [construct] . . . walkway covers at locations requested by the District on an as needed basis" for the ensuing two years. Paragraph 00100.7.2 explains that Respondent will request the selected Design Builders to participate in an invitation to bid for each project that Respondent chooses to undertake.
Paragraph 00100.9 provides that Respondent will issue a Notice to Proceed after the selected Design Builder3/ has submitted to Respondent the necessary documents. Paragraph 00100.9.2 requires the Design Builder, within 14 days after being awarded a specific project, to submit a performance bond, a labor and materials payment bond, proof of insurance, a list
of subcontractors, a "preliminary progress schedule," and a "Schedule of Values," which is detailed in Paragraph 00700.9.2. This paragraph is in the General Conditions of the Contract for Design/Build, which is discussed below.
In November 2009, Respondent selected four proposals submitted in response to the RFP. The winning contractors were Petitioner, Walker, Pirtle Construction Co. (Pirtle), and Hardy Industries. Hardy Industries later decided not to bid on any of the projects, so only three Design Builders competed for the projects.
With each Design Builder, Respondent entered into a master contract, a copy of which had been attached to the RFP as a Sample Owner-Design/Builder Agreement. As Respondent identified specific projects, each Design Builder conceptualized the work sufficiently to prepare an estimated cost, so as to permit the Design Builder to submit a bid for the project. Respondent then selected the lowest bid for each project. Ultimately, Petitioner won contracts for 17 schools, Pirtle won contracts for six schools, and Walker won contracts for the remaining schools, which probably numbered at least 27.
Owner-Design/Builder Agreement, General Conditions, Special Conditions, Supplementary Conditions, and Design-Build Criteria
Owner-Design/Builder Agreement
Petitioner and Respondent executed an Owner- Design/Builder Agreement on November 6, 2009. This document is identified as Section 000510 and contains Articles, not Paragraphs. References to Article 1, for instance, will thus be to Article 000510.1.
Article 000510.1 provides that the Contract Documents are the RFP, the Owner-Design/Builder Agreement, the performance and payment bonds, the Design Builder's proposal, documentation submitted by the Design Builder before and after the awarding of the contract, General Conditions, Special Conditions, Supplemental Conditions, Educational Specifications, District Master Design Specifications and Criteria, each project's Design/Build Criteria Package, Preliminary and Final Drawings, the Project Manual, and all addenda and modification issued-- respectively--before and after the submittal of the Proposal.
Article 000510.3 states that the Contract Time begins with the issuance of the Notice to Proceed, and the Work must be Substantially Completed by the date specified in the Notice to Proceed. Article 000510.3 adds that a failure to complete the Project in the specified time "shall result in substantial injury to the Owner," and a failure to meet the Substantial
Completion deadline shall result in the payment of Liquidated
Damages.
2. General Conditions
As already mentioned, the General Conditions of the Contract for Design/Build is identified as Section 00700. Paragraph 00700.1.1.1. defines the Contract Documents as the Owner-Design/Builder Agreement, the General, Supplementary and other Conditions of the Contract, the Drawings, the project manual, and all addenda and modifications. Paragraph 00700.1.1.1 adds that Contract Documents "also include [the RFP], sample forms, the Proposal or portions of Addenda related to any of these, or any other documents, unless specifically enumerated in the Owner-Design Build Agreement, unless [sic] specifically enumerated in the Owner-Design/Builder Agreement."
Count I cites Paragraphs 00700.4.12 and 00700.4.14, which are in the General Conditions. Article 00700.4.12 addresses the use of the site. The sole provision in this article is Paragraph 00700.4.12.1, which states: "The Design/Builder . . . shall not unreasonably encumber the Site with any materials or equipment." Article 00700.4.14 addresses cleaning up. The sole provision in this article is Paragraph 00700.4.14.1, which states:
The Design/Builder at all times shall keep the Project and surrounding areas free from accumulation of waste materials or rubbish
caused by his operations. At the completion of the Work, he shall remove all his waste materials and rubbish from and about the Project as well as all his tools, construction equipment, machinery and surplus materials. The Owner may, at any time deemed necessary, direct the Design/Builder to clean up the site to the Owner's standard.
Count II cites Article 00700.8.2 and Paragraphs 00700.8.2.1 and 00700.8.2.2 of the General Conditions. Article 00700.8.2 addresses progress and completion. Paragraph 00700.8.2.1 states that all time limits in the Contract Documents are of the essence. Paragraph 00700.8.2.2 requires the Design Builder to start the work on the date of commencement, as defined in Paragraphs 00700.8.1.1 and 00700.8.1.2, and complete the work within the Contract Time. Paragraph 00700.8.1.1 provides that the Contract Time starts with the issuance of the Notice to Proceed. Paragraph 00700.8.1.1.3 defines Final Completion as the date set forth in the Proposal, unless the Owner agrees to amend this date. Paragraph 00700.8.1.2 defines Substantial Completion as the date certified by the Owner that construction is sufficiently complete in accordance with the Contract Documents that the Owner "can occupy or utilize the Project for its intended purpose." Paragraph 00700.8.1.2 adds that all warranties begin the next day.
Count III cites Paragraph 00700.9.5.4 of the General Conditions. This paragraph requires the Design Builder, within ten days of receipt of payment from the Owner, to pay each Subcontractor, out of the amount paid to the Design Builder on account of the Subcontractor's Work, the amount to which the Subcontractor is entitled, less any retainage withheld by the Owner on account of such Subcontractor's Work.
Paragraph 00700.1.1.1 defines a Modification as an amendment to the Contract that is signed by both parties, a Change Order, a "written interpretation" issued by the Owner under Paragraph 00700.2.2.8, a "written order for a minor change in the Work" issued by the Owner, and a "Constructive [sic] Change Directive."
Paragraph 00700.13.1.1A defines a Change Order as a "written order to the Design/Builder signed by the Owner issued after execution of the Contract, authorizing a change in the Work or an adjustment in the Contract Sum or Contract Time." This provision warns, "The Contract Sum and the Contract Time may be changed only by a Change Order." Under Paragraph 00700.13.1.3, the cost or credit to the Owner may be determined by mutual agreement, unit prices, or costs plus a mutually acceptable fixed or percentage fee.
In addition to these options, Paragraph 00700.13.1.4 authorizes the Design Builder to proceed with Work that is
described by a written order. The compensation will be based on a determination of the Owner based on its analysis of the Design Builder's "itemized accounting . . . with appropriate supporting data" covering the cost of materials, cost of labor, bond premiums, rental value of equipment and machinery, and the additional cost of supervision and field office personnel directly attributable to the change. Paragraph 00700.13.1.4.1 limits the cost allowance for overhead and profit to no more than 15 percent of the net cost.
The meaning of a "written instruction" that may support a Modification is unclear because there is no Paragraph 00700.2.2.8. Other provisions under Paragraph 00700.2.1 discuss the authority of the School Board designee to interpret the Contract Documents, but do not suggest that such interpretations would constitute Modifications.
Paragraph 00700.13.2 addresses Construction Change Directives. According to Paragraph 00700.13.2.1, such a directive is a "written order signed by the Owner, directing a change in the Work and stating a proposed basis for adjustments, if any, in the Contract Sum or Contract Time, or both." Paragraphs 00700.13.2.3 and 00700.13.2.5 incorporate similar provisions to those discussed above in connection with Change Orders for determining the appropriate adjustment in the Contract Sum for a Construction Change Directive.
Paragraph 00700.13.4.1 provides that, if the Design Builder wishes to claim an increase in the Contract Sum, it shall give the Owner written notice within 20 days after the start of the occurrence of the event giving rise to the claim. Any change in the Contract Sum resulting from such a claim shall be authorized by a Change Order. Untimely claims are waived.
Other relevant provisions of the General Conditions deal with the School Board designee, through whom the Owner's instructions are transmitted to the Design Builder, according to Paragraph 00700.2.1.2. This paragraph states that the School Board designee has authority to act on behalf of the Owner only to the extent provided in the Contract Documents, "unless otherwise modified by written instruments in accordance with Subparagraph [00700.]2.2.15." The elusiveness of this provision--initially because the all-inclusive definition of the Contract Documents would likely capture any such written instrument--is reinforced by the nonexistence of Subparagraph 00700.2.2.15.
Paragraph 00700.2.1.3 advises that the School Board designee will visit the Site at appropriate intervals to familiarize himself with the progress and quality of Work and determine if the Work is proceeding in accordance with the Contract Documents. Paragraph 00700.2.1.3 requires the Design
Builder to inform the Owner of its progress by providing written monthly reports "defined as follows:." Nothing follows.
Paragraph 00700.2.1.4 states that the School Board designee "will not be responsible for the Design/Builder's failure to carry out the Work in accordance with Contract Documents," nor will the designee "be responsible for or have control or charge over acts or omissions of the Design/Builder
. . . ."
Paragraph 00700.2.1.6 states that, "[b]ased on the School Board designee's observation and an evaluation of the Design/Builder's Application for Payment," Respondent will recommend the amounts owing to the Design Builder and issue a Certificate for Payment of such amounts.
Paragraph 00700.2.1.7 identifies the School Board designee as the "interpreter of the requirements of the Contract Documents." The School Board designee has the authority to reject Work that fails to conform to the Contract Documents, according to Paragraph 00700.2.1.11, and he has the authority to determine the date of Substantial Completion, according to Paragraph 00700.2.1.13. However, the School Board designee may order only minor changes in Work and is authorized only to prepare Change Order Requests, as provided by Paragraph 00700.2.1.12. Paragraph 00700.2.1.9 states that, if the Project Manager cannot resolve any disputes relating to the execution or
progress of Work or interpretation of Contract Documents, the dispute shall be referred to the Director of Program Management.4/
Paragraph 00700.3.3.1 states that if the Design Builder "fails to correct defective work as required in Paragraph 00700.13.2 or persistently fails to carry out the Work in accordance with the Contract Documents, the Owner . . . may order the Design/Builder to stop the Work or any portion thereof until the cause for such order has been eliminated[.]" Paragraph 00700.13.2 does not address defective work or the failure to correct such work. However, Paragraph 00700.14.2.1 provides: "The Design/Builder shall promptly correct all Work rejected by the Owner as defective or as failing to conform to the Contract Documents whether observed before or after Substantial Completion and whether or not fabricated, installed or completed. The Design/Builder shall bear all costs of correcting such rejected Work."
Paragraph 00700.3.4.1 authorizes the Owner to correct any deficiencies in the Design Builder's Work if the Design Builder fails to carry out the Work in accordance with the Contract Documents and fails to commence corrections within seven days of the receipt of written notice of such failure.
Paragraph 00700.3.6.1 provides that a failure of the Design Builder "to make prompt payments to "
Unfortunately, the sentence, which appears at the bottom of page 00700-7, is never completed. At the top of the next page is the beginning of Paragraph 00700.3.6.2, which provides, among other things, that the failure of the Subcontractors to comply with the Contract Documents is a ground for the Owner to find the Design Builder in default.
Dealing with the Design Builder's failure to comply with the Contract Documents, Paragraph 00700.4.3.4 states: "The Design/Builder shall perform the Work in accordance with the Contract Documents and submittals approved pursuant to Paragraph 00700.4.11. Paragraph 00700.4.11.1 identifies Shop Drawings as drawings prepared by the Design/Builder or a Subcontractor to illustrate some part of the Work. Paragraph 00700.4.10.1 requires the Design/Builder to maintain onsite a copy of all Drawings, Specifications, Addenda, Change Orders, and Modifications "marked currently to record all changes made during construction."
Various provisions address the work schedule and progress payments. Paragraph 00700.4.9.1 requires the Design Builder to submit to the Owner a Construction Schedule, which must include at least three weeks for permitting of the Foundation, Shell, and Building. The Design Builder must promptly inform the Owner of any proposed change to the Schedule and revise the Schedule with ten days of Owner approval of such
change. Monthly progress payments will not be approved until the Owner receives required updates to the Schedule.
Paragraph 00700.4.9.3 requires the Design Builder to submit to the Owner, with each Application for Payment, a copy of the approved progress schedule marked to show the percentage completed for each part of the Work. The monthly submission must state the estimated total number of days that the Work is ahead of or behind the Contract Completion Date. This paragraph concludes:
Should the Design/Builder fail to meet the approved schedule, documentation acceptable to the Owner shall be required of the Design/Builder to show just cause for delays or for additional time requests. Failure to comply with this subparagraph shall be sufficient grounds for the Owner to find the Design/Builder in substantial default and certify that sufficient cause exists to terminate the Contract or to withhold Payment to the Design/Builder until an updated progress Schedule acceptable to the Owner is submitted. Such failure shall not be cause for additional time.
Paragraph 00700.9.3.1 requires the Design Builder to submit to the Owner an Application for Payment at least 14 days before the date of the sought progress payment. Prior to receipt of all payments after the first payment, the Design Builder must furnish to the Owner a Release of Lien/Verification of Payments proving that all labor and materials furnished through the date of the preceding requisition have been fully
paid, less any retainage. Paragraph 00700.9.4.1 states that, within three days of receipt of the Application for Payment, the Owner shall issue a Certificate for Payment or notify the Design Builder why it is withholding a certificate. Paragraph 00700.9.4.2 states that the Certificate for Payment constitutes a representation by the Owner that the Work has progressed to the point indicated on the Application and the quality of the Work is in accordance with the Contract Documents, subject to an evaluation of the Work for conformance with the Contract Documents upon Substantial Completion.
Paragraph 00700.9.5.1 requires the Owner to make monthly progress payments of 90% of the amount otherwise due within 11 days after issuance of the Certificate of Payment.
Paragraph 00700.9.11.1 requires the Design Builder, prior to receiving the Final Payment, to furnish to the Owner one complete set of drawings "indicating all construction changes."
Paragraph 00700.7.7.1 provides that Respondent's Building Department is the designated inspector of the Owner. The Building Department shall inspect the Work for compliance with the Florida Building Code and other legal requirements. The School District's designee shall inspect for compliance with the Contract Documents.
Several provisions deal with the Contract Time, in addition to those cited in Count II. Paragraph 00700.8.1.1.1 states that the Contract Time starts with the date of issuance of the Notice to Proceed. Paragraph 00700.8.1.1.3 states that the Final Completion Date of the Project is the date established by the Proposal unless amended by consent of the Owner. Paragraph 00700.8.1.2 states that the Date of Substantial Completion of the Work is the date certified by the Owner when the construction is sufficiently complete in accordance with the Contract Documents, so the Owner can use the Project for its intended purpose.
Paragraph 00700.8.3.1 provides that the Owner shall extend the Contract Time, by Change Order, for "such reasonable time as the Owner may determine" for any delays caused by the neglect of the Owner or Owner's subcontractor, Change Orders, or other justifiable cause. The Design Builder must present a claim for extension of time not more than 20 days after the commencement of the delay, or else the claim will be waived.
Paragraph 00700.8.4.1 provides for Liquidated Damages for failing to meet the Substantial Completion and Final Completion deadlines.
3. Special Conditions
As already mentioned, the Special Conditions is identified as Section 00830. These conditions apply directly to
the RFP process and are identified as part of the Contract Documents.
Count IV cites Paragraph 00830.1.4 of the Special Conditions. This paragraph incorporates, among other documents, the District Master Specifications. Likewise, Paragraph 00830.8.1 provides that the walkway covers will be constructed in accordance with the District Master Specifications, although it erroneously asserts that "[a] design criteria package is not applicable to this RFP." (Count IV's citation to "Article 2" is unclear, but unnecessary, as Paragraph 00830.1.4, as well as other provisions, incorporate the District Master Specifications into the Contract Documents.)
Paragraph 00830.2.3 states that Respondent intends to award a two-year contract, subject to a renewal of two years, to as many as four contractors, whose proposals in response to the RFP are ranked the highest by an evaluation committee.
Paragraph 00830.10.1 states that, as a prerequisite for final payment, the Design Builder must furnish the Owner with drawings of all "modifications, additions, deletions, etc. to construction which are at variance with or in addition to the information show on the original drawing," and all "modifications, additions, deletions, etc. to utilities, pipes, conduits, etc. for all site work and construction which are at
variance with or in addition to information shown on original drawings."
4. Supplementary Conditions
45. The Supplementary Conditions of the Contract for Design/Build is identified as Section 00850. None of these provisions is relevant to this case.
5. Walkway Cover Design-Build Criteria
The Aluminum Walkway Cover Design-Build Criteria Package (Design/Build Criteria) does not bear a section number. This document is attached to the RFP. (Respondent Exhibit 106)
Paragraph 1.C of the Design/Build Criteria states that Walkway Covers shall cover the existing or specified width of indicated sidewalks plus at least one foot on either side. Paragraph 1.E requires that designs must comply with SREF, the Florida Building Code, the District Master Specifications, the Design Criteria, and other materials. The District Master Specifications and Design Criteria are discussed below.
Paragraph 3 advises that Design Builders must provide enough information in their plans to be able to obtain Individual Building Permits. Paragraph 3.iii. warns, "This is a critical function in order to meet contract timeframes." Paragraph 3.iii.2. identifies the items for which the Design Builder may obtain approval from the Building Department prior
to bidding. These items include engineering and drawings for typical concrete foundations and light fixtures.
Paragraph 3.iii.4.a.i. requires the drawings to show all drainage discharge points from the walkway canopies. This provision adds: "If permitted, [the drainage discharge points] can discharge to a grassed area where there is an inlet that will route drainage to the storm sewer system. Otherwise the discharge must be collected by storm water leaders that directly discharge to the storm sewer system." Paragraph 3.iii.4.a.i.1 requires that all "storm water leader or collection design shall be clearly shown on the drawings."
Paragraph 3.ix. requires the Design Builder to "[f]inish the construction completion punchlists in a prompt and workmanlike manner. Restore work sites equal or better."
Paragraph 3.x requires the Design Builder to provide a simple Gantt chart illustrating a schedule of progress. The Design Builder must provide this schedule after the issuance of the Purchase Order and before the issuance of the Notice to Proceed. The schedule must show the design, the acquisition of the Building Permit, the fabrication of components, mobilization, foundation construction, the Covered Walkway installation, electrical/lighting construction, site cleanup and restoration, the Substantial Completion date, and a four-week
period for completion of the final punchlists and issuance of the Certificate of Completion.
Paragraph 3.xi. requires the Design Builder to provide a Schedule of Values after the issuance of the Purchase Order and before the issuance of the Notice to Proceed. The cost breakout must include Design and Permitting, fabrication, shipping and delivery, foundation construction, drainage construction, installation of covered walkway structures, installation of electrical and lighting features, and site restoration. Paragraph 3.xii. states that a PPE will accompany each progress payment. Paragraph 3.xiii. requires the Design Builder to provide Lien Releases for payments made in the previous progress payment.
Paragraph 4 provides details of the scope of Work.
Paragraph 4.i.10. requires the Work to include "[s]tormwater downspouts . . . with Concrete precast splash blocks where they are permitted to be used, or they shall be hard-piped to offsite discharge where necessary to avoid erosion and ponding issues on site." This provision adds that the latter option "may include construction of stormwater piping, yard drains and connection to existing drainage structures. . . . Positive drainage may be needed. . . . When drainage features are included, provide inlet and invert elevations and piping details."
Paragraph 4.iii. addresses Lighting. Paragraph
4.iii.2. requires a "minimum illumination of 2 footcandles on the sidewalks being covered, to be verified with charted photometrics and computations." Paragraph 4.iii.3 specifies that "Light Fixtures shall be Model number LVP 58-1 PL T42- 12/277-HPF-Prismatic-WHT-WET-AL or equal." This specification is for a fluorescent fixture. The Design Builder is required to install the lights so they are "securely mounted to the canopy columns." This provision concludes: "Provide a submittal for District acceptance before procuring."
Paragraph 4.vii. states that "Time is of the essence." This provision warns that Liquidated Damages are tied into the Contract Time, as set forth in the Purchase Order and Notice to Proceed.
Attached to the Design/Build Criteria is Attachment 1: "List of Items That Can Be Approved Prior to Bid." This form instructs each Design Builder to submit to the Building Department various items prior to bidding for particular projects--obviously, in an effort to expedite permitting. The listed items are the Demountable Anchorage System, which would permit the nondestructive relocation of columns as portable buildings are removed or relocated; engineering and drawings for columns, beams and decks, as well as all standard installation features and designs, so that a Design Builder would later only
have to submit drawings for site-specific improvements; the engineering and drawings for typical concrete foundations; and the proposed light fixtures and timers.
District Master Specifications and District Design Criteria
District Master Specifications
The District Master Specifications provides requirements for several elements of construction. Each element bears its own Section number, but each section also bears parenthetically a number in the format "xx xx xx," which format, as noted above, is used in Count IV. Except for the Section cited in the Count IV, citations to the District Master Specifications shall not include the parenthetical identification number.
Count IV cites Section 01540 (01 56 00) of the District Master Specifications. This Section addresses security barriers and enclosures. Section 01540 provides:
SECTION INCLUDES
Security Program
Entry Control
Personnel Identification
SECURITY PROGRAM
Protect work, existing premises, and Owner's operations from theft, vandalism, and unauthorized entry.
Initiate program in coordination with Owner's existing security system at project mobilization.
Maintain program throughout construction period until Owner acceptance precludes the need for Contractor security.
ENTRY CONTROL
Restrict entrance of persons and vehicles into Project site and existing facilities.
Allow entrance only to authorized persons with proper identification.
Maintain log of workers and visitors, make available to Owner on request.
Coordinate access of Owner's personnel to site in coordination with Owner's security forces.
PERSONNEL IDENTIFICATION
Provide identification badge to each person authorized to enter premises.
Maintain a list of accredited persons; submit copy to Owner on request.
For Earth Moving, Paragraph 02200.3.16.A requires the contractor to "[u]niformly grade areas to a smooth surface, free from irregular surface changes." Paragraph 02200.3.19.A states that the contractor must "[r]emove surplus satisfactory soil and waste material, including unsatisfactory soil, trash, and debris, and legally dispose of it off Owner's property."
For Storm Drainage Utilities, Paragraph 02700.1.1.C.1. requires the contractor to "[p]rovide storm water branches to roof leaders (8" dia. 1% min slope)."
For Sodding, Paragraph 02938.1.2.B states: "Unless otherwise indicated, the Contractor is responsible for the
repair of any existing low areas disturbed during the construction process."
For Walkway Coverings, Paragraph 10532.1.4.A. requires the contractor to submit "shop drawings including plans, elevations and details, with dimensions and grades, for approval by Architect." The architect is an employee of the Building Department.
For Summary of Work/Contractor Conduct on Campus, Paragraph 01010.1.3.B states: "Do not unreasonably encumber site with materials or equipment."
For Procedures for Payment, Paragraph 01027.1.3.C. requires the use of data from the approved Schedule of Values. Paragraph 01027.1.4.D requires the submittal of Release of Lien waivers.
For Contract Modification Procedures, Paragraph 01028.1.3.B. requires the contractor requesting a change in cost or time to provide sufficient data to support the request. Paragraph 01028.1.3.C lists data supporting computations as quantities of products, labor and equipment, taxes, insurance and bonds, overhead and profit, justification for any change to Contract Time, and credit for deletions from the Contract. Paragraph 01028.1.3.D lists supporting documentation for additional costs as the origin and date of the claim, dates and times that work was performed and by whom, time records and wage
rates paid, and invoices and receipts for products, equipment and subcontracts.
For Project Management and Coordination, Paragraph 01039.1.2.E requires the contractor to "[c]oordinate completion and clean up of Work of separate sections in preparation for Substantial Completion and for portions of Work designated for Owner's partial occupancy."
For Alteration Project Procedures, Paragraph 01120.3.6.A. requires the contractor to "[p]atch or replace portions of existing surfaces damaged, lifted, discolored, or showing other imperfections."
2. District Design Criteria
The District Design Criteria is sometimes referred to as the Design Criteria, but is not to be confused with the Design/Build Criteria. One of the sections, the Architectural Design Criteria, presents a broad set of criteria. Paragraph
I.A explains that the District Design Criteria and District Master Specifications are to inform the preparation of design and contract documents for particular projects.
Another section, the Electrical Design Criteria, presents a broad set of electrical criteria. Paragraph
II.B.3.a. requires at least two footcandles of lighting for walkway covers and canopies. Paragraph II.B.3.e. requires that
all exterior light fixtures be high-pressure sodium or metal halide.
D. Interpretation of Contract Documents
The various Contract Documents do not provide for the means by which to resolve any conflicts among the provisions of these various documents. The most notable such conflict in this case is between the specification of high-pressure sodium or metal halide5/ light fixtures in the District Design Criteria and the specification of fluorescent fixtures in the Design/Build Criteria. Among Respondent's employees, it is common knowledge that the documents that are more specific to a particular project control over more general documents that pertain to all projects. (Tr. 283, 1402, 3974). Thus, the Design/Build Criteria would control over the District Design Criteria.
Petitioner's Projects
For each of the 17 schools for which Petitioner submitted the lowest bid, Petitioner and Respondent entered into a brief Short Form Agreement, which states the Contract Price and various deadlines. For these 17 schools, the total Contract Prices exceeded $1.75 million.
In January 2010, the parties entered into Short Form Agreements for Binks Forest Elementary School (Binks) for
$51,280, Grassy Waters for $91,450, and Egret Lake for
$145,345.26.
In February 2010, the parties entered into Short Form Agreements for Spanish River for $233,439, Atlantic for $81,930, Jupiter Elementary School (Jupiter) for $18,748, Lighthouse for
$129,796, Limestone Creek for $147,469, Watkins for $145,097, Independence for $212,272, Jupiter Farms for $69,957, Olympic Heights High School (Olympic Heights) for $97,946, and Poinciana Elementary School (Poinciana) for $86,901.
In April 2010, the parties entered into Short Form Agreements for Lake Worth Middle School (Lake Worth) for
$135,982, Lantana Elementary School (Lantana) for $24,918, Indian Pines Elementary School (Indian Pines) for $81,628, and Crosspointe Elementary School (Crosspointe) for $40,292.
Based on the individual Short Form Agreements, the milestone dates for the submission of plans and drawings, the issuance of the building permit, and the installation of the
cover for the | 17 | projects | were | as follows | (all dates are in |
2010): | |||||
School | Drawings | Permit | Cover Installed | ||
Binks | February | 5 | March 15 | April 15 | |
Grassy Waters | February | 5 | March 15 | May 20 | |
Egret Lake Spanish River Atlantic | February March 31 March 31 | 5 | March 15 April 31 April 31 | May 31 June 31 June 31 | |
Jupiter | April 20 | May 20 | June 20 | ||
Lighthouse | April 20 | May 20 | June 20 | ||
Limestone Creek | April 20 | May 20 | June 20 | ||
Watkins | April 20 | May 20 | June 20 | ||
Independence | April 20 | May 20 | July 20 | ||
Jupiter Farms | April 20 | May 20 | July 20 | ||
Olympic Heights | March 31 | April 31 | June 31 |
Poinciana | March 31 | April 31 | June 31 |
Lake Worth | June 15 | July 29 | September 15 |
Lantana | June 15 | July 29 | September 15 |
Indian Pines | July 15 | August 29 | October 15 |
Crosspointe | July 23 | August 27 | October 5 |
For the purpose of this procurement, Respondent divided all of the schools in the walkway cover projects into various groups. The 17 above-mentioned schools were in six groups. Group 2 included Binks, Grassy Waters, and Egret Lake. Groups 5 and 6 included Atlantic, Olympic Heights, Poinciana, Spanish River, Watkins, Independence, Jupiter, Jupiter Farms, Lighthouse, and Limestone Creek. Groups 7, 8, and 9 included Lake Worth, Lantana, Indian Pines, and Crosspointe. As can be seen from the construction milestone dates listed in the charts immediately above and below, the three schools in Group 2 were the earliest projects, and the four schools in Groups 7, 8, and
9 were the latest projects.
Count I raises issues of Petitioner's site management and cleanup at Limestone Creek. Count II raises the issue of Petitioner's timeliness of construction at the previously identified Six Schools, which are within Groups 5 and 6.6/ Count III raises the issue of Petitioner's payment of a subcontractor and a supplier at an unspecified number of schools. Count IV raises an issue as to Petitioner's return of keys at Grassy
Waters, Egret Lake, Atlantic, Lighthouse, Limestone Creek, and an 18th school, Dwyer.
As noted in the Contract Documents, Respondent was to issue a Notice to Proceed as soon as Petitioner had submitted the necessary preliminary documentation for each project. As provided in the General Conditions and Owner-Design/Builder Agreement, the Contract Time for determining the Substantial Completion Date started with the issuance of the Notice to Proceed for each project.
On their face, the Notices to Proceed provide the following dates for Commencement, Substantial Completion, and Final Completion for the 17 projects (all dates are in 2010): School Commencement Substantial Final
Binks | March | 9 | July | 6 | August | 5 | |
Grassy | Waters | March | 9 | July | 6 | August | 5 |
Egret Lake | March | 9 | July | 6 | August | 5 | |
Spanish River | March | 9 | July | 30 | August | 29 | |
Atlantic | March | 9 | June | 30 | July 30 | ||
Jupiter | March | 9 | June | 28 | July 28 | ||
Lighthouse | March | 9 | July | 16 | August | 16 | |
Limestone Creek | March | 9 | July | 16 | August | 16 | |
Watkins | March | 9 | July | 15 | August | 14 | |
Independence | March | 9 | July | 28 | August | 27 | |
Jupiter Farms | March | 9 | July | 12 | August | 12 | |
Olympic Heights | March | 9 | July | 13 | August | 12 | |
Poinciana | March | 9 | June | 29 | July 29 | ||
Lake Worth | June 14 | September | 14 | October 14 | |||
Lantana Indian Pines Crosspointe | June 13 July 14 July 14 | September October 5 September | 13 29 | October 13 November 4 October 29 | |||
As shown on this chart, the approximate duration of construction--following the receipt of a building permit--was
90-120 days. The preliminary documentation that resulted in the issuance of a Notice to Proceed did not include the drawings and plans on which a Design Builder would obtain a building permit for a particular project. Each Design Builder submitted these drawings and plans after the Commencement Date, as discussed in more detail below. As noted below, the Building Department was expected to take about 30 days to act on the drawings and plans. If a Design Builder were prepared to submit the drawings and plans at or a few days after the Commencement Date and, assuming that the drawings and plans were adequate to support the issuance of a building permit without the submittal of any revisions, the Design Builder would therefore have a building permit and could begin construction a little more than one month after the Commencement Date. For all but the last four projects, if Petitioner had obtained building permits in four or five weeks after Commencement, it would have had about three months to reach Substantial Completion on all but two of the projects and another month to reach Final Completion on all of the projects.7/
Respondent's Main Personnel and Departments
At the time of the hearing, James Kunard was the director of the Facilities Services Department; at the time of the events in question, Mr. Kunard was the general manager of the Facilities Services Department. The director of the
department was Martin Mets. Mr. Kunard directly supervised Terrence Bailey, who was the project manager for the walkway cover projects. Mr. Kunard and Mr. Bailey directly supervised the Facilities Management Coordinators, who served as the liaisons between the school principals and the Facilities Services Department. Although herself a Facilities Management Coordinator, Dorothy Banaszewski generally supervised the other coordinators because of her education in civil engineering, her licensing as a professional engineer, and her superior experience in construction.
At the time in question, as previously noted, Ms. Swan was the director of the Purchasing Department. Additionally, Thomas Hogarth was the director of the Building Department, and Robert Upson was a professional engineer in the Project Controls Department. Supervising Mr. Kunard, Ms. Swan, Mr. Hogarth, and Mr. Upson was Joseph Sanches, who was the Chief of Support Operations. Mr. Sanches' supervisor was Joe Moore, who was the Chief Operating Officer.
After executing Owner-Design/Builder Agreements with each of the Design Builders, the Facilities Services Department prepared the Design/Build Criteria to provide the Design Builders with the basic information necessary for them to price individual jobs in the course of preparing bids.
Ms. Banaszewski conducted mandatory prebid site visits so that the Design Builders could acquaint themselves with the sites on which they would be bidding. During these visits,
Ms. Banaszewski gave the Design Builders site plans showing the locations of the walkways to be constructed and where they would connect to existing buildings, as well as floor plans indicating the location of electric closets and energy management system devices. Ms. Banaszewski and Mr. Kunard also described the early phases of the walkway cover projects, including such critical matters as that the Building Department would require
30 days to examine applications and issue building permits.
After the commencement of construction, the Facilities Services Department assumed a wide range of duties, including monitoring the work, enforcing the Contract Documents, processing Change Orders, preparing punchlists and monitoring their completion, and pursuing liquidated damages.
Operating autonomously from Respondent's other departments, the Building Department had three discrete tasks in connection with the walkway cover projects.
First, the Building Department issued building permits after assuring that the proposed construction, as evidenced by the drawings and other documentation submitted to the Building Department, conformed to the Florida Building Code, the District Master Specifications, and the District Design Criteria.
In issuing building permits, the Building Department might examine plans for compliance with the Design/Build Criteria, but the primary responsibility for this review was with the School Board Designee. Because of the absence of a School Board Designee, ultimate responsibility for ensuring compliance with the Design/Build Criteria was with the Facilities Services Department.
Second, the Building Department issued any stop work orders for work that did not conform to the drawings and other documentation on which a permit was based.
Third, marking Final Completion, the Building Department issued a certificate of completion (CC) after determining that the construction conformed to the Florida Building Code and other applicable law, as well as the approved plans and drawings.
The Building Department's issuance of a CC is not conditioned on the Design Builder's completion of any punchlist, unless a punchlist item raises an issue of compliance with the Florida Building Code or other law or compliance with the approved plans and drawings. In coordination with the principal of the school, the Facilities Services Department prepares a punchlist when the job reaches Substantial Completion. Substantial Completion occurs when Respondent is able to take beneficial possession of the improvements.8/ The job of ensuring
the completion of the punchlist falls to the Facilities Services Department, so the incentive for the Design/Builder to complete the punchlist is not the obtaining of a CC, but the payment of the retainage and avoidance of a determination of delinquency or a suspension of its certification to bid on Respondent's projects.
The Purchasing Department manages the purchasing of goods and services, including construction work. The Purchasing Department conducts solicitations, but only at the request of schools or other departments. After concluding the procurement process, the Purchasing Department turns over the duties of contract management to the Facilities Services Department, although the Purchasing Department remains available to provide support to the Facilities Services Department, as requested.
Early in the walkway cover projects, Mr. Kunard and Ms. Swan discussed in detail how to structure the procurement of the necessary work. These discussions included the allocation of the schools with urgent needs to Walker under its existing design/build contract, and the use of new design/build contracts for work on the remaining schools.
As will be seen below, the Purchasing Department must also approve change orders proposed by the Facilities Services Department. Thus, the Purchasing Department retains the ability to prevent the Facilities Services Department from agreeing to
the purchase of additional work from a Design Builder, even if the related work is related to the work for which Respondent has already contracted.
The Project Controls Department also exercises responsibilities as to change orders. The Project Controls Department is an independent watch-dog department whose financial-accountability responsibilities include assisting the Facilities Services Department in determining fair and reasonable costs for change orders. Mr. Upson provided assistance in these matters to Mr. Kunard.
Timeframes of Counts I-IV
The timeframe of Count II spans much of the time period covered by this case, which starts in first half of 2009. The timeframe of Count III starts in the summer of 2009, as the alleged claims of the supplier and subcontractor arose during this period. The timeframe of Count I covers most of the time period covered by this case. The timeframe of Count IV extends over the period that starts with the completion of work at the earliest schools to be finished.
Count II: Timeliness of Construction at Spanish River, Watkins, Lighthouse, Limestone Creek, Independence, and Jupiter Farms
Permitting
As noted above, the milestones for drawings and permitting for five of the Six Schools are the same: April 20
and May 20, respectively. For Spanish River, these milestones are March 31 and April "31," respectively. The deadlines for Substantial Completion for the Six Schools ranged from
July 12-30, 2010, and the deadlines for Final Completion for the Six Schools ranged from August 12-29, 2010.
Slippage occurred immediately, as Petitioner did not timely submit drawings to the Building Department for any of the Six Schools. For Spanish River, Petitioner submitted drawings on April 27, 2010--about four weeks late. For the remaining five schools, Petitioner submitted drawings on May 27, 2010-- about five weeks late.
The main reason for the loss of time was probably that Petitioner's aluminum walkway subcontractor unexpectedly discontinued business in the first quarter of 2010. According to the minutes of a meeting that took place on March 4, 2010, Hydn Rousseau, the president of Petitioner, and Ed Vlock, the construction manager of Petitioner's walkway cover projects, discussed this development with Mr. Kunard and Mr. Bailey.
Mr. Kunard warned that there would be financial consequences if Petitioner tried to back out of its contractual obligations.
According to the minutes, Mr. Rousseau and Mr. Vlock assured Mr. Kunard they intended to perform their obligations under the contracts, but needed the help of the Facilities Services Department to urge the Building Department to expedite
the issuance of building permits. This request was premature. As noted above, from the time of this meeting, nearly eight weeks would pass before Petitioner would submit its first set of plans and drawings--for Spanish River--and 12 weeks would pass before Petitioner would submit the plans and drawings for the other five schools.
The minutes document an alternative proposed by Respondent's representatives: for each project, Petitioner could request an extension of the Contract Time, free of liquidated damages, as long as the Contract Price did not change and the construction was completed before school started in August. The minutes note: "[Petitioner] will consider this, noting that it is juggling the timing of projects to ensure profitability." This is an early appearance of Respondent's concern with time juxtaposed with Petitioner's concern with costs.
However, Petitioner accepted Respondent's offer. By letter dated March 4, 2010, regarding the "Design/Build of Aluminum Walkway Covers," Petitioner asked for an extension of the time stated in "the" Notice to Proceed due to the need to substitute Perfection Architectural Services (Perfection) as the new aluminum walkway subcontractor "for Projects related to RFQ awarded on November 3, 2009." This reference suggests that the request is for all 17 projects. The March 4 letter states that
work will start by June 5, 2010, and will be complete prior to the resumption of school on August 17, 2010. The letter states that Petitioner will honor its bid prices, but asks for a waiver of liquidated damages for any delay.
By undated memo from Mr. Bailey to Petitioner, Respondent granted the request to substitute Perfection for the former aluminum walkway subcontractor. The memo requests a revised schedule of completion of work and states that all construction must be completed by August 1, 2010. The memo concludes that Respondent will issue a Notice to Proceed on receipt and acceptance of the revised schedule. Although
Mr. Bailey uses the singular form, it is likely that he meant to refer to all 17 of Petitioner's projects.9/
But for the problem with the original aluminum walkway subcontractor, confusion caused by Respondent's representatives might have caused some delay in the start of Petitioner's projects. In early April 2010, Shams Moghadam, a professional engineer assigned to Respondent's Building Department, met with Malcolm Cooper, a civil engineer employed by the civil engineering consultant hired by Petitioner. In this meeting, Mr. Moghadam "confirmed" to Mr. Cooper that Petitioner was prohibited from mounting light fixtures on wet columns, which are those columns that support drainage conduits routing stormwater from walkway canopies to in-ground drainage
features. By email dated April 12, 2010, to Mr. Moghadam, as well as Mr. Rousseau and Mr. Bailey, Mr. Cooper documented this communication.
According to Mr. Moghadam, Mr. Cooper stated that he did not want to locate light fixtures on wet columns. This is Mr. Cooper's recollection, as well. (Pet. Ex. 233, p. 81) But the process by which Mr. Cooper's preference became Respondent's prohibition is unclear.
Two things are clear, though. First, wet columns may support light fixtures without posing any increased risk of electrocution; for many years, Respondent has allowed this practice at its schools. Second, by his own admission,
Mr. Moghadam never contacted Mr. Cooper to "correct" the prohibition stated in his April 12 email. This failure by Mr. Moghadam led to Respondent's implementation of the prohibition and its label in this recommended order as the Moghadam Prohibition.
The Moghadam Prohibition had a significant impact on the lighting design of a project. Generally, every other column was wet, so the prohibition against locating light fixtures on wet columns removed half the columns as locations for light fixtures. A Design Builder suddenly found itself with the challenge of meeting the existing criteria of two footcandles at ground level using a specified fixture of a specified wattage or
an approved substitute--all while meeting the new criterion of the Moghadam Prohibition.
Mr. Moghadam seems to have been aware of the difficulties in satisfying all these criteria. Mr. Cooper's April 12 email continues:
Shams suggested considering the same fixture but with two 26 Watt bulbs, rather than a single 42 Watt bulb.[10/] See attached technical data sheet Lamp No. 2PLC26. You will therefore need to revise the photometric analyses for Groups 2 and 4, as a priority, avoiding the wet columns meeting the 2 foot candle minimum criterion. We can then incorporate these changes on our electrical drawings along with any . . .
Building Dept. comments, which we may receive, in the same revision.
As is evident from these comments, the timing of the Moghadam Prohibition affected the timing of the plans and drawings for the first three schools, which are in Group 2, rather than any of the Six Schools. Mr. Cooper believed that the lighting changes necessitated by the Moghadam Prohibition, if done promptly, could be incorporated into any revisions required by the Building Department to issue the building permits for the three schools in Group 2 and posed little, if any, impact in terms of timing on the remaining schools, including the Six Schools.
Mr. Cooper was right. The Moghadam Prohibition had no significant impact on the timing of the Six Schools. As of
April 12, Petitioner still had eight days until the milestone of submitting drawings for five of these schools. For Spanish River, the milestone had passed on March 31--unmet due to reasons, such as the loss of the original aluminum walkway subcontractor, having nothing to do with the as-yet-undeclared Moghadam Prohibition. As indicated below in the discussion of the early phase of the Spanish River project, the time spent in incorporating design changes necessitated by the Moghadam Prohibition likely amounted to no more than ten days.
Unsurprisingly, due to Petitioner's late submittals of plans and drawings, the building permits were also late-- through no fault of Respondent. The Building Department issued the building permit for Spanish River on June 8, 2010. The milestone for this permit was April "31"--i.e., May 1. The Spanish River project, which was behind by 27 days when Petitioner submitted the plans and drawings, was now behind by
38 days. The Building Department withheld approval of the initial drawings because, among other things, they failed to depict the connection of proposed drainage pipes to existing pipes and failed to specify all main drainage leader sizes and lengths--deficiencies that were not corrected until June 28--20 days after the Building Department issued the permit. The criticality of these missing items emerges below in the
discussion of the stop work order that was later issued at Limestone Creek.
The Building Department issued the building permits for Lighthouse, Limestone Creek, Watkins, Independence, and Jupiter Farms--the remaining five schools of the Six Schools--on June 24, 2010. The milestone for these permits was May 20. These five projects, which were behind by 37 days when Petitioner submitted the plans and drawings, were now behind by
35 days.
The Facilities Services Department employees urged the Building Department to issue permits, even in the face of missing items. In June, Mr. Kunard and Ms. Banaszewski offered Mr. Hogarth any and all assistance necessary to expedite the issuance of the building permits. By email dated June 23, 2010, to Mr. Hogarth, Ms. Banaszewski stated that Petitioner "is geared up and ready to roll. They have been installing at an incredible rate. They feel they can still meet their completion dates if they have permits this week. We are very anxious for them to proceed because they can move much more quickly during the summer when school is not in session."
Later the same day, Victor Chodora, an architect in the Building Department, noted that the plans for Watkins, Independence, Jupiter Farms, and Lighthouse were missing drainage details--again, as noted below, items that turned out
to be important regarding the stop work order described below. Trying to expedite the permits, though, Mr. Chodora stated: "I suggest that [Petitioner] at least send email indicating that revised plans addressing the [missing] items will be submitted and approved prior to the first inspection for underground drainage. With the understanding that [for] the next project the items need to be addressed before permit."
Yielding to the pressure brought to bear by the Facilities Services Department, later on the same day,
Mr. Hogarth emailed Mr. Kunard: "I will issue the permits subject to the following condition: [Petitioner] first must send me a message accepting the plan review comments and agreeing to submit revised drawings and obtain approval prior [to] calling for the first inspection." By email to Mr. Hogarth at 7:35 a.m. the next day, Mr. Vlock accepted the conditions and thanked Mr. Hogarth for his consideration in this matter. It is only for these extraordinary efforts and accommodations of the Building Department that Petitioner obtained the building permits for the Six Schools as soon as it did.
Attempting to reinforce an element of uniformity on the aluminum walkway cover projects, on May 25, 2010, Mr. Bailey sent an email to the principals of all four Design Builders, including Mr. Rousseau and Mr. Vlock. In its entirety, the email states:
[A]s I inspect the projects in construction I will be taking special note [of] a few of the specific design criteria that we have outlined on each project, i.e., no splash block and all drainage connected with 8" minimum pipes except at parent drop off and bus loops, No High Pressure Sodium Lights, demountable column footings, and no lights on wet columns. If you have a project under this current contract that may have missed my eye while reviewing your drawings for these issues please review and revise the design accordingly as this will not be acceptable at final inspection.
In a note to Mr. Moghadam and Patrick Joyce, a civil engineer in the Building Department, Mr. Bailey asked for the assistance of the Building Department to ensure that these criteria were met as projects proceeded through the Building Department's periodic inspections. This seemingly innocuous email is interesting for three reasons.
First, Mr. Bailey is acknowledging that he may have missed noncompliances in Design Builders' plans and drawings. As noted above, Petitioner's plans and drawings for Spanish River had been submitted one month earlier, and its plans and drawings for the remaining five schools were submitted two days after the issuance of Mr. Bailey's email.
Second, even though the Building Department is not responsible for this task, Mr. Bailey tried to enlist its aid in ensuring that the work conformed to the Design/Build Criteria and such additional requirements, such as the Moghadam
Prohibition--even if such assistance were provided as late as the point at which the project is otherwise eligible for a CC. Third, Mr. Bailey provided a clear statement that the lighting was not to be high-pressure sodium and the drainage pipes were to be 8" in diameter.11/
In response to his copy of Mr. Bailey's May 25 email, also by email dated May 25, Mr. Kunard advised the Design Builders, including Mr. Rousseau and Mr. Vlock, that Respondent had required light fixture "Model number LVP 58-1 PL T42- 120/277-HPF/Prismatic-WHT-WET-AL or equal. . . . Provide a submittal for District acceptance before procuring."
Mr. Kunard's repetition of the Design/Build Criteria requirement of a 42-watt fluorescent bulbed fixture regrettably fails to respond to Mr. Cooper's statement that Mr. Moghadam had suggested two 26-watt bulbs in place of a single 42-watt fixture. Perhaps Mr. Bailey had failed to copy his supervisor, Mr. Kunard, with Mr. Cooper's email.
By email dated July 26, 2010, to the Design Builders, including Mr. Rousseau and Mr. Vlock, as well as Mr. Kunard and Ms. Banaszewski, Mr. Bailey noted that a contractor had proposed a different light fixture from the 42-watt fluorescent lamp specified in the "RFP." The contractor had proposed an 85-watt fluorescent lamp, and Respondent had accepted the change to avoid delaying the projects. The email allows all Design
Builders to use this fixture because its use reduces the number of required light fixtures, even though the fixture "does not look as ecstatically as pleasing."
Mr. Bailey's etymological innovation aside, this email illustrates two principles of later importance in this case: first, it is an example of Respondent's treating all contractors fairly by notifying all of them of the option of using this cheaper solution to the lighting design; and second, it is an example of Respondent's recognition of the need for expediting construction to outweigh other considerations--here, aesthetics.
The force of the first principle, though, is somewhat attenuated by the apparent fact that Respondent had approved the single 85-watt solution two months prior to informing other contractors that this was an option. As is true of much else in their discharge of contract-management responsibilities in this case, Respondent's representatives appear to have failed to have advised other Design Builders of the availability of the 85-watt solution due to mere neglect, not favoritism.
Summer 2010: Construction Activity
Petitioner's pay applications approximate the progress of Petitioner's work. With each pay application at each job, Petitioner represented the extent to which it had completed the work by type, such as site drainage or concrete.
The record does not disclose any disputes concerning these pay applications, so they are suitable guides to Petitioner's progress on each job. During the early phase of construction, Respondent issued PPEs coinciding with the submittal of the pay applications; Respondent later discontinued the issuance of PPEs.
Petitioner started actual construction first at Spanish River among the Six Schools. The first pay application that Petitioner submitted for Spanish River is dated April 13, 2010. The payment application seeks full payment for bonds and insurance premiums and structural drawings, but not the civil and electrical drawings being prepared by Mr. Cooper's civil engineering firm.
Ten days later, on April 23, Petitioner submitted its second pay application for Spanish River. This application includes the charge for the civil and electrical drawings-- suggesting that Mr. Cooper was able to incorporate the Moghadam Prohibition in the 10-day interval between the first and second pay applications. (Likely, if it could have done so, Petitioner would have included these drawings in the initial pay application because it did so with the remaining five schools when it submitted their initial pay applications in mid-May, as detailed below.)
On May 3, 2010, Ms. Banaszewski issued a PPE for Spanish River and assigned Petitioner an average score of 2.8. A "0" is "unacceptable, a "1" is "poor," a "2" is "satisfactory," a "3" is "good," and a "4" is "excellent." Petitioner's lowest score, a 2, was for scheduling and coordination. On May 25, Ms. Banaszewski issued PPEs for the other five schools; the average scores and scheduling and coordination scores for these five schools were the same as for Spanish River.
On May 14, 2010, Petitioner submitted its initial pay applications for four of the other five schools. For Watkins, the date of the first pay application is April 13, 2010. Petitioner submitted its third pay application for Spanish River on June 10, 2010. At this point, although work at Spanish River was further along than at the other five schools, Petitioner largely synchronized the submittal of pay applications for the Six Schools for the remainder of the summer.
The following chart reflects the pay applications submitted on May 14 (April 13 for Watkins and June 10 for Spanish River), July 31, and September 1 (except for Jupiter Farms, for which Petitioner submitted no pay application between July 31 and October 1).12/ Under each date column, the dollar amount represents the value of the work billed on that date, and the percentage represents the percentage of work remaining. The
percentage of work remaining reflects the work already billed plus the value of stored materials.
General Conditions | $5205-70% | $6246-34% | $5899--0% |
Site Drainage | $2968-70% | $5934-10% | $991--0% |
Concrete | $13,500-70% | $31,500-0% | done |
Aluminum Walkways | $10,212-70% | $1506-69% | $11,750-7% |
Electrical | $2235-70% | $745-60% | $0-60% |
School May 14 July 31 September 1 Spanish River
Watkins
General Conditions | $0-100% | $5021--28% | $1000--14% |
Site Drainage | $0-100% | $5603---0% | $0---0% |
Concrete | $0-100% | $21,978--0% | $0---0% |
Aluminum Walkways | $0-100% | $23,656--0% | $0---0% |
Electrical | $0-100% | $8640--40% | $4608---8% |
Independence General Conditions | $0-100% | $6640--58% | $6165-29% |
Site Drainage | $0-100% | $9396---0% | done |
Concrete | $0-100% | $48,000--7% | $0-7% |
Aluminum Walkways | $0-100% | $4269--25% | $25,002-0% |
Electrical | $0-100% | $2462--67% | $2462-37% |
Limestone Creek General Conditions | $0-100% | $1500--83% | $3322-44% |
Site Drainage | $0-100% | $0--100% | $3648-20% |
Concrete | $0-100% | $0--100% | $27,145-13% |
Aluminum Walkways | $0-100% | $3090--23% | $0-23% |
Electrical | $0-100% | $0--100% | $7208-60% |
Lighthouse | |||
General Conditions | $0-100% | $3000--68% | $1100-57% |
Site Drainage | $0-100% | $0-100% | $4889--0% |
Concrete | $0-100% | $0-100% | $11,818-50% |
Aluminum Walkways | $0-100% | $2587--26% | $0--26% |
Electrical | $0-100% | $0-100% | $7840-60% |
Jupiter Farms General Conditions | $0-100% | $1200--79% | no pay app. |
Site Drainage | $0-100% | $0-100% | no pay app. |
Concrete | $0-100% | $0-100% | no pay app. |
Aluminum Walkways | $0-100% | $1493--26% | no pay app. |
Electrical | $0-100% | $0-100% | no pay app. |
The June 10 pay application for Spanish River incorporates Change Order #1: to avoid incurring sales tax, Respondent would pay Perfection directly the $119,000, less sales tax, scheduled to be paid this subcontractor for aluminum fabrication and installation. Change Order #1 reduces the Contract Price by this amount, less sales tax. This process is referred in the record to as a Direct Purchase Order (DPO). The July 31 pay application for Spanish River incorporates Change Order #2, which reduces the Contract Price by the sales tax avoided through the use of the DPO. On July 23, 2010, Respondent and Petitioner entered into Change Order #3, which is for additional canopies that were required when Respondent was forced to alter its sidewalks at Spanish River due to requirements of the Americans with Disabilities Act. Change Order #3 added about $14,000 to the Contract Price, but did not extend the Contract Time.
The PPEs for Spanish River reflect Respondent's satisfaction with Petitioner's work. A PPE for Spanish River dated June 30, 2010, assigned 3.5's in all categories. Another PPE dated July 27, 2010, assigned 3.2's for the average score and for scheduling and coordination.
The July 31 pay applications for the remaining five schools disclosed the use of DPOs to pay Perfection at these schools, as reflected in Change Order #1 and #2 for all schools
but Lighthouse. (Lighthouse's change orders were numbered differently due to the presence of two change orders for additional work not relevant to this case.)
On July 27, 2010, Respondent issued PPEs for Watkins and Independence with nearly identical scores. At Watkins, Petitioner earned an average score of 2.9 and a score of 3.0 for scheduling and coordination. At Independence, these respective scores were 3.0 and 2.8. Other PPEs at this time are not included in Respondent Exhibit #67.
On August 31, Respondent issued PPEs for Independence, Lighthouse, and Limestone Creek. The average score for Independence was 3.7 with 3.5 for scheduling and coordination. The average score for Lighthouse was 3.3 with 3.0 for scheduling and coordination. The average score for Limestone Creek was 3.4 with 3.3 for scheduling and coordination, 3.5 for project management, and 3.0 for customer sensitivity. The latter scores were improvements on the same scores issued for this school--and all the others--on May 25, 2010, when Petitioner earned a 2.5 for project management and a
2.3 for customer sensitivity.
Summer 2010: Meetings Between Petitioner and Respondent
As spring wore into summer, Petitioner continued to show little regard for the Contract Times applicable to the Six
Schools. Despite the early loss of five weeks' time on jobs whose duration was only 90-120 days, nothing in the record discloses any concerns among Petitioner's representatives about the increasingly likely prospect that they would not achieve timely Substantial Completion and Final Completion for the Six Schools.
At a meeting on June 10, 2010, with Mr. Kunard, Mr. Bailey, Ms. Banaszewski, and others apparently from the Facilities Services Department, Mr. Rousseau and Mr. Vlock addressed costs, not time. Mr. Vlock and Mr. Rousseau complained that Respondent was not dealing fairly with Petitioner. Specifically, they claimed that Respondent had allowed Walker to design drainage with a structural engineer,
rather than a civil engineer, and they wanted to know if a civil engineer was required by the Building Department. Respondent's representatives logically suggested that Mr. Rousseau and
Mr. Vlock take this question to the Building Department, but Mr. Rousseau declined, expressing a fear of reprisal from the Building Department.
The Facilities Services Department representatives assured Mr. Rousseau and Mr. Vlock that the Building Department representatives were professionals and would not seek retribution against Petitioner for such inquiries. The Facilities Services Department staff added that the design/build
method allowed Design Builders some flexibility in approaching design matters. They noted that Walker had been designing walkway covers for decades and Petitioner was new to the industry, implying that Walker might find the process easier to navigate.
Petitioner's representatives countered that their civil engineer cost them $4000 for each job, and this expenditure made them uncompetitive. Petitioner's representatives asked to change its design submittals so it could be competitive. The minutes state that Respondent's representatives replied "that submittals only need to meet minimum requirements."
This complaint of unfair treatment is groundless for the reasons stated at the time by Respondent's representatives.
Additionally, the claim of competitive harm arising from the employment of a civil engineer is unpersuasive. Much more than $4000 separated each of Petitioner's winning bids from each of Walker's bids, at least for the projects as to which such information is available. For the Group 6 schools--Jupiter Farms, Limestone Creek, Jupiter, Lighthouse, Independence, and Watkins--a bid tabulation appears in Respondent Exhibit #62.
For Jupiter Farms, Petitioner's bid of $74,818 was more than
$10,000 less than the next lowest bid--Walker's bid of $85,421. For Limestone Creek, Petitioner's bid of $157,410 was almost
$8000 less than the next lowest bid--Walker's bid of $165,341. For Lighthouse, Petitioner's bid of $148,427 was more than
$30,000 less than the next lowest bid--Pirtle's bid of
$179,312--and more than $50,000 less than Walker's bid of
$198,650. For Independence, Petitioner's bid of $225,398 was more than $20,000 less than the next lowest bid--Walker's bid of
$247,003. For Watkins, Petitioner's bid of $160,087 was more than $9000 less than the next lowest bid--Pirtle's bid of
$169,183--and almost $22,000 less than Walker's bid of $181,897. For Jupiter, which is the only one of these six projects for which less than $4000 separated Petitioner's bid ($19,852) from the next lowest bid--Walker's bid of $21,784--the contention that the savings associated with using a structural engineer instead of a civil engineer would have saved 25% of the entire, relatively modest contract price cannot be credited.
This claim of unfair treatment, though, dramatically underscores Petitioner's concern with costs, not time. Except for an apparently minor matter involving a possible patent infringement, which may have caused a delay of a "few days," nothing discussed at the June 10 meeting addressed the significant delays that already existed at the start of construction at the Six Schools.
Petitioner's proposal that it resubmit its drawings and plans--somehow, to avoid the added cost of a civil
engineer--would have thrown all Six Schools further behind schedule. At this point, as noted above, Petitioner had just received a building permit for Spanish River, where it was already 38 days behind schedule. Even if Petitioner could have submitted new drawings and plans on June 10, this submittal would have added another 30 days to this deficit, leaving Petitioner two months behind schedule. For the remaining five schools, for which the drawings had been submitted only two weeks earlier and no permits had yet issued, the additional delay would have been about 16 days and would have resulted in a total of about 50 days behind schedule for each of these projects.
For their part, the Facilities Services Department employees do not seem to have seriously entertained the prospect of the resubmittal of plans and drawings, but instead recognized the emerging time issues and tried to spare Petitioner the consequence of its tardiness. As already noted, at this time, Facilities Services Department employees contacted the Building Department and urged expedited processing of the pending permit applications.
On July 15, 2010, Mr. Kunard sent a certified letter (and email) to Mr. Rousseau advising that it appeared that Petitioner would not be able to complete on schedule the work at nine schools, including, among the Six Schools, Watkins, Jupiter
Farms, Lighthouse, and Limestone Creek. The letter reminds Petitioner of the provisions for liquidated damages in the General Conditions and advises that, if Petitioner feels an extension of time were justified, it should submit the information required by Paragraph 00700.8.3. The letter concludes by requesting an explanation or a submission of a recovery schedule for how Petitioner intended to meet the time requirements of the Contract Documents.
On July 15, 2010, Mr. Rousseau submitted a letter to Mr. Kunard acknowledging receipt of his letter. Mr. Rousseau's letter states that, at a June 30 meeting involving the Building and Facilities Services departments, as well as Petitioner, "all questionable design issues were resolved, standardized, and documented." Mr. Rousseau's July 15 letter proceeds with the request for an extension of time. In its entirety, the request states: "At this time we are requesting an extension." The letter invites Mr. Kunard to contact Mr. Rousseau or Mr. Vlock if Mr. Kunard has any questions or requires additional information. The letter discloses that Mr. Rousseau had not bothered to read the provision of the Contract Documents to which Mr. Kunard's email had referred him.
The next day, by letter dated July 16, 2010, to Ms. Swan, Mr. Rousseau requested that Respondent place Petitioner on an early-payment program. The program would
provide Respondent with a .75% discount for payments of payment applications within five days of receipt, which, as noted above, is six days fewer than the 11 days allowed by the Contract Documents. Respondent appears to have paid ensuing pay applications within this timeframe whenever circumstances permitted. Contrary to Petitioner's later contention, this election by Petitioner did not amend the Contract Documents so as to obligate Respondent to pay with five days of receipt of pay applications.
By email dated September 8, 2010, to Mr. Rousseau and Mr. Vlock, Mr. Kunard asked if they had submitted a request for an extension of time with justification, as required by the General Conditions. This letter implicitly informs Mr. Rousseau that his July 15 email was not such a request. Mr. Kunard's email identifies five schools that had been late, including Watkins, Jupiter Farms, Lighthouse, and Limestone Creek, and three more schools, including Spanish River, that were now late.
Stop Work Order
On August 27, 2010, Building Department plumbing inspector Dwayne Betts inspected the Limestone Creek work site and found that Respondent had installed 3" drainage pipes of 40- 50' in length where its approved drawings had specified 8" drainage pipes. Mr. Betts failed the work for its noncompliance
with the approved plans. Mr. Betts expected Petitioner to call for a reinspection, but it did not do so.
On September 8, 2010, Mr. Betts revisited the Limestone Creek work site for another inspection and found that Petitioner had not corrected the noncompliant work. Mr. Betts described the situation to his supervisor, Terry Summerell, who is the senior construction inspector in the Building Department. Mr. Summerell advised Mr. Betts to issue a stop work order. No one in the Building Department notified Mr. Kunard that Petitioner's Limestone Creek project was about to receive a stop work order, and Mr. Kunard was initially unaware of its issuance. (Tr. 1490)
On September 8, 2010, evidently at the request of Mr. Betts, the Building Department issued a stop work order on the Limestone Creek site. The stop work order states at the top
in boldface: "STOP WORK." The next line states: "The work now in progress is in violation of the following code: "
Following this language are five boxes. The issued order shows a check in the box beside "plumbing." For corrective action, the issued order advises any interested person to contact
Mr. Hogarth.
The parties dispute whether the issued order prohibited all work at the Limestone Creek work site or prohibited only further plumbing work at the Limestone Creek
work site. Petitioner is correct that the issued order prohibited all further work. The top of the notice states unconditionally to stop work. The explanation for the order is that the work underway violates the plumbing code, but this explanation does not limit the scope of the unconditional command at the top of the notice.
Two days later, on September 10, Building Department structural inspector, Adrian Morse, inspected the Limestone Creek work site and noticed that the boots of wet columns varied from the approved drawings. He failed this work too. Although this action would provide additional support for the issuance of the stop work order two days earlier, as noted below, the issue concerning the wet column boots was resolved prior to the issue involving the size of the drain pipe, so the pendency of the dispute concerning the boots never held up work.
Also on September 10, Mr. Cooper emailed a letter to Mr. Kunard claiming that Petitioner was entitled to an increase in the Contract Price for Respondent's insistence that Petitioner install 8" pipes and for Respondent's requirement of fluorescent lighting that effectively resulted in the need to mount a light on every column.
A meeting took place on September 10, 2010, among Mr. Rousseau, Mr. Vlock, Mr. Mets, Mr. Kunard, Ms. Banaszewski, Mr. Hogarth, Mr. Upson, and other officials. According to the
"Background" section of the minutes of this meeting, the main concern of Petitioner was costs, and the sole concern of Respondent was timeliness.
Petitioner raised concerns about lighting fixtures and the size of drainage pipes. As for the lighting fixtures, Petitioner noted a conflict between the lighting fixture designated in the Design/Build Criteria and the District Master Specifications. This had been resolved by Mr. Bailey's email of May 25, as noted above.
Petitioner complained about the Moghadam Prohibition.
As explained above, the inception of this unfortunate specification was mid-April and did not have a significant impact on the timeliness of any of the Six Schools. But Petitioner's complaint was justified to the extent that it contended that the Moghadam Prohibition added unnecessary costs to each project.
Relying in part on Mr. Cooper's letter dated September 10, Petitioner also objected to changes to the means by which levels of illumination were calculated. The record permits no means to credit or discredit this lighting complaint.
Turning to the size of the drainage pipe, Petitioner estimated a $100,000 cost difference in 8" pipe versus 4" pipe. This complaint, if true, is irrelevant because Petitioner's
drawings specified 8" pipe, as did the Contract Documents, as noted above.
Petitioner complained that the Building Department only "began enforcing" the 8" requirement recently. The complaint is at least partly correct, although it is not clear that enforcement actually started with Petitioner's project.
Mr. Kunard testified that, to some extent, Walker and Pirtle had also installed drainage pipes smaller than 8" in diameter. (Tr. 1998) Interestingly, Mr. Betts testified that he has never learned that any Design Builder had installed drainage pipes smaller than specified on its plans. (Tr. 3725)
Mr. Betts' point may have been only that plans for some of the earlier walkway cover projects specified small drainage pipes--not that the Building Department allowed any Design Builders to install smaller pipes than specified in its plans. Mr. Cooper testified that Mr. Rousseau showed him Pirtle's walkway cover plans that depicted 4" pipes for at least one of its walkway cover projects. (Pet. Ex. 233, pp. 58-59) But Mr. Cooper also recalled that Petitioner's plans for one of its early projects were based on 4" pipes. (Id. at p. 58)
At this point, it is impossible to determine the size of the drainage pipes specified in the drawings of Walker and Pirtle; it is clear only that all three Design Builders installed pipes smaller than 8" in diameter, and Petitioner was
the first whose smaller pipes were discovered in a plumbing inspection.
The larger point is that Petitioner did not install the pipes specified in its drawings.13/ This appears to have been a matter of mere neglect. Mr. Cooper testified that he was surprised at this fact and determined that the plumbing subcontractor had deviated from the plans and installed 3" and possibly 4" pipe because that is all that he had in his truck.
Likewise, neglect describes various elements of Respondent's contract management efforts. Here, the Building Department either failed to note that Walker and Pirtle had submitted drawings with undersized drainage pipes, or it failed to detect the installation of pipes smaller than specified in their drawings. Given the ineptitude of the Building Department inspectors concerning the boot details on the wet columns, as described below, neither of these alternatives seems especially unlikely. Given the absence of any direct evidence of unfairness directed by the Building Department toward Petitioner, either of these alternatives is likelier than a deliberate attempt to favor Walker or Pirtle over Petitioner.
Lastly, the minutes of the September 10 meeting record a concern of Petitioner regarding the above-described September 8 email, in which Mr. Kunard had advised Mr. Rousseau and Mr. Vlock that their July 15 email requesting an extension
of time was insufficient, and they had not submitted a request for extension of time that provided justification for an extension in the manner prescribed by the General Conditions. Oddly, though, Petitioner's representatives do not acknowledge specifically that, prior to the issuance of the stop work order, it was late on all Six Schools.
The absence of such a specific acknowledgement does not mean that Petitioner's representatives were completely unaware of their untimely performance. According to the minutes of the September 10 meeting, Petitioner's representatives claimed that the above-discussed lighting and drainage changes had slowed production rates, but said that they were still analyzing the issue. The justification of this contention concerning lighting matters, if not drainage, likely accounts for the willingness of Respondent's representatives to agree not to press a claim for liquidated damages until the parties had resolved Petitioner's claim for an extension of time.
Once Petitioner's representatives learned that another inspector had failed the boot of a wet column at Limestone Creek, they claimed that the Building Department was treating them unfairly because other Design Builders were installing the identical boots on wet columns.14/ Again, they were right as to the installation of identical boots on wet
columns by Walker or Pirtle, according to Mr. Kunard. (Tr.
1999)
In this case, the Building Department inspectors had
failed to inspect the wet column boots of any of the three Design Builders. Even though all boots served as anchors of the columns to which they were attached, the structural inspector had not inspected wet column boots, thinking that these were drainage details under the jurisdiction of the plumbing inspector. Even though the wet column boots contained important drainage fittings and connections, the plumbing inspector had not inspected these boots, thinking that these were structural details under the jurisdiction of the structural inspector.
Again, though, Petitioner's drawings depicted a connection quite different from that installed by Petitioner. In the drawings, Petitioner had proposed to construct, at the base of each wet column, a welded connection between the underground drainage pipe and the conduit running down the column. In reality, Petitioner instead had constructed a connection using duct tape, grout, and concrete, using the tape as a temporary measure to prevent the wet concrete from entering the pipe.
At first, it appeared that the parties would resolve the drainage pipe issue more quickly than the wet column boot issue. It seems that Mr. Vlock himself was unpersuaded by his
employer's claim as to the drainage pipes. By email dated September 17 to Mr. Hogarth and Mr. Summerell with copies to
Mr. Rousseau, Mr. Bailey, and Ms. Banaszewski, Mr. Vlock assured Mr. Hogarth that, as he had said during a telephone call earlier that day, Petitioner was "prepared to install drainage on the above project as per the approved drawings." This meant, of course, 8" pipes.
In his response by email also dated September 17, Mr. Hogarth addressed the boot issue by asking for "the answer on the wet column to leader connection" and whether it too will match the approved drawings. On the same date, Mr. Rousseau responded to Mr. Hogarth's email by showing a "universal detail signed & sealed [three days earlier] by the Design Engineer for all current projects in Palm Beach County." In a fourth email dated September 17, Mr. Hogarth told Mr. Rousseau, Mr. Vlock, and Mr. Summerell that he was reluctant to accept the duct tape and grout connection without further thought. He noted that aluminum would be in contact with concrete and thus would require coating. It was unclear whether Petitioner intended to tape the pipe to the aluminum before or after it was coated, but, in either case, Petitioner would rely on the grout to hold the pipe in place tight against the column. The coating would prevent the grout from bonding to the aluminum, but the grout
would be expected to leak. Given these circumstances, Mr. Hogarth asked how this boot detail would not leak.
Both issues seemed on the verge of resolution in an email dated September 28, 2010, from Mr. Hogarth to
Mr. Rousseau. In this email, Mr. Hogarth offered to permit the use of the as-built boot detail on the wet columns, but future projects would have to be built in accordance with the approved drawings. In the same email, Mr. Hogarth offered to release the stop work order, but only if Petitioner replaced the existing noncompliant drainage pipes with the pipes shown in the approved drawings.
Another meeting took place on October 4, 2010, among Mr. Vlock, Ms. Rousseau, Mr. Kunard, Mr. Mets, Mr. Hogarth, Ms. Banaszewski, Mr. Sanches, and others. Ms. Rousseau is the vice president of Petitioner. The minutes accurately state the
background as the issuance of the stop work order for drain pipe size and, a couple of days later, "wet-column fittings." At the meeting, Petitioner claimed that the Building Department was treating Petitioner differently in reviewing plans and inspecting construction than it was treating other Design Builders.
Petitioner's complaint about unfairness in reviewing plans was as untimely as it was groundless. Although the record reveals nothing of how the Building Department reviewed the
plans of Walker and Pirtle, as noted above, Petitioner submitted flawed plans, and the Building Department expedited the issuance of the building permits for the Six Schools at the repeated urging of the Facilities Services Department.
According to the minutes, Petitioner trotted out its recurrent complaint about the Moghadam Prohibition, even though it had nothing to do with the stop work order. Evidently, Respondent had permitted Pirtle to co-locate lighting fixtures and wet columns. Given the eventual issuance of change orders to reimburse Petitioner for these costs and time lost in complying with the Moghadam Prohibition, it is unnecessary to comb through the existing record to determine if one of the Building Department's inspectors, perhaps more versed in Respondent's longstanding approval of this practice, inspected the handful of projects on which Pirtle was working and failed to enforce the Moghadam Prohibition. Once again, though, the circumstances do not readily suggest a coordinated effort of any sort among the Building Department inspectors, but especially not a coordinated effort focusing on Petitioner.
More to the point, Petitioner pointed out that it and Pirtle were using the same aluminum subcontractor and, thus, the same wet column boots, but Pirtle had not been cited for deviating from its drawings. This argument, though, missed a couple of facts. First, the record does not disclose if
Pirtle's approved drawings depicted welded pipes, as had Petitioner's approved drawings. Second, if offered to prove unfair treatment, Petitioner's argument fails to account for the fact, noted above, that, until one month earlier, Respondent had no idea what any Design Builder was installing in terms of wet column boots due to the remarkable omission of its inspectors to inspect wet column boots.
Turning to Walker, Petitioner complained--again--that it was evidently not using a licensed civil engineer for drainage design. As was the case with the complaint about preferential treatment in plan review by the Building Department, this complaint about whether Walker had had to retain a civil engineer was untimely and groundless for the reasons stated above.
At this point, given the pressing matters at hand in terms of late construction, a stop work order, and deviations from approved drawings, Petitioner's reprisal of its earlier complaints about the time it took the Building Department to review plans and whether Walker had been required to retain a civil engineer seem to amount to nothing more than an attempt by Petitioner to distract from the real issues: more immediately, whether it must install fixtures that conform to its drawings and, more generally, whether it would be able to avoid liquidated damages for untimely construction at the Six Schools.
A Building Department representative responded that the inspectors are told to inspect according to the approved plans. Evidently without providing specifics, but not entirely implausibly, Petitioner asserted that, although it had not built according to its plans, other Design Builders had done the same thing--without earning stop work orders.
Mr. Hogarth promised that the Building Department would investigate these issues. Turning to the more pressing topic of the pending stop work order, Mr. Hogarth stated that the Building Department had issued the previous week a list of changes that Petitioner could undertake to lift the stop work order: essentially, Respondent would accept the duct-taped joint at Limestone Creek only, but would insist on the installation of 8" drainage pipes.
Petitioner's representative responded that Petitioner had already agreed to replace the installed 3" pipes with 8" pipes, at its cost, but it objected to the withholding of the use of the duct-taped joint on future projects. In response to unrelated complaints about Petitioner's PPEs, Respondent agreed to remove the offending PPEs from the PPE tracking system.
After the meeting, Mr. Hogarth relented on the duct- taped joints. By email dated October 7, 2010, from Mr. Vlock to Mr. Hogarth, Mr. Vlock memorialized a discussion that had taken place between the two representatives after the October 4
meeting: Respondent would lift the stop work order and allow Petitioner to use the duct-taped boot detail on wet columns at all previous and pending projects if Petitioner reinstalled the drainage pipes to comply with the approved drawings. By email later the same day to Mr. Vlock, Mr. Hogarth stated that he would remove the stop work order at Limestone Creek, effective that day, based on the reworking of the installed piping and the submission of revised drawings at Limestone Creek and other projects where Petitioner proposed to use the duct-taped joints in the boots of wet columns.
Mr. Hogarth performed his end of the deal by lifting the stop work order on October 7. Evidently, Petitioner submitted the required revisions to its drawings of the boots of the wet columns. But, rather than remove the undersized pipes and install 8" pipes, Petitioner challenged the stop work order by seeking a variance from the approved plans calling for 8" pipes.
By email dated December 10, 2010, to Mr. Bailey, Mr. Vlock transmitted a December 8 revision to the Limestone Creek drainage plan--obviously, featuring pipes of diameters smaller than 8". The Facilities Services Department allied itself with Petitioner and against the Building Department on
this issue. By email the same date to Mr. Chodora, Mr. Bailey,
on behalf of Petitioner, requested a variance from the 8" drainage pipes to allow 4" drainage pipes.
Mr. Chodora referred the variance request to a variance committee, which comprises eight employees of Respondent and four outside consultants. By email dated December 10, Mr. Chodora informed the committee members that the issue was whether, at Limestone Creek, Petitioner should receive a variance from the requirement in the District Design Criteria to permit it to use 3" and 4" drainage pipes instead of 8" drainage pipes. The assignment to the committee members called for their recommendations by December 21, 2010, which was later changed to December 14.
The responses reflect a range of informed comments.
Several persons expressed the reasonable concern that the smaller pipes would clog. Manifesting a spirited independence from his immediate supervisor, Mr. Joyce voted to approve the variance to test a smaller diameter pipe for sidewalk canopies, which drain smaller areas than building roofs. Another member of the committee, who was a project coordinator in Respondent's Department of Program Management, also voted to approve the variance. By the time the votes were tallied, though, five members had voted to deny, three members had voted to approve, and four members had not voted. As Mr. Cooper had warned
Mr. Rousseau, there was a "low probability" that Respondent
would allow 3" pipes in the place of the 8" pipes shown in the drawings. (Pet. Ex. 233, p. 109)
Following the vote, Mr. Sanches was required to review the recommendations of the committee members and make a final decision on the variance request. By this time, Petitioner had buried the drainage pipes. However, on December 22, Mr. Sanches concurred with the majority of the committee and denied the request. By email dated January 3, 2011, to Mr. Rousseau, Mr. Vlock, Mr. Cooper, and Mr. Bailey, Mr. Chodora advised that the request for variance was denied.
By email dated January 4, 2011, to Mr. Sanches, Mr. Rousseau appealed the denial of the variance request.
Notwithstanding Mr. Sanches' role in denying the request, the appeal went to Mr. Sanches. Concerned that the Limestone Creek project was now five months late and still unfinished,
Mr. Kunard contacted Mr. Sanches and asked him to grant the variance.
After a meeting in his office on January 11, 2011, with Mr. Rousseau and possibly others, Mr. Sanches reversed his earlier decision and granted the variance subject to four conditions set forth in an email dated January 12 to
Mr. Rousseau: 1) Petitioner must install approved screening over the canopy inlets leading to the column drains;
2) Petitioner must add a concrete collar for each pipe cleanout
and a sidewalk-level cover for each cleanout; 3) Petitioner must extend the already-required warranty of one year to two years for cleanout and pipe breakage; and 4) Petitioner must submit revised plans depicting these changes.
Mr. Rousseau cites this resolution as evidence of the unreasonableness of Respondent's initial action in issuing the stop work order. This claim is rejected. Mr. Sanches never believed that Petitioner was justified in installing smaller pipes than had been approved in Petitioner's plans. Mr. Sanches agreed to accept what was already in the ground only to spare the students and staff at Limestone Creek the inconvenience of further delay in a project that Respondent had planned was to have been finished before the start of the 2010-11 school year.
Regrettably, the record fails to convey Mr. Hogarth's reaction to the granting of the variance, which effectively enabled Petitioner to escape obligations that it had assumed twice--once in its drawings and once in Mr. Vlock's settlement agreement with Mr. Hogarth.
The Superintendent's Letter may constitute the reaction of Mr. Sanches and ultimately even Mr. Kunard to the fact that the granting of the variance did not hasten the completion of construction at Limestone Creek, as discussed below.
Construction Activity During Fall and Winter 2010
The general conditions item of pay applications filed through September 1, 2010, indicates the following percentages of construction remaining at each of the Six Schools: Spanish River--0%; Watkins--14%; Independence--29%; Limestone
Creek--44%; Lighthouse--57%; and Jupiter Farms (July 31 pay application)--79%.
Construction in the fall of 2010 proceeded in accordance with the following pay applications submitted on October 1, November 8 (November 16 for Watkins), and December 1 (except for Spanish River and Independence, for which Petitioner submitted no pay application at that time).
School Oct. 1 Nov. 8 Dec. 1
Spanish River | ||||
General Conditions | done | done | no | pay app. |
Site Drainage | done | done | no | pay app. |
Concrete | done | done | no | pay app. |
Aluminum Walkways | $8003--0% | done | no | pay app. |
Electrical | $2608-25% | $1862--0% | no | pay app. |
Watkins | ||||
General Conditions | $300--10% | $0-10% | $692-0% | |
Site Drainage | done | done | done | |
Concrete | done | done | done | |
Aluminum Walkways | done | done | done | |
Electrical | $0---8% | $0-8% | $1152--0% | |
Independence General Conditions | $1000--13% | $1500---3% | no pay app. | |
Site Drainage | done | done | no pay app. | |
Concrete | $0---7% | $3720---0% | no pay app. | |
Aluminum Walkways | done | done | no pay app. | |
Electrical | $1044--20% | $0--20% | no pay app. | |
Limestone Creek
General Conditions | $260--41% | $2410--13% | $300-10% |
Site Drainage | $0--20% | $0-20% | $0-20% |
Concrete | $0--13% | $0-13% | $4000--0% |
Aluminum Walkways | $0--23% | $13,200---5% | $1893--2% |
Electrical | $3601--40% | $2702--25% | $0-25% |
Lighthouse
General Conditions Site Drainage | $1500--41% done | $1700--23% done | $100--12% done |
Concrete | $0--50% | $9543--10% | $2364--0% |
Aluminum Walkways | $6819--15% | $0--15% | $9406--0% |
Electrical | $2940--45% | $1960--35% | $0-35% |
Jupiter Farms General Conditions | $0--79% | $2160--40% | $896--24% |
Site Drainage | $0-100% | $0-100% | $1500--50% |
Concrete | $0-100% | $4785--60% | $5982--10% |
Aluminum Walkways | $0--26% | $3640--15% | $3651---5% |
Electrical | $750--90% | $2130--60% | $2160--30% |
This chart reveals that, by early December 2010, Petitioner had completed Spanish River and Watkins and had very little remaining work at Independence. Petitioner was almost 90% done at Limestone Creek and Lighthouse and was about 75% done at Jupiter Farms.
On January 7, 2011, Petitioner filed pay applications for three of the four schools at which construction was not yet complete. Limestone Creek was billed $300 of general conditions, $1500 of aluminum walkways, and $3000 of electrical, leaving only 6% of general conditions, 20% of site drainage, and 8% of electrical to be done. Lighthouse was billed $500 of general conditions and $1800 of electrical, as well as additional work, leaving only 7% of general conditions and 26%
of electrical to be done. Jupiter Farms was billed $700 of general conditions, $1500 of site drainage, $1196 of concrete, and $1750 of aluminum walkways, leaving only 11% of general conditions and 30% of electrical to be done. Independence was not billed. This left Petitioner at least 90-95% done at the four remaining schools.
But Final Completion did not immediately follow, and it is difficult to understand why Petitioner did not prosecute the little work remaining to achieve Final Completion. On January 7, 2011, Wes Christie, the Facilities Management Coordinator for Limestone Creek, issued a PPE with an average score of 2.1 and scores of 1.5 for scheduling and 1.8 for project management. The scheduling score was due to Respondent's failure to give Mr. Christie a schedule of construction. When Mr. Christie asked Mr. Vlock for this schedule, which is required by the Contract Documents, Mr. Vlock replied that any schedule would be a "wild guess." (Tr. 926) This remark is especially startling, given the little work remaining on the job.
Disregarding a set of pay applications reflecting change orders discussed in the next section, the next pay application submitted for Limestone Creek was on April 18, 2011. Limestone Creek was billed for $519 of general conditions, $913
of site drainage, and $1502 of electrical, finishing this project.
The record is missing the final pay application for Lighthouse, although it was also submitted after the pay application for the change orders discussed in the next section and prior to another pay application on September 2, 2011.
The record contains the last pay application for Jupiter Farms, but it is undated. Submitted between February 24 and September 2, 2011, this pay application reflects that Jupiter Farms was billed $644 for general conditions and $2160 for electrical, finishing this project.
By this time, it is impossible to presume that Petitioner was even submitting pay applications promptly. But even assuming a close relationship between the work and the pay application, Petitioner did not obtain CCs for a considerable period of time after the pay applications showed the work had been finished.
First Round of Change Orders in Fall 2010 and Winter 2010-11
It is possible that Petitioner's failure to prosecute the work after the start of 2011 was linked to its dissatisfaction with Respondent's handling of Petitioner's requests for increases in Contract Prices. In October 2010, Petitioner submitted a number of claims seeking change orders
adding to the Contract Prices for extra work not caused by Petitioner. Generally, these claims were insufficient for numerous reasons, including a failure to identify subcontractors or projects and a lack of information as to additional work, such as retrenching.
On or about December 15, 2010, Petitioner refiled its claims. These claims bear one or more dates in November and request change orders at 12 schools, including the Six Schools. The 12 schools included all of the Group 2 schools and all of the Groups 5 and 6 schools except Jupiter.
The December claims propose a total increase in the Contract Prices of $274,758. The largest component of these claims is $161,000 of electrical. The next two largest components are about $61,000 of general conditions and $47,000 of drainage.
Under the Contract Documents, the October and December claims were untimely. Like the October claims, the December claims, although more detailed than the October claims, were also deficient for lack of documentation. However, upon receiving the December claims, Mr. Kunard tried to work with them as best that he could. For example, Mr. Kunard directed the Facilities Management Coordinators for each school to measure the length of each trench that Petitioner had been obligated to dig following the issuance of the Moghadam
Prohibition, so as to move light fixtures from wet columns to dry columns on the opposite side of the sidewalk.
Even though Petitioner was already months past the deadlines for Substantial and Final Completion for the Six Schools, the Facilities Services Department was favorably predisposed to much of the electrical claim because of the time and money expended by Petitioner in complying with the Moghadam Prohibition. As previously noted, though, the Moghadam Prohibition had not resulted in significant delays in submitting plans, but may have resulted in delays in obtaining suitable light fixtures. The resulting electrical claims applied to all of the 12 schools except Lighthouse, Limestone Creek, and Jupiter Farms, where work evidently was not far enough along for Mr. Kunard to have satisfied himself that the Contract Times for these schools had been unaffected by the Moghadam Prohibition.
On January 28, 2011, Mr. Kunard, Mr. Bailey,
Ms. Banaszewski, Mr. Rousseau, and Ms. Rousseau met to discuss Petitioner's December claims on the 12 projects. Mr. Rousseau acknowledged that the December claims did not comply with the Contract Documents, but he outlined the elements of their requests for additional compensation. Mr. Rousseau identified five items.
First, the Moghadam Prohibition was not an item in dispute as to additional Contract Prices or Contract Time. The
Facilities Services Department representatives readily conceded liability on this item, but Petitioner was unprepared to itemize the costs attached to it.
Second, Mr. Rousseau complained about faulty lighting calculations that Petitioner had received from a consultant that it had hired. Obviously, this was a matter between Petitioner and its consultant, and the record does not support Petitioner's contention that Respondent in some fashion encouraged or required Petitioner to retain this consultant.
At some point, Mr. Rousseau made a related claim that Pirtle had installed lights based on faulty lighting calculations. Respondent later required Pirtle to recalculate its photometrics and determined that Mr. Rousseau's assertion was incorrect. Mr. Rousseau's claim of unfair treatment on this point was thus unfounded. Although Respondent allowed minor deviations from the lighting standards from time to time, it did so for all the Design Builders, and the deviations were insignificant, typically involving small areas of covered sidewalks.
Third, Mr. Rousseau complained that Petitioner had been required to install many more lighting fixtures than it had bid on. As noted above, Petitioner's winning bids on the Six Schools were not so much lower than the next lowest bidder as to suggest a major mistake in Petitioner's calculations. If
Petitioner had to install many more lighting fixtures than it had bid--a fact not established by the record--this may have been due to any number of reasons, including Petitioner's incompetence, the faulty lighting calculations performed by Petitioner's consultant, and the Moghadam Prohibition.
In a related complaint, Mr. Rousseau raised a fourth item, noting that other Design Builders had installed alternate lighting fixtures without obtaining permission from Respondent. In at least one case, this had been true, as noted above, and Respondent had belatedly advised the other Design Builders of the availability of the alternative that it had allowed one Design Builder to install. It is impossible, though, on this record, to determine the extent to which Respondent's handling of alternative lighting fixtures may have cost Petitioner money or time.
Fifth, Mr. Rousseau complained that the Building Department was treating Petitioner differently from other Design Builders. From the minutes, this appears to have been a generic complaint without particulars. This recommended order has addressed specific claims of unfair treatment as they emerged. As noted elsewhere, most complaints of differential treatment are unsupported by the record, and the few instances of differential treatment were more likely the product of haphazard contract management practices of some of Respondent's employees,
rather than a coordinated--or individual--effort to discriminate against Petitioner.
The January 28 meeting closed with Mr. Kunard's offering to recommend to the Projects Control Department additional compensation of about $45,000--provided all issues were resolved. Petitioner countered that it could not accept this small amount and remain in business, but possibly could accept $230,000. Mr. Rousseau contended that his claim was not really about the money, but was about ensuring that other minority businesses were treated better by Respondent. The meeting closed with Mr. Kunard's request for additional information, so that Respondent could prepare a formal offer to Petitioner.
As it had tried to help Petitioner to expedite permitting, the Facilities Services Department tried to help Petitioner in presenting these claims. First, the Facilities Services Department overlooked the fact that these claims were not timely submitted. Second, Mr. Kunard worked with
Mr. Rousseau to assemble the required supporting paperwork because the claims were initially submitted without the required documentation and itemization. Third, Mr. Kunard himself suggested two additional claim categories involving reproduction; even those these totaled only about $3100, Petitioner had omitted them. Fourth, Mr. Kunard advocated
Petitioner's case within Respondent. Fifth, for the first time in the memory of Respondent's principals, Mr. Moore agreed to sever a claim into two parts, so the Facilities Services Department could, in effect, grant part of a claim.
Mr. Kunard had already determined, by the end of 2010, that Respondent should pay most of the electrical portion of Petitioner's claims together with association portions of the accompanying costs, such as in recalculating photometrics. Most, if not all, of these sums arose due to the Moghadam Prohibition. Notwithstanding some language to the contrary among the documents, neither Mr. Kunard nor Respondent ever determined that Petitioner was entitled to any--or at least substantial--more money for the size of the drainage pipes, which was a problem that Petitioner had caused by deviating from its approved drawings. Mr. Kunard estimated that no more than
$10,000 of the additional cost to which Respondent agreed could be attributed to the stop work order. (Tr 1643) Mr. Kunard also agreed to pay 30 days of staff time for the approval of the boot detail on the wet columns, even though this too was the result of Petitioner's deviation from its approved plans.
In determining how much to offer Petitioner in additional Contract Price, Mr. Kunard enlisted the help of Mr. Upson. By email dated February 16, 2011, to Mr. Upson, Mr. Kunard outlined the means by which he had arrived at an
offer for Petitioner. The email notes that Mr. Kunard had obtained Mr. Sanches's authorization for the amount of the offer with the "understanding that we would still look at [Petitioner's] data if we could get it." This statement anticipates the approval of a portion of Petitioner's claim and reconsideration of the remainder of the claim upon presentation of supporting data.
Mr. Kunard's February 16 email states that he was working "under pressure." He noted that Petitioner's "subs are in arms [and] [Petitioner] is lobbying heavily above me, so I am moving forward with the 12 [change orders] for which I have enough data to act upon." The demands of Petitioner's subcontractors and Mr. Kunard's awareness that Petitioner was pressing its case with higher officials within Respondent created a very unfavorable atmosphere for unfair treatment of Petitioner.
In a reply email later that day, Mr. Upson stated that he "believed you have come to a fair settlement based upon the restrictions, timelines and issues you must juggle at this point."
The portion of Petitioner's claim to which Respondent rapidly assented totaled $126,124. By Change Orders executed March 1 and 2 (in one case, March 3), the parties agreed to
amendments to the Six Schools' Short Form Agreements. All of the dates are confirmed in an email dated April 4, 2011, to Mr. Rousseau from Mr. Kunard.15/
In the following chart, the "Old F.C." is the Final Completion Date stated in the Short Form Agreement. The "New F.C." is the new Final Completion Date as a result of these change orders. This first round of change orders effected the following changes to the Contract Price and Final Completion
Date: School | Additional | Price | Old F.C. | New F.C. |
Jupiter Farms | $1625 | 8/12/10 | 3/28/11 | |
Watkins | $14,570 | 8/14/10 | 3/25/11 | |
Limestone Creek | $1625 | 8/16/10 | 3/28/11 | |
Lighthouse | $1625 | 8/16/10 | 3/28/11 | |
Independence | $14,579 | 8/27/10 | 4/6/11 | |
Spanish River | $20,528 | 8/29/10 | 3/18/11 |
To obtain the additional compensation authorized by these change orders, Petitioner submitted another round of pay applications.16/ The pay application for each school is for the amount set forth above. The pay application for Jupiter Farms is dated February 24, 2011. Although the pay applications for the other five schools are undated, given the dates on which the change orders were executed, the pay applications for the other five schools were probably submitted at the same time as the Jupiter Farms pay application. Respondent paid Petitioner these amounts in late February and early March 2011.
Proposed Second Round of Change Orders: Spring 2011
If Mr. Kunard believed that the first round of change orders, like the variance for the drainage pipe, would hasten the completion of construction at the Six Schools, produce progress on the work at the Six Schools, he was again mistaken. With the new deadlines for Final Completion only days away,
Mr. and Ms. Rousseau met with Mr. Kunard, Mr. Bailey, and
Ms. Banaszewski on March 24, 2011, to discuss documentation to support a second round of change orders. The minutes reflect that Respondent had not received additional documentation from Petitioner before implementing the first round of change orders, which had been based on Respondent's--probably Mr. Kunard's-- "unilateral judgment on what was owed." At this meeting, the principals discussed the grounds for additional change orders, but the minutes disclose little progress.
Negotiations over the remainder of Petitioner's claim were never successful. Petitioner asserted entitlement to compensation for items that Respondent did not agree justified compensation. By the end of March, when all of the schools except Independence were to have achieved Final Completion under the first round of change orders, Respondent began to interpose its own claims for liquidated damages.
Undeterred, Mr. Kunard continued to seek a settlement that would extend the completion dates and spare Petitioner
costly liquidated damages. Toward this end, Mr. Kunard asked Mr. Rousseau to select realistic deadlines for new completion dates. Using the new dates selected by Mr. Rousseau, Mr. Kunard confirmed, by email dated April 4, 2011, to Mr. Rousseau, that a second round of change orders would incorporate the following new Final Completion Dates: April 15, 2011, for Spanish River; April 30, 2011, for Independence; and April 20, 2011, for the remaining four schools of the Six Schools.
Although the purpose of the April 4 email was to establish new Final Completion Dates for a second round of change orders that never went into effect, the email notifies Petitioner that it is already untimely on five of the Six Schools. The normal font indicates Mr. Kunard's email; the italicized font indicates Mr. Rousseau's response.17/ In relevant part, these emails state:
The following projects are now late or will soon be late again:
HL Watkins. Final Date was 3/25/11.
Work is complete with the except [sic] of Perfection punch list item and sprinkler head installation. New Final date for HL Watkins is 4/20/2011.
Independence MS. Final Date is 4/6/11.
3 lights on back order and grass will be installed on 4/7/2011. New Final date for Independence MS is 4/30/2011.
Jupiter Farms ES. Final Date was 3/28/11. New Final date for Jupiter Farms ES is 4/20/2011.
Lighthouse ES. Final Date was 3/28/11. New Final date for Lighthouse ES is 4/20/2011.
Limestone Creek ES. The Final Date was 3/28/11.
New Final date for Limestone Creek ES is 4/20/2011.
Spanish River HS. The Final Date was 3/18/11.
New Final date for Spanish River HS is 4/16/2011.
Mr. Kunard advocated a second round of change orders to the Project Controls Department. Normally, the Project Controls Department requires the contractor to file such a request on its letterhead. In the interest of time, Mr. Kunard forwarded Mr. Rousseau's emails and documentation and, as he had done with the Building Department when issuing the permits, pressed for a favorable decision.
Mr. Upson helped Mr. Kunard determine a reasonable amount of additional compensation to include in a second round of change orders. By email dated March 31, 2011, to Mr. Kunard, Mr. Upson advised that he had considered the documentation supporting a proposal of $81,676--evidently, the proposal of
Mr. Kunard--but the fair and reasonable costs totaled only
$27,638. By email on the following day to Mr. Upson, Mr. Kunard provided additional analysis of retrenching in an obvious attempt to raise Mr. Upson's determination.
In reply, Mr. Upson emphasized that he was using the excavation production that Petitioner had proposed. He noted a certain tension in scrutinizing closely one category of
expenses--to secure greater compensation for Petitioner--without subjecting all categories to this level of scrutiny. Mr. Upson added: "Keep in mind, we are taking their word on a lot of these changes and have no verification on our side." Rejecting Petitioner's attempt to base its costs on the charges of other contractors, Mr. Upson noted that an excessive excavation rate might be offset by a relatively tight compensation rate for electrical work; he advised that it all evened out.
Nevertheless, Mr. Upson advised Mr. Kunard that he had the ability to settle above Mr. Upson's suggestion, if he could state reasons for doing so. In a final email, also dated April 1, Mr. Kunard told Mr. Upson that he would "absorb your input and recommend a settlement amount."
Evidently, it did not take Mr. Kunard long to absorb Mr. Upson's input. On April 1, Mr. Kunard prepared a spreadsheet for the 12 schools that were the subject of the change orders, including the Six Schools. In rounded numbers, the spreadsheet itemizes a total offer of $69,331 for the proposed second round of change orders consisting of $52,246 of electrical, $14,565 of general conditions, and $2520 of photometric. All 12 schools were included in each of the these
three work categories except that Lighthouse, Limestone Creek, and Jupiter Farms did not bear any electrical costs. In particular, only three of the Six Schools were included for additional electrical costs arising from the Moghadam Prohibition: Spanish River, Watkins, and Independence.
In presenting the proposed second round of change orders to Mr. Rousseau, Mr. Kunard stressed that Respondent's offers of $69,331 of additional compensation and additional time for Final Completion of the Six Schools was conditioned on a full settlement of all of Petitioner's claims for additional compensation. Absent Petitioner's release of all future such claims, Respondent would not agree to pay the additional compensation of $69,331 or extend the Final Completion Dates again.
If Mr. Rousseau sensed that he was posed with a dilemma, nothing in the record so indicates. By April 6, all of the Final Completion Dates set forth in the first round of change orders for the six schools had arrived, and Petitioner had reached Final Completion on none of them. As was his practice, rather than focus on Contract Time, Mr. Rousseau focused on Contract Price--demanding the additional compensation of $274,758 stated in its December claim--and refusing to forego any additional claims.
Final Completion: Summer 2011
As noted above, at the start of 2011, Petitioner had largely completed Spanish River and Watkins and was 90-95% done with Independence, Lighthouse, Limestone Creek, and Jupiter Farms. The following chart lists the Final Completion Dates, as set forth in the first round of change orders, and the dates on which Respondent issued CCs.
School F.C. Date Date of CC Days Late
Spanish River | 3/18/11 | 5/11/11 | 54 |
Watkins | 3/25/11 | 5/13/11 | 49 |
Lighthouse | 3/28/11 | 8/9/11 | 134 |
Limestone Creek | 3/28/11 | 8/26/11 | 151 |
Jupiter Farms | 3/28/11 | 8/26/11 | 151 |
Independence | 4/6/11 | 8/12/11 | 128 |
By email dated July 13, 2011, to Mr. Rousseau, Mr. Kunard stated that he had learned that Petitioner could obtain the CCs for Spanish River and Watkins "now," if
Petitioner would merely file a request for them. This statement appears to be incorrect because the CCs for these schools bear dates of May 11 and 13, 2011,18/ as indicated in the chart immediately above.
Preceding the Superintendent's Letter by a day, the July 13, 2011, email adds:
Your projects cannot be determined to have achieved Final Completion until you have your CCs. Please do what ever it takes to complete your projects. They are very late.
I. Conclusion
Substantial deviations from the Contract Times had occurred by the time of the first round of change orders. For the portion of those delays for which no justifiable cause existed, such delays were substantial and remained so after the written notice by letter and email dated July 15, 2010, from
Mr. Kunard. The time extensions contained in the first round of change orders corresponded to the portion of these delays attributable to Respondent and much more.
The question is whether, without justifiable cause, Petitioner substantially deviated from the Final Completion Dates set forth in the first round of change orders. It did. By the time of the first round of change orders, Petitioner had not been prosecuting the work since the start of 2011. Work rates well within those established during the summer or even fall of 2010 would have achieved timely Final Completion at all Six Schools, if Petitioner had chosen to rededicate itself to these jobs after the first round of change orders. But it did not.
Instead, at four schools, Petitioner missed its extended deadlines by periods in excess of the expected durations of the jobs.19/ At the other two schools, Petitioner missed its extended deadlines by periods of nearly two months, or one-half to two-thirds of the expected durations of the jobs.
These deviations from the extended time schedules are substantial.
Notwithstanding the mass of paper that Respondent has introduced into evidence, only two pieces might serve as Respondent's written notice to Petitioner of its substantial noncompliance with the extended time deadlines contained in the first round of change orders.
One piece of paper can be dismissed readily. The July 13, 2011, email from Mr. Kunard to Mr. Rousseau, which is cited at the end of the preceding section of this recommended order, is not notice of anything, coming one day prior to the declaration of default by the Superintendent's Letter. This notice also fails as to Spanish River and Watkins because Petitioner had already obtained CCs for these schools.
The other piece of paper is the April 4, 2011, email from Mr. Kunard to Mr. Rousseau. This email applies only to five of the Six Schools because it preceded the extended Final Completion Date for Independence by two days. As to the remaining five schools, this email constitutes the bare minimum required of notice. Although the purpose of the email was to elicit from Mr. Rousseau yet another set of Final Completion Dates for use in a second round of change orders that never was finalized, the email identifies a Final Completion Date for each school and communicates the simple fact that Petitioner has
already missed this date for each of the Six Schools except Independence.
A determination of the adequacy of Respondent's notice is facilitated by the basic nature of its subject: untimeliness. Reduce to their essentials, the many Contract Documents provide what Petitioner is to build and how much Respondent is to pay--and when each party must perform its respective duties. Petitioner's principals knew this much, if, for no other reason, than the repeated attempts by Respondent's representatives to encourage timely performance of work. And the notice that Petitioner was substantially20/ behind again at five of the Six Schools could not have been news to
Mr. Rousseau.
By this point, it is not surprising that the sole means by which Respondent satisfies the notice requirement is an email that Mr. Kunard wrote primarily for a different purpose. The serendipity of this email--happily, from Respondent's perspective--fits neatly in the above-described portrait of Respondent's haphazard approach to contract management. Contemplation of this thin reed by which Count II hangs is a suitable preparation for the ultimate findings as to Petitioner's charges of unfair treatment.
Many specific instances of neglect, inattention, ignorance, confusion, inexperience, and lack of coordination in
Respondent's efforts at contract management have been identified above. Although the Facilities Services Department was far from flawless in its work, Petitioner's complaints of unfair treatment cannot fairly be focused on the efforts of Mr. Kunard and his employees. Repeatedly, Mr. Kunard went to remarkable lengths to rescue Petitioner from its neglect of its contractual undertakings and spare Petitioner the prospect of liquidated damages.
As noted in the next section, relatively late in the process, Ms. Swan, vetoed an ill-advised attempt by Mr. Kunard to award Petitioner additional work at Limestone Creek through another change order. But, otherwise, the Purchasing Department has not had any significant role in this case, at least until the very end, as described below. It is thus unlikely that Petitioner's charges of unfair treatment can be directed at
Ms. Swan and her employees.
The same is true for the Project Controls Department.
Mr. Upton's work was relatively limited, and Mr. Rousseau was probably unaware of his involvement.
The main, if not sole, target of Petitioner's unfairness complaints is probably the Building Department. However, its issuance of the building permits was above reproach. Petitioner's plans and drawings were flawed as to matters that proved quite material to this case. At the urging
of the Facilities Services Department, the Building Department issued building permits on the promise of post-permit filing of necessary revisions to the plans and drawings.
The Building Department's issuance of the stop work order was also above reproach. The wet column boot is irrelevant to this issue because resolution of this issue did not extend by one day the stop work order. In any event, Petitioner installed wet column boots and 3" and 4" drainage pipes that did not conform to the drawings that Petitioner had submitted in order to obtain building permits. Petitioner bore the risk that these noncompliant installations would hold up work while Building Department employees considered whether to allow them to remain in place. And there is no showing of delay by the Building Department in this process.
Where Petitioner perceives unfair treatment by the Building Department, the record reveals, at worst, an unevenness in the department's discharge of its responsibilities. The ill- fated Moghadam Prohibition emanated from a Building Department employee. The failure of Building Department inspectors to examine the boots of wet columns was unfortunate. The prospect that the plumbing inspector may have missed some undersized drainage pipes on the projects of other Design Builders cannot, regrettably, be attributed to anything but carelessness.
These misadventures of the Building Department in this case do not establish bad faith in dealing with Petitioner. There is absolutely no evidence of any intent to disfavor Petitioner, relative to the other Design Builders. The Moghadam Prohibition was announced to Petitioner's civil engineer, but applied to all of the Design Builders. The two inspectors failed to inspect any Design Builder's wet column boots; they discovered their omission only after work had been stopped for the installation of undersized pipes. Only the discovery of the undersized pipes was focused on Petitioner, but, if the inspectors were ever to realize that undersized pipes were being installed on these jobs, the odds were about one in three21/ that the discovery would be made at one of Petitioner's work sites-- and maybe even greater, if the other Design Builders were not behind schedule, as Petitioner was.
Significantly, nothing in the record suggests any delays attributable to the Building Department in Petitioner's obtaining CCs for the Six Schools. For reasons not very clear, at the start of 2011,22/ Petitioner stopped prosecuting the little remaining work at the Six Schools.
On balance, the Building Department treated Petitioner in a professional manner. Whatever shortcomings existed in the Building Department's discharge of its responsibilities, they were not reflective of bad faith of any
sort. Moreover, when the innocent missteps of the Building Department are weighed against the many accommodations provided by the Facilities Services Department, the net result is unearned benefit, not burden, conferred upon Petitioner by Respondent.
Ultimately, questions of notice and unfairness are overshadowed by the fact that, for Petitioner, time was never of the essence on the projects for the Six Schools, and, to such a crucial part of the bargain, attention must be paid.
For these reasons, Respondent has proved by clear and convincing evidence that, without justifiable cause, Petitioner is guilty of substantial deviations from project time schedules after written notice of such noncompliance with respect to the Six Schools, except Independence.
Count III: Nonpayment of Subcontractor and Supplier
From July 14 to September 21, 2010, Cemex supplied concrete materials to Respondent on walkway cover job sites. During March, June, July, and September 2010, Perfection performed aluminum subcontracting work on walkway cover job sites.
A Cemex representative called Mr. Kunard in December 2010 and stated that Petitioner had not paid Cemex for supplies that it had provided to Petitioner's walkway cover projects. Mr. Kunard immediately called Mr. Rousseau, who promised to take
care of this matter. (Tr. 416) At the hearing, counsel for Petitioner stipulated that Petitioner concedes that it did not pay Cemex an unspecified amount that it owed the supplier. (Tr.
453)
In late January or early February of 2011, Cemex
sought a writ of garnishment against Respondent to secure sums that it claimed that Petitioner owed Cemex. By Final Judgment entered April 4, 2011, the Fifteenth Judicial Circuit Court in Palm Beach County approved a settlement agreement between Cemex and Petitioner that provided for a judgment of $64,044.85, which amount the court ordered Respondent to pay directly to Cemex.
As Mr. Kunard testified, Respondent paid Cemex. (Tr 417-18)
Later in April, a Perfection representative called Mr. Kunard and stated that Petitioner had not paid Perfection for work on Petitioner's walkway cover projects. In a hearing involving a legal action brought by Perfection against Petitioner and Respondent, Mr. Rousseau testified, on August 31, 2011, that Petitioner owed Perfection about $48,000. (Resp. Ex.
57) In a deposition of a general manager of Perfection taken in connection with this administrative case, counsel for Petitioner stipulated that "there is no question that [Petitioner] owes Perfection money." (Resp. Ex. 227, p. 34)
By Final Judgment of Garnishment entered October 20, 2011, the Fifteenth Judicial Circuit Court in Palm Beach County
determined that Perfection shall recover $5406.66 from Respondent. By Satisfaction filed December 14, 2011, Perfection advised that Respondent had satisfied this judgment.
It is unclear whether Mr. Rousseau blames Respondent for Petitioner's failure to pay Cemex and Perfection. There is no suggestion in the record that Respondent ever failed to pay Petitioner timely on any pay application.
Mr. Rousseau complained that Respondent discontinued the DPOs with Perfection. It appears that Respondent did so with one or more schools in the last group of four schools on which Petitioner worked. The timing of the emergence of Perfection's claim and the discontinuation of DPOs suggests that Petitioner had failed to pay Perfection at an earlier point in time.
In any event, Petitioner had no contractual right to the use of DPOs. Also, a change order reduced the Contract Prices by the amount of the DPO plus saved sales tax for every school at which DPOs were used. Therefore, the presence or absence of DPOs would have not had a material impact on Petitioner's cash flow and its ability to pay this supplier and subcontractor.
The evidence establishes a nonpayment of over $60,000 to Cemex and a nonpayment of nearly $50,000 to Perfection. These constitute substantial nonpayments. Although the record
does not reveal how many times Petitioner failed to pay each obligee, even if there were only one nonpayment of each obligee, such nonpayments are repeated.
For these reasons, Respondent has proved by clear and convincing evidence that, without justifiable cause, Petitioner is guilty of a substantial or repeated failure to pay a subcontractor after Respondent has paid Petitioner for the work performed by this subcontractor and in accordance with approved requisitions for payment.
Count I: Maintenance and Cleanup of Limestone Creek
Limestone Creek employees were greatly inconvenienced by the construction at their school. Janitors were required to carry cleaning supplies extensive distances, students and teachers were unable to use a portion of the school grounds, the principal daily had to resecure the job site to ensure that students did not wander into areas that had not been restored, and the entire school community was unable to use the part of the campus where an annual fundraising celebration was held each October.
Much of this inconvenience was the result of the excessive duration of construction at Limestone Creek, as discussed in connection with Count II. But the long duration of construction must be distinguished from maintenance and cleanup for the purpose of determining the facts relevant to Count I.
Any anecdotal evidence to the contrary notwithstanding, satisfactory PPEs for Limestone Creek preclude findings adverse to Petitioner as to Count I from the start of construction through October 2010. As noted above, Respondent issued Petitioner PPEs for Limestone Creek on May 25, 2010, and August 31, 2010. Their respective scores for project management, customer sensitivity, and safety--which are the only categories on the PPE that might have a bearing on site maintenance and clean up--are 2.5, 2.3, and 3.0 and 3.5, 3.0, and 3.0. As noted above, a "2" is satisfactory, and a "3" is good. These scores indicate that Petitioner's site maintenance was satisfactory through about September 1, 2010.
The stop work order prohibited all activity on the Limestone Creek site for almost the entire month of September. On its face, the stop work order is unconditional, so Petitioner's responsibility for site maintenance was interrupted until October 7 when Respondent lifted the stop work order.
As noted above, on January 7, 2011, Respondent issued a PPE for Limestone Creek that contained a 1.8 for project management. For customer sensitivity and safety, however, Respondent assigned Petitioner scores of 2.0 and 2.5, respectively. Although more helpful to Respondent's Count I claims than the relevant scores in the two previous PPEs, these scores do not support a finding by clear and convincing evidence
that Petitioner's site maintenance and clean up practices were deficient.
Turning to site conditions in 2011, by this time, about 96% of the work at Limestone Creek had been done, so site disruption from active construction should have been limited. According to Mr. Kunard, as of January 7, 2011, the Limestone Creek construction site was deficient as to 11 items: lack of grading, lack of sodding, missing light fixtures, missing aluminum conduit covers, cracked concrete sidewalks, colored construction marking on sidewalks, loose rock in graded areas, excessively elevated drain pipe cleanouts, lack of touch up painting, damaged sprinklers, and an unresolved waiver request. However, the overall effect of this items was not so great as to produce a failing PPE on the same date.
The evidence most supportive of Count I is an email dated April 13, 2011, to Mr. Rousseau from Mr. Christie.
Mr. Rousseau had asked for final payment, less the retainage, for Limestone Creek. Mr. Christie visited the site and found a substantial amount of sod that had not yet been placed, a missing light fixture, spattered concrete on several new columns, colored markings on sidewalks, and cracked sidewalks where construction vehicles accessed part of the site. He declined to authorize final payment.
By email dated May 12, 2011, to Mr. Christie with a copy to Mr. Sanches, Principal Gibbs asked when the project would be completed. She noted among the items that were still unfinished as the leveling of the ground, the replacement of all of the sod, and the cleaning up of the sidewalks, which still had construction marking on them. In this email, Principal Gibbs mentioned that Limestone Creek was scheduled for another walkway cover job, and she hoped that Respondent would not use "this incompetent vendor" again.
By email dated later in the day, Mr. Christie informed Principal Gibbs that he rechecked the work area earlier that morning and found things about as he had found them a couple of weeks earlier. Mr. Christie noted cracked sidewalks where construction vehicles crossed the walkways, red lead chalk marks, and incomplete and uneven sod.
Nonetheless, Principal Gibbs' concern was well- founded. Despite having noted the above-described deficiencies, Mr. Christie advised the principal that Petitioner "will be awarded this addition to their original contract." Mr. Christie added that he thought that Petitioner had requested additional time to complete the project. Declining to comment further on discussions to which he had not been privy, Mr. Christie assured Principal Gibbs that he would "continue to work cooperatively and proactively" with Petitioner "to bring both the current
project and the new . . . project to fruition." He added that he shared Principal Gibbs' frustration. Mr. Christie's ability to provide such a facile assurance establishes only that he was unaware of the depth of the principal's frustration--with Petitioner, no doubt, but perhaps with the Facilities Services Department by this time too.
At about this time, Mr. Kunard signed a change order to authorize Petitioner to perform a substantial amount of additional walkway construction work at Limestone Creek.
Ms. Swan vetoed Mr. Kunard's decision because she refused to sign the purchase order, without which the change order was a nullity. Mr. Kunard was caught by surprise by this action because he had been previously unaware of the ability of the Purchasing Department to withhold approval of a change order.
In the face of satisfactory PPEs and a decision by the Facilities Services Department to award Petitioner additional work at Limestone Creek in May 2011, the recitation of unfinished items does not supply clear and convincing evidence of poor site maintenance and cleanup practices.
Although he has had considerable experience in contract management, Mr. Kunard tried to explain that he had incorrectly believed that he was required to award this additional work to Petitioner. He did not identify the source
of this so-called requirement. This explanation is rejected as implausible.
For these reasons, Respondent has failed to prove by clear and convincing evidence that, without justifiable cause, Petitioner is guilty of a substantial or repeated failure to comply with the Contract Documents failing to maintain and clean up the Limestone Creek site after written notice of such noncompliance.
Count IV: Return of Keys
To enable Petitioner to perform the work,
Ms. Banaszewski gave Petitioner's representatives keys to the 17 schools for which Petitioner had won contracts. The keys were of two types: gate keys and master keys. The gate keys unlocked the gates so as to provide access to the school grounds, but not any school buildings. The master keys unlocked the school buildings so as to provide access to every classroom, office, and other secure areas within these buildings.
Ms. Banaszewski provided master keys for those schools to which Petitioner required access to electric closets and other utility rooms in order to perform its work.
Ms. Banaszewski gave keys to Mr. Rousseau,
Ms. Rousseau, Mr. Vlock, and other employees of Petitioner. The employee receiving the keys signed an Assignment of Facilities Keys form that provides:
I accept the responsibility for the security of the above referenced keys and on [sic] the event any such keys are lost or stolen. I agree to immediately report the same to my department head or principal. I further agree that I will at no time reproduce or copy the above-referenced keys or keep any unauthorized keys in my possession.
The reference to the "my department head or principal" reveals this form is for use when a school assigns keys to its employees, such as teachers. The only other potentially relevant provision of this form states at the bottom: "All keys Returned to Window/Lock Department." These provisions do not impose upon the person receiving a key and signing this form a contractual duty to return the key.
By email dated June 21, 2011, to Mr. Rousseau,
Ms. Banaszewski identified the keys assigned to Petitioner and the sites at which Petitioner was not conducting work and asked that Petitioner return these keys "as soon as possible." By return email the same day, Mr. Rousseau stated: "I am aware of the keys that need to be returned. All project that has [sic] a CC and no Perfection punch list, will be returned on Monday."
In reply, by email on the same day, Ms. Banaszewski asked, "Please return all keys" and suggested that Petitioner obtain keys from individual schools, if Petitioner's employees needed access.
Construing these three emails together,
Ms. Banaszewski and Mr. Rousseau agreed that Petitioner would return the keys to the schools for which Petitioner had obtained CCs. At the time of these emails, among the schools that are the subject of Count IV, Petitioner had obtained CCs for only the following schools (CC issue date in parentheses): Spanish River (as noted above, May 11, 2011); Atlantic (February 4, 2011); Egret Lake (January 19, 2011), and Grassy Waters
(January 19, 2011). Petitioner did not obtain CCs for Lighthouse and Limestone Creek until August 2011--after the Superintendent's charging letter of the previous month. The record does not reveal when Respondent issued the CC for Dwyer. Thus, Respondent has failed to prove by clear and convincing evidence in the form of these three emails a clear demand for the return of the keys to Lighthouse, Limestone Creek, and Dwyer.
Except for testimony that changing the locks is expensive, the record is otherwise undeveloped as to the keys. Two omissions are particularly important. First, no employee of Petitioner admitted that Petitioner failed to return the keys. Ms. Banaszewski testified only that no one returned the keys to her. (Tr. 831, 840) This does not preclude the reasonable possibility that an employee of Petitioner may have returned keys to school administrators, the Facilities Management
Coordinator for the school, or another of Respondent's employees.
Second, Ms. Banaszewski admitted that she had never imposed a deadline on Petitioner for the return of the keys (Tr. 834). On July 16, 2012, Mr. Kunard sent Mr. Rousseau a comprehensive demand letter that covered the allegedly unreturned keys, but this letter is one year after the Superintendent's letter of July 2011, which is the charging document.
Complementing the above-described failure of proof concerning the keys is a failure of the Contract Documents to require Petitioner to return the keys. Count IV relies instead on provisions of the Contract Documents requiring site security, but, especially where there are no indications of any breaches in site security, such provisions cannot be construed to require Petitioner to return the keys.
For these reasons, Respondent has failed to prove by clear and convincing evidence that, without justifiable cause, Petitioner is guilty of a substantial or repeated failure to comply with the Contract Documents by failing to return the keys after written notice of such noncompliance.
Aftermath
The Superintendent's Letter and School Board's ratification have been detailed in the Preliminary Statement.
After the School Board's ratification, but before the time had run for Petitioner to request a formal hearing on the still- preliminary delinquency determination, Ms. Swan advised Petitioner's insurers or sureties, or both, of the action of the School Board, as though it were final action. Ms. Swan admits that she has not worked on a delinquency previously.
Unfortunately, even though the final determination of delinquency, subject to judicial review, will not take place until the issuance of a final order following this recommended order, Petitioner's sureties canceled Petitioner's bonds, and an individual who had guaranteed repayment to one or more sureties of $5 million withdrew his guaranty.
Ms. Swan did not attempt to rescind her letter, although Mr. Kunard, who had sent a similar letter to a surety, rescinded his. Mr. Rousseau testified that the damage had been done and, specifically, that Petitioner was no longer an active corporation and is out of business. (Tr. 2980)
In fact, Petitioner was still an active corporation at the time of the hearing, although it may be out of business. More importantly, the record does not reveal whether
Mr. Rousseau exerted reasonable efforts to restore his company's bonding and, if necessary, the $5 million guaranty. Obviously, if Petitioner is out of business, the record does not provide a basis for determining the cause or causes for this development.
CONCLUSIONS OF LAW
DOAH has jurisdiction over the subject matter.
§§ 120.569 and 127.57(1), Fla. Stat.; Fla. Admin. Code R. 6A-2.0010; SREF § 4.1(1)(f).
Florida Administrative Code Rule 6A-2.0010 incorporates SREF by reference. SREF § 4.1(1)(f) (2008) provides:
Delinquency. The decision to declare a contractor delinquent can only be made by the superintendent . . . and must be ratified by the board at its next regular meeting . . . . If a contractor is determined to be delinquent, after notice and an opportunity for a fair hearing, the board shall notify the contractor and his surety, in writing, that the contractor is disqualified from bidding work with the board as long as the delinquent status exists. A delinquent condition can be determined to be in effect when one (1) or more of the following conditions occur without justifiable cause:
A substantial or repeated failure to comply with contract documents after written notice of such noncompliance.
* * *
Substantial deviation from project time schedules after written notice of noncompliance.
Substantial or repeated failure to pay subcontractors after the board has paid the contractor for the work performed by the subcontractors and in accordance with approved requisitions for payment.
* * *
The burden of proof is on Respondent. Dep't of Bank.
& Fin. v. Osborne Sterne and Company, 670 So. 2d 932, 934 (Fla. 1996).
In a case involving a contractor that the Department of Transportation (DOT) had either declared delinquent or had suspended from eligibility to bid on transportation contracts, the Court stated that a proceeding suspending a certificate of eligibility is "highly penal." In addressing whether the DOT Secretary could delegate the duty to take action against a contractor, the court added: "The right to engage in business is an important right and interference with that right is a serious matter and should only be done in strict compliance with statute." White Construction Company, Inc. v. Dep't of Transp., 281 So. 2d 194, 197 (Fla. 1973).
Because the present proceeding is penal, Respondent must prove the material allegations by clear and convincing evidence. Osborne Stern, supra. And, as the White Construction
opinion notes, Respondent must strictly comply with SREF, as well as the provisions of any Contract Documents that Respondent cites as grounds for delinquency.
In alleging that Petitioner is delinquent, Counts I and IV rely on SREF Section 4.1(1)(f)1, Count II relies on SREF Section 4.1(1)(f)3, and Count III relies on SREF Section 4.1(1)(f)4. Each of these sections requires Respondent to prove
that a noncompliance is repeated or substantial, except for SREF Section 4.1(1)(f)3, which requires a showing of a substantial deviation from the time schedule, but not repeated deviations from the time schedule.
Each of these sections requires written notice of the noncompliance, except for SREF Section 4.1(1)(f)4, which applies to the failure to pay subcontractors.
Justifiable cause excuses any noncompliance under SREF Section 4.1(1)(f). Any acts or omissions of Respondent that caused noncompliance would constitute justifiable cause. Only some of Petitioner's claims of unfairness could have impacted Contract Times, but this recommended order considers all of them raised at the hearing. On the other hand, even if they had been timely raised by Petitioner--and they were not-- waiver and acquiescence are unavailable as a defense because they do not constitute justifiable cause excusing a noncompliance, but instead represent a form of forgiveness for a noncompliance.
Respondent has proved by clear and convincing evidence the material allegations of Counts II and III.
At the time of the Superintendent's Letter and subsequent School Board ratification, Petitioner was guilty of a substantial deviation from the time schedules of the Six Schools. It is irrelevant that Petitioner had obtained CCs by
that time for Spanish River and Watkins. Subsequent performance, even prior to the Superintendent's declaration of delinquency, does not alter the fact of a substantial deviation from the time schedules during the course of construction or otherwise insulate the guilty contractor from a delinquency determination.
Respondent provided Petitioner with written notice of these noncompliances by Mr. Kunard's email of April 4, 2011. Notice must be of an existing noncompliance. Because, at the time of the email, Petitioner was not yet behind at Independence, this notice fails for that school.
Mr. Kunard's email of July 13, 2011, does not serve as notice because it precedes the Superintendent's Letter by only one day. Although the SREF does not provide a timeframe for an opportunity to cure a noticed noncompliance, the notice is not a formality, and the apparent purpose of the provision of the SREF is to permit the noncomplying contractor a chance to rectify the situation.
No justifiable cause exists for Petitioner's substantial deviations from the time schedules at the five remaining schools of the Six Schools after receiving written notice of these noncompliances.
At the time of the Superintendent's Letter and subsequent School Board ratification, Petitioner was guilty of a
repeated and substantial failure to pay subcontractors after Respondent had duly paid Petitioner for the work performed by these subcontractors.
Perfection was a subcontractor, but Cemex was a supplier or "materialman," as a supplier is designated under Florida's Construction Lien Law, §§ 713.001, et seq., Fla. Stat. These are distinct terms under the Construction Lien Law.
§ 713.01(20) and (28). It is unclear why SREF includes subcontractors, but not suppliers, because both entities are "lienors" under the Construction Lien Law, § 713.01(18), so the consequence of nonpayment by the contractor exposes the owner to liability.
It is unnecessary to determine whether a "subcontractor," which SREF fails to define, includes a supplier or materialman. If not, Petitioner is guilty of a substantial failure to pay Perfection, but not a repeated failure to pay subcontractors.
No justifiable cause exists for Petitioner's repeated or substantial failure to pay Perfection or Perfection and Cemex after Respondent had duly paid Petitioner for the work performed by Perfection and Cemex.
Petitioner has failed to prove by clear and convincing evidence the material allegations of Count I. Clear and convincing evidence of unsatisfactory site maintenance and
cleanup practices at Limestone Creek is precluded by a barely satisfactory PPE in January 2011 and the decision by Mr. Kunard in May 2011 to award Petitioner additional work at Limestone Creek. If Petitioner's maintenance of the site was not so bad that Mr. Kunard was prepared to award more work to Petitioner, then it was not so bad as to warrant a finding in favor of Respondent as to Count I.23/
Respondent has failed to prove by clear and convincing evidence the material allegations of Count IV. First, the Contract Documents do not impose on Petitioner any duties as to the keys. The cited provisions address such matters as site security, but, particularly in a penal case, Respondent may not stretch the meaning of such provisions so as to create requirements as to keys that do not exist in the Contract Documents.
Second, even if the Contract Documents required Petitioner to return the keys, Respondent failed to prove by clear and convincing evidence that Petitioner did not do so.
At times during the hearing, Petitioner's counsel contended that the fair hearing promised by SREF § 4.1(1)(f) was to have taken place at the School Board meeting at which the School Board ratified the Superintendent's Letter. Counsel seemed to be laboring under the same misunderstanding that caused Ms. Swan prematurely to inform Petitioner's sureties of
what was still preliminary agency action. The hearing conducted by Administrative Law Judge Powell was the fair hearing, and the final order that follows this recommended order is the operative ratification.
The record is not sufficiently developed to allow a determination that Petitioner has ceased doing business, that it ceased doing business due to Ms. Swan's premature letter, and that Petitioner exerted all reasonable efforts to rectify this situation with his sureties and its guarantor. Had these facts been developed at the hearing, this Administrative Law Judge might have recommended that the one-year delinquency period date back to Ms. Swan's letter. But, on the present record, the one- year delinquency period must start with the final order, subject, of course, to judicial review.
It is RECOMMENDED that the School Board enter a final order ratifying Count II of the Superintendent's Letter for five of the Six Schools (except Independence Middle School), ratifying Count III of the Superintendent's Letter, declining to ratify Counts I and IV of the Superintendent's Letter, and determining
that Petitioner is delinquent for one year from the date of final order.
DONE AND ENTERED this 16th day of December, 2013, in Tallahassee, Leon County, Florida.
S
ROBERT E. MEALE
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 16th day of December, 2013.
ENDNOTES
1/ Counts I, III, and IV allow Respondent to prove a substantial or repeated deviation. Count II requires Respondent to prove that the alleged deviation from the time schedule was substantial.
2/ Most of what Respondent has designed as "Contract Documents" are identified by section numbers. Specific provisions within a Section are identified as, for instance, Paragraph 00100.1.1.
To the extent possible, this recommended order will conform to the citing practices in the charging documents and identify provisions of the contract documents in this manner.
Additionally, this recommended order will use capitalized terms as they are used in the various contract documents.
3/ In general, this recommended order preserves the capitalization used in the Contract Documents when citing these documents because such use suggests defined terms. For the most part--the primary exception being the use of "Design Builder"--
this recommended order reverts to standardized capitalization when not citing the Contract Document.
4/ These are a lot of provisions about two positions that were unfilled at the time in question. Respondent's witnesses could not identify the School Board designee for the walkway cover projects, and the position of Program Management Director was vacant during this time. On a brighter note, as discussed below the text associated with this endnote, Terrence Bailey was the Project Manager of the walkway cover projects.
5/ The conflict in this case was between high-pressure sodium and fluorescent fixtures. Because metal halide fixtures played no role in this case, they will not be further referenced.
6/ Again, the Six Schools are Spanish River, Lighthouse, Limestone Creek, Watkins, Independence, and Jupiter Farms.
7/ An interesting feature of the Notices to Proceed for the Six Schools is that they were issued on May 12, 2010. As noted above, the Contract Time did not start until the Notice to Proceed was issued, but, as noted in Paragraph 00510.4 of the Owner-Design/Builder Agreement, the work had to be Substantially Completed by the date specified in the Notice to Proceed.
Despite the above-quoted language of the General Conditions and Design/Build Criteria, no Contract Document identifies the date of Substantial Completion or Final Completion in terms of a number of days of Contract Time; instead, as indicated in the Owner-Design/Builder Agreement, these two completion dates are identified as calendar dates in the Notices to Proceed.
Petitioner has never contended that the dates of Substantial Completion and Final Completion should be recalculated based on the issue date of the Notices to Proceed for the Six Schools, so the initial dates of Substantial Completion and Final Completion will be derived from the Notices to Proceed, even though these notices were issued over two months after the March 9 Commencement Dates for each of these six projects, as apparently noted in Mr. Hogarth's email to Ms. Banaszewski of June 23, 2010, when he noted that Petitioner was behind by two months when it submitted its drawings and plans to the Building Department and asked if the notices were issued later than scheduled or whether a time extension had been proposed.
8/ As testified by Mr. Kunard, Substantial Completion may take place without the completion of the lights. (Tr. 1473) Mr.
Kunard testified that he agreed to this concession, which he
used with other Design Builders, to avoid subjecting Petitioner to liquidated damages. (Tr. 1887) However, the record provides no basis to determine (or calculate) Substantial Completion Dates for any of the Six Schools, so this recommended order focuses on Final Completion Dates, not Substantial Completion Dates.
9/ This exchange may explain why some of the Notices to Proceed seem to have been issued late, as discussed in endnote 7 above. The Notices to Proceed may be amended notices that were issued following this exchange of written communications.
10/ It is unclear why Mr. Moghadam, an employee of the Building Department, is making suggestions about alternatives to specifications of the Design/Build Criteria, which is exclusively in the jurisdiction of the Facilities Management Department. This is an early example of a lack of effective coordination among Respondent's departments in this case.
11/ The phrasing of Mr. Bailey's clarification could support an interpretation that the 8"-pipe requirement is inapplicable at parent drop off and bus loops; however, the Design Builders would not have misconstrued Mr. Bailey's language in this fashion. In this round of covered walkways--as well understood by the Design Builders--Respondent was seeking to replace splash blocks that had been used in past projects with underground drainage. In this round of covered walkways, Respondent was accepting splash blocks only where adjoining improvements, such as driveways, precluded the installation of underground drainage.
12/ Petitioner submitted a third pay application for Lighthouse, probably on September 1, but this pay application is missing from the record.
13/ Petitioner has never disputed that its approved drawings required 8" drainage pipes. In the second iteration of its first claim for change orders dated November 23, 2010, discussed generally below the text associated with this endnote, Petitioner stated that it learned at a stand up review meeting held on April 9, 2010, with representatives of the Building Department that the drainage pipes would have to be 8" in diameter. This meeting took place before the scheduled dates for the submission of drawings on all Six Schools, except Spanish River. Although the drawings for Spanish River were due to be submitted on March 31, 2010, they were actually submitted
on April 27, 2010--18 days after Respondent informed Petitioner that its drawings would have to include 8" diameter drainage pipes. The claim that late notice somehow relieved Petitioner of its obligation of installing pipes conforming to its drawings is thus unpersuasive.
14/ The complaints about underground installations of other Design Builders--either the size of the drainage pipes, the boot of wet columns, or both--was based in part on the nocturnal excursions of an agent, employee, or representative of Petitioner or Mr. Rousseau to work sites of other Design Builders to dig up already-completed work to expose installed plumbing elements. At least with respect to this incident, the timeworn phrase, "digging up the facts," loses its metaphorical quality.
15/ Although the change orders extend the Substantial Completion Date for schools, neither they nor any contemporaneous documentation restate these dates, and the Administrative Law Judge was unable to reconstruct them from the record.
16/ The total does not equal $126,124 because the change orders applied to more than the six schools addressed by Count II.
17/ This critical determination that the italicized statements are not part of Mr. Kunard's email is based on the text of the portion of the email in normal font. Toward the end, the email in normal font requests new Final Completion Dates from Mr.
Rousseau. At the bottom of the entire email, in the font that has been italicized in this recommended order, Mr. Rousseau adds a note: "Jim, [Petitioner] is pushing each project aggressively. All work will be completed in timely manner (ASAP)." Additionally, the portion of Respondent Exhibit 62 containing the April 4 email(s) includes, on the preceding page, a one-line email dated April 5, 2011, to Mr. Kunard in which Mr. Rousseau states: "Please see my comments in Blue below." The April 4 email in the exhibit is not in color. Mr. Kunard confirmed this interpretation in his testimony. (Tr. 371)
18/ Respondent Exhibit 224, subpart 14.
19/ For some reason, perhaps an abundance of caution, Mr. Kunard has often calculated the number of days by which Petitioner missed its deadlines as though the proposed second round of change orders had become effective. There is no reason whatsoever for such a contingent calculation. Respondent's
offer of an extension of time in the proposed second round of change orders was conditioned on Petitioner's acceptance of a specific amount of compensation and release of any claims for additional compensation. When Petitioner declined this offer, the Final Completion Dates set forth in the first found of change orders remained in effect.
If the Final Completion Dates proposed by Respondent had taken effect, which they did not, Petitioner's performance would still have been untimely, although, of course, by a fewer number of days. In this scenario, Petitioner would have missed the Final Completion Dates by less than 30 days at Spanish River and Watkins, but by more than 90 days at the remaining schools.
20/ By this point, given the extensive extensions already provided, the relatively short amounts by which Petitioner was again not in compliance with the timeframes of the Contract Documents, when measured as of the date of the April 4, 2011, email, were substantial.
21/ Conveniently, the same fraction obtains whether one considers that Petitioner was one of three Design Builders or that Petitioner was constructing 17 of the 50 projects.
22/ Although, as mentioned above, it is possible that Petitioner became chagrined at Respondent's unwillingness to meet Petitioner's demands in a second round of change orders, nothing in the record directly indicates that this was the case. As discussed in the next section, the nonpayment of Cemex and Perfection was brought to Respondent's attention in December 2010 and January 2011, and Respondent's liability on these matters was established in April and October 2011. Although cash-flow problems might have impeded progress at the Six Schools, again, nothing in the record directly so indicates.
Ultimately, unless the reason for a lack of progress constituted justifiable cause--and the record does not so indicate--the actual reason is unimportant.
23/ By contrast, Petitioner's deviation from the time schedules was obvious and thus unaffected by Mr. Kunard's decision in May 2011 to award more work to Petitioner at one of the Six Schools.
COPIES FURNISHED:
Michael D. Brown, Esquire Brown and Associates Suite 100
2620 Lakeshore Drive
Riviera Beach, Florida 33404
Kathelyn Jacques-Adams, Esquire 3318 Forest Hill Boulevard
West Palm Beach, Florida 33406
Matthew Carson, General Counsel Department of Education Turlington Building, Suite 1244
325 West Gaines Street Tallahassee, Florida 32399-0400
Pam Stewart, Commissioner of Education Department of Education
Turlington Building, Suite 1514
325 West Gaines Street Tallahassee, Florida 32399-0400
E. Wayne Gent, Superintendent Palm Beach County School Board 3300 Forest Hill Boulevard, C-316
West Palm Beach, Florida 33406-5869
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 03, 2014 | Agency Final Order | |
| Dec. 16, 2013 | Recommended Order | One year delinquency for school contractor guilty of substantial deviation from time schedule, after written notice, without justifiable case and substantial and repeated failure to pay subcontractors without justifiable cause. |
