vs. ) CASE NO. 85-2225
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William B. Thomas, held a formal hearing in this case on August 12, 1985, in Tallahassee, Florida. Subsequently, the parties submitted proposed findings of fact and conclusions of law which have been considered. A ruling has been made on each proposed finding of fact in the Appendix to this Recommended Order.
For Petitioner: Judy Rice, Esq.
For Respondent: Frank A. Baker, Esq.
By letter dated June 12, 1985, Baxter's Asphalt & Concrete, Inc. requested an administrative hearing to protest the determination of the Department of Transportation that Baxter was delinquent in work on a road repaving contract. In this proceeding, the Department seeks a determination that Baxter was delinquent on this road project, and further seeks to suspend Baxter as a subcontractor on Department projects for a period of
54 days.
Baxter was awarded a contract by the Department for state job number 49010-3542 on July 15, 1984, in the amount of
$981,051.17. This project involved the repaving of State Road
30 (US 98) for a length of 5.23 miles in Apalachicola, Florida. The work consisted of light grading, resurfacing existing pave- meet, applying leveling asphalt, and applying a final surface course. In addition, existing box culverts under the road were to be extended on both sides of the road at some 11 locations, and existing drainage structures were to be worked on.
Baxter's bid, which was incorporated into the executed contract, stated that it agreed to:
. . . fully complete all necessary work under the (contract) within not more than
180 calendar days. It is understood and agreed that the date on which calendar-days will begin to be charged to the project shall be either (1) the 31st calendar day from the date of issuance of the initial notice to begin work, or (2) the date on which the contractor actually begins work, whichever date is the earlier.
This statement was signed by Louie Seay, Baxter's Vice President.
Pursuant to the contract, the price the contractor bids for contract items includes the cost of all expenses, including labor, to get the job done within the required amount of time. For example, one contract item provides, "The quantities determined as provided above shall be paid for at the contract unit price per linear foot for Precast Concrete Box Culvert of the size shown in the proposal. Such price and payment shall be full compensation for all work specified in this Section . . ."
In accordance with Department procedure, the contractor was required to submit a proposed Work Progress Schedule Chart to the State Construction Engineer. The Work Progress Schedule Chart submitted by Baxter showed its plans to do various aspects of the work over the course of the 180-day contract time. The final approved plan indicated that Baxter planned to begin drainage structure work about the 30th day of the contract time, and pursue this activity until the 180th day. Baxter's plan further indicated that road surface operations were planned to be done concurrently with the work on the drainage structures. Drainage work can be performed concurrently with resurface work. Baxter began work on October 2, 1984, which was the first chargeable day under the terms of the contract.
Baxter substantially completed and the Department conditionally accepted the job on August 3, 1985, contract day number 303.
Don Roberts, a state construction engineer in the Department's Central Construction office, monitors the progress of ongoing contracts, prepares delinquency notices, and sees or prepares all responses to contractor extension requests. Under the operation of the rule known as "the 20 percent test," Rule 14-23.01(3)(b) 2, Florida Administrative Code, Baxter's work had become delinquent in mid-February 1985. At this time, the dollar value of Baxter's completed work (actual dollars earned by virtue of work completed) as a percentage of the total dollar amount of the contract, was 20 percentage points behind the percent of contract time elapsed, and at this time Baxter's completed work was more than 20 percent behind the contractor's work progress schedule.1 Under subsection (b)1 of Rule 14- 23.01(3), Florida Administrative Code, which applies when the contract time has expired, Baxter's progress was also delinquent. Under this "contract expiration test," Baxter was delinquent during the period between expiration of the contract time of 180 days without completion of work, until the work was conditionally accepted on August 3, 1985, which was contract day number 303. At the expiration of the contract time on April 3, 1985, Baxter had earned approximately 33 percent of the total contract price. Under the "20 percent test," Baxter was delinquent 166 days, and under the "contract expiration test," Baxter was delinquent 123 days.
The Department notified Baxter by preliminary telegram and certified letter on March 11, 1985, that the work progress was considered delinquent, and of the opportunity to request an extension of contract time only for such delays as are allowed
in Article 8-7.3.2 of the standard specifications. Baxter submitted a claim for an extension due to weather conditions. After consideration of the request by the resident engineer's office at Springhill Road, and by the Central Office, the extension request was denied by the Department. A final notice of delinquency (telegram and certified letter) was sent to Baxter on May 29, 1985.
K. Sheppard Davis, Department engineer in the Specifications office, has reviewed proposed project plans for
19 years. He estimates what the contract time should be for proposed projects. By applying the Department's standard guidelines, the contract time should have been 100 days, and the original Department calculations had proposed a 100-day limit. Nevertheless, the Department advertised the contract for 180 days.
Although 56 actual working days were required to do the job, additional time is built into a contract. The Department applies a conversion factor of 1.825 to the actual working days to arrive at a calendar day contract estimate. The additional time allowed by this conversion factor provides time in the contract for no work on Saturdays and Sundays, no work on one weekday each week for inclement weather, and 9 holidays a year.
Prior to the 180-day chargeable contract time, Baxter was allowed 30 days by the Department for preliminary time to assemble, prepare and set-up for work.
The time allotted for project completion, as advertised in the project description, is a material item of the contract. The 180 day contract time was ample to do the job, and there was sufficient additional time provided to allow for adverse weather.
M. Herman McWaters, assistant engineer in the Department's Springhill Road (Tallahassee) office, which supervised construction of this project, described basic stages of work on this 5.23 mile road resurface job. The first and second of four surface applications to the road surface are celled levelinq (tandem operation - laying down stone and then asphalt over-build), then Type S asphalt c concrete is applied, followed by final application of another layer of Type S asphaltic concrete. After each surface application, the road is useable. The subject project required extension of existing box culverts and/or cross drain pipes. All asphalt layers except the final layer can be laid while drainage and other contract
items are being performed concurrently. Baxter performed all asphalt surface work in 23 days. The final layer, which could not be applied until most of the project work was done, was applied by Baxter in five days. Prior to beginning work, Mr. Louis Seay of Baxter originally told the Department that he planned to complete the first three layers of road work in the first three weeks of the contract time.
Baxter did little or no work from October of 1984 through February of 1985, as indicated by its lack of earnings and the daily diary. Baxter voluntarily initiated chargeable contract time by beginning asphalt work on October 2, 1984. It continued to apply the leveling course for four days total. After the fourth contract day, Baxter did no further asphalt or road work until contract day 206. No work was done from contract day 5 through day 20, during which the daily diary2/ indicates good weather conditions. Weather was not a valid excuse for delay of any work required by the contract. On contract days 21-26, 28-31, and day 34 subcontractor Glen Powell Company worked on side drain work. There was no work done through contract day 53 during which time weather conditions were good, except for contract day 45. On contract day 54, C & C Partnership Company, a subcontractor, began work on the box culvert extensions, but no further work was done on the project from contract day 55 until C & C returned on day 82. C & C worked on days 82-83, 87, 95-99, 101-103, 105-106, 115-116, 119- 120, and 122-1277 until it was dismissed by Baxter. However, the work performed by this subcontractor could have been started on the first day of the contract. Baxter testified that they did not monitor this subcontractor's performance in the early months, but became very concerned after January 15 (contract day
102) when the subcontractor had only generated $3,000 to $4,000 in earnings out of $180,000 that it had subcontracted for. Nevertheless, the contractor is sent copies of the daily diary and weekly summary which records the location at which any work was performed, the type of work performed, and gives the subcontractor or contractor doing the work. Baxter failed to adequately manage, supervise, and direct the prosecution of the subcontract work. Baxter took over C & C's work on February 15, 1985 (contract day 137) until another subcontractor could take over. Baxter could have worked on the box culverts themselves concurrently with any subcontractor (i.e., on opposite ends of the project).
The amount of time a subcontractor actually takes to perform a job is not indicative of how many days is required to do that job. Other variables such as the number of persons
utilized, experience, proficiency, etc., factor into how long a certain subcontractor takes to do a job.
After notice of delinquency, Baxter submitted an extension request based on a claim of adverse weather. Utilizing the Springhill office's analysis of each day claimed as adverse weather conditions, the Department denied the extension request. The project engineer concurred that adverse weather was not a bona fide reason for delay. For some days of
actual bad weather, the prime and subcontractors worked all day. The contract required that the temperature be 60 degrees before the second level of surface treatment (asphalt) could be applied. The Department did not grant any extension due to temperatures below 60 degrees because on the days when such temperatures occurred Baxter had not finished the leveling course, which had to be done first. By industry practice, a contractor should finish the first course before beginning the second course. The second level could have been done intermittently if the temperature was too cool one day but not the next. The National Weather Service climatological data submitted with the extension request, showed that on many days claimed as adverse weather there was only a trace of moisture, one hundredth of an inch, or three-hundredths of an inch of rain, which is not adverse working weather. The on-site weather observations recorded in the daily diary also support & finding that weather did not affect the work progress. Thus, the extension request was properly denied.
The Department's standard procedures allow one day of contract time for laying 15,000 square yards of sod. Herman Green, the project engineer on this job, reviewed the daily on- site inspection reports, compiled the engineers' weekly summary, and visited the project once or twice a week. A contractor is expected to have equipment to handle drainage problems, and is expected to check out the physical area involved in drainage items before bidding on a contract. During the progress of the work Baxter did not inform him of any drainage problems which could not have been anticipated before the job was bid. No valid drainage delay excuses were presented by Baxter.
Baxter is an experienced contractor, having performed about 100 million dollars worth of work for the Department. Its bid proposed that Baxter would perform all work in 180 calendar days. It could have performed the total resurfacing operation within the contract time.
The contractor's work progress schedule and the contract time allowed are factors relied on by the Department in its planning, management of manpower and resources, and budgeting of monthly expenditures. When a contractor exceeds its contract time on a project, it results in management and personnel allocation problems and increased costs (overtime). When a contractor is not on the job during contract days, the Department still has to send inspectors daily to monitor the safety and weather conditions.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this case.
Section 337.16, Florida Statutes (1984 Supp.), provides in part:
A contractor shall not be qualified to bid when a an investigation by the depart- ment discloses that such contractor is delinquent on a previously awarded contract, and in such case his certificate of qualification shall be suspended or revoked.
A contractor is delinquent when unsatisfactory progress is being made on a construction project or when the allowed contract time has expired and the contract work is not complete. Unsatisfactory progress shall be determined in accordance with the contract provisions.
Rule 14-23.01, Florida Administrative Code, provides in part:
Disqualification. Any contractor declared delinquent under the provisions of this Rule shall be disqualified from further bidding and shall be disapproved as a subcontractor during the period the contractor's certificate of qualification is suspended or revoked. . . .
Determination of Delinquent Status.
A contractor may be declared delinquent because of unsatisfactory progress on a contract with the Department, determined as follows:
The contract time allowed has not been entirely consumed, but the contractor's progress at any check period does not meet at least one of the following two tests:
The percentage of dollar value of completed work with respect to the total amount of the contract is within 10 percentage points of the percentage of contract time elapsed.
The percentage of dollar value of completed work is within 10 percentage points of the dollar value which should have been performed according to the contractor's own progress schedule on file with and approved by the Department.
A contractor shall be considered delinquent because of unsatisfactory progress on a contract with the Department under the following circumstances:
The contract time allowed has been consumed and the work has not been completed.
The contract time allowed has not been entirely consumed, but the contractor's progress at any check period does not meet either of the two tests described in subsection "a" above, modified to substitute
20 percentage points in place of 10.
Within 10 days of receiving a Notice of Delinquency, a contractor may submit a request for an extension of contract time to the Department of Transportation. The following issues may be considered by the Department of
Transportation in determining whether a contractor is entitled to additional contract time:
Whether the contract time allowed was sufficient and reasonable. However, the question of sufficiency of the contract time will only be considered by the department in situations where the contractor prior to the expiration of 50 percent of the allowable contract time has notified the department that it considers the contract time to have been insufficient.
Whether the contractor was delayed in the performance of the job by factors beyond his control. It shall be an absolute defense to a charge of delinquency when the contractor can demonstrate that he has expended his best efforts in a diligent attempt to complete the job on time or in an expeditious manner, and was delayed through no fault on his part. A contractor who was delayed through no fault or neglect on his part will not be determined to be delinquent. However, a finding that a contractor did not have sufficient personnel, equipment and finances to complete a job in a timely manner shall be prima face evidence that the contractor was at fault and therefore delinquent. In all proceedings to determine whether a contractor is entitled to additional time or is delinquent, the contractor shall have the affirmative burden of proof to establish any defense allowable under this rule of the contract specifications.
Baxter's contract incorporated the 1982 edition of the Department's Standard Specification, and subsequent amendments to these standard specifications were contained in the special provisions within the contract document. The Standard Specifications provide that:
8-3 Prosecution of Work
8-3.1 The contractor shall commence work in accordance with his approved working schedule and shall provide sufficient labor, materials and equipment to insure the completion of the work within the time limit set forth in the proposal. ~
8-5 Qualifications of Contractor's Personnel
The contractor shall assure that all superintendents, foremen and workmen employed by him are competent, careful and reliable.
8-7.3.2 Contract Time Extensions
Rains or other inclement weather conditions and related adverse soil conditions will be considered as the basis for granting of a time extension only when such conditions are unseasonable, provided that the project records indicate that they did in fact delay one or more controlling items of work.
8-8.1 General_
Time is an essential element of the contract, . . .
Baxter was delinquent in its progress of work from mid-February, and remained delinquent for a period of 166 days, under the 20 percent test of Rule 14-23.01(3)(b)2,
Florida Administrative Code.
Under the expiration of contract test (subsection(b) 1 of this Rule), Baxter was delinquent for a period of.123 days dating from the end of the contract time until the project was completed. The contract time was sufficient and reasonable, based on a 100 day original estimate. The Department seeks 54 days of delinquency.
The Department properly denied Baxter's extension request based on claims of inclement weather. The weather was not a cause for delay of work progress. The weather was not unseasonable, nor was it the cause of delay of any controlling item of work.
Baxter's bid and the contract agreed to complete the job in 180 days. It was Baxter's responsibility to bid a price at which it could employ resources to complete the job on time. However, Baxter did not complete the job on time or in an expeditious manner, allowing a large part of the contract time to elapse with no significant work performance.
Essentially, Baxter contends that the failure of its subcontractor, C & C Partnership, to properly perform under its subcontract resulted in the failure of Baxter to complete the project on time. However, because of C & C's past work history with Baxter, its work was not closely supervised by Baxter in the early contract period. Because C & C's performance as a subcontractor was not adequately managed by Baxter, it is not a
valid reason for delay of the project because it was not a factor beyond the control of the contractor. Rule 14 23.01(3)(c)2, Florida Administrative Code, imposes upon Baxter the affirmative burden of proof to establish any defense claimed, and the evidence is not sufficient to support a finding or a conclusion that the delay caused by C & C Partnership was beyond Baxter's control, or that Baxter expended its best efforts to complete the project on time or in an expeditious manner.
RECOMMENDED that the Department of Transportation enter a Final Order declaring that the certificate of qualification of Baxter's Asphalt and Concrete, Inc., be suspended, and that Baxter be disapproved as a subcontractor for a period of 54 calendar days from the date of the Final Order.
THIS RECOMMENDED ORDER entered this 19th day of November, 1985 in Tallahassee, Leon County, F1orida.
WILLIAM B. THOMAS
FILED with the Clerk of the Division of Administrative Hearings this 19th day of November, 1985.
1/ The contractor's work progress schedule is a planning tool proposed by the Contractor and approved by the Department. It indicates when the Contractor plans to do certain categories of work over the contract period, and is used for monitoring actual progress versus planned progress, but does not prohibit the contractor from rearranging the actual prosecution of work.
2/ Daily diary observations of work performed and weather conditions are made by on-site inspections by Department inspectors.
1-18. Accepted.
Judy Rice, Esq.
Haydon Burns Bldg., M.S. 58 Tallahassee, Florida 32301-8064
Frank A. Baker, Esq.
Hon. Thomas E. Drawdy Secretary
