STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF TRANSPORTATION, )

)

Petitioner, )

)

vs. ) CASE NO. 89-4070

)

GAMM CONTRACTING COMPANY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on November 1, 1989, at Tampa, Florida.

APPEARANCES

For Petitioner: Jason O. Barber, Esquire

605 Suwanee Street

Tallahassee, Florida 32399-0458

For Respondent: Charles F. Ketchey, Jr., Esquire

M. Eric Edginton, Esquire Barnett Plaza, Suite 2400

101 E. Kennedy Boulevard Tampa, Florida 32602-5701

STATEMENT OF THE ISSUES

1. Whether Gamm Contracting Company (Gamm), Respondent, is in default on Contract 89095-3424 and its certification to bid on Department of Transportation (DOT) contracts subject to revocation.

   
   

2. The critical issue presented in this case is whether Respondent's refusal to repair, without first being issued a supplemental agreement, damage to the project (89 095- 3424) caused by a third party prior to acceptance by DOT with no contributory negligence by Respondent, is grounds for revocation.

PRELIMINARY STATEMENT

By letter dated June 23, 1989 (Exhibit 4), DOT, Petitioner, notified Gamm, Respondent, that by reason of Respondent's failure to repair damage to a southbound rest area building resulting from an earlier automobile accident, its work on Contract No. 89095-3424 was in default, and DOT would take appropriate steps to complete the project.

By letter dated July 3, 1989 (Exhibit 5), DOT notified Gamm that DOT intended to revoke Gamm's Certification of Qualification. As grounds therefor, it was alleged that Gamm is in default on its contract with the Department. By

letter dated July 13, 1989, Gamm, by and through its attorney, requested a formal administrative hearing to challenge DOT's grounds for revoking its Certification of Qualification, and these proceedings followed.

At the hearing, Petitioner called three witnesses (two in rebuttal), Respondent called two witnesses and 23 exhibits were admitted into evidence.

Since there is no dispute regarding the operational facts here involved, proposed findings submitted by the parties are accepted. Those not included herein were deemed unnecessary to the conclusions reached.

FINDINGS OF FACT

1. Gamm, Respondent, was awarded the contract as prime contractor to construct rest areas on 1-95 at the Martin County rest area southwest of Stuart, Florida. The job number of this contract is 89095-3424 (Exhibit 1).

   
   

2. The project proceeded satisfactorily and was approximately 95% complete on December 7, 1988 when, around 8:45 a.m., a motorist southbound on 1-95 suffered an epileptic seizure, his car proceeded through the off-ramp barricade at the rest area under construction and collided with the west end of the south bound rest area building. The collision caused extensive damage to the wall of this building with estimated repair costs of approximately $46,000.

   
   

3. On January 4, 1989, Gamm was notified by DOT that, pursuant to Section 7-14 of the Standard Specifications (Exhibit 2), DOT was holding Gamm responsible for the repairs to the building damaged by the automobile collision on December 7, 1988 (Exhibit 8).

   
   

4. By letter dated January 12, 1989 (Exhibit 8), Gamm denied the contract placed the risk of damage to the building by a third party, without fault on the part of Gamm, on Gamm Contracting as contended by DOT.

   
   

5. Considerable correspondence followed between Gamm and DOT in which DOT pursued its position that Gamm was responsible for the damage, and Gamm refused to make the repairs absent a supplemental agreement to cover the costs of repair.

   
   

6. By letters dated March 3, 1989 (Exhibit 13) and May 19, 1989 (Exhibit 17), Gamm notified DOT of "presumptive completion" of the project and all work required under the contract is complete.

   
   

7. DOT responded to these letters by letters dated March 6, 1989 and May 23, 1989, by pointing out incomplete items on the contract. As of the date of the hearing, Gamm had not obtained the required permit from the Department of Environmental Regulation for the well to provide water to the project. Accordingly, the building was not ready for use.

   
   

8. At no time has DOT accepted this project as being completed by the contractor. By letter to Gamm dated June 23, 1989 (Exhibit 4), DOT declared the contract to be in default because repairs to the building caused by the automobile accident had not been repaired, and Gamm had stated it would not repair damage to this building.

   
   

9. DOT Standard Specifications for Road and Construction (Exhibit 2) are an integral part of the contract entered into between Gamm and DOT to construct this rest area.

10. Following the accident, the resident engineer at the project site directed Gamm to make the necessary repairs. Gamm refused without first receiving a supplemental agreement covering the cost of repair.

    
    

11. The motorist's insurance carrier has offered the insurance coverage which is approximately $30,000 toward repair of this damage.

    
    

12. DOT, pursuant to the terms of the contract, has withheld some $48,000 of the amount owed Gamm upon completion of the contract pending final acceptance.

    
    

13. Gamm bases its position that it is not responsible to repair this damage on Section 7-14 of the Standard Specifications (Exhibit 2) which provides in pertinent part:

    
    

    Until acceptance of the work by the Department it shall be under the charge and custody of the Contractor and he shall take every necessary precaution against injury or damage to the work by the

    action of the elements or from any other cause whatsoever, arising either

    from the execution or from the nonexecu- tion of the work. The Contractor shall rebuild, repair, restore and make good, without additional compensation, all injury or damage to any portion of the work occasioned by any of the above causes before its completion and acceptance except that in the case

    of extensive or catastrophic damage the Department may, at its discretion,

    reimburse the contractor for the repair of such damage due to unforeseen causes beyond the control of and without the fault or negligence of the Contractor, including but not restricted to Acts of God, of the public enemy or of govern- mental authorities.

    
    

14. Section 5-5 of Exhibit 2 provides for the work on the contract to be performed under the supervision of the engineer designated to supervise the construction and that he shall decide all questions, difficulties and disputes, of whatever nature, arising relative to interpretation of the plans, construction, prosecution and fulfillment of the contract and as to the character, quality, amount and value of any work done, and materials furnished, under or by reason of the contract.

    
    

15. This contract provision is generally considered by the road and bridge construction industry to require the contractor to perform any work directed to be performed by the engineer on the project. If the contractor believes he should be paid for such work, his recourse is to file a claim.

16. Section 5-12 of Exhibit 2 provides that where the Contractor deems that extra compensation is due him for work or materials not clearly covered in the contract or not ordered by the engineer as extra work, the contractor shall notify the engineer in writing of his intention to make a claim for extra compensation before he begins the work on which he bases his claim.

    
    

17. Section 5-10 of Exhibit 2 provides the contractor shall maintain all work in first-class condition until it has been accepted as a whole and has been given final acceptance by the engineer. This provision is generally interpreted by the construction industry to mean the contractor is responsible to maintain the property and to repair any damage occasioned thereto prior to final acceptance by DOT.

    
    

18. In addition to refusing to repair the damage to the building caused by the errant automobile, Respondent has not obtained the final permit from the Department of Environmental Regulation for the well. This permit is required before water can be supplied to the project and the rest station be placed into operation. Accordingly, apart from the damaged building, the project is not complete and ready for acceptance. However, Respondent does not contest the requirement that he obtain the permit needed before water can be made available to the facility. This leaves in dispute only the responsibility for repairs to the damaged building.

    
    

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

20. Section 337.16, Florida Statutes (1987), provides in pertinent part:

    
    

    1. A contractor shall not be qualified to bid when an investigation by the department discloses that such contractor is delinquent on a previously awarded contract, and in such case his certificate of qualification shall be suspended or revoked. Any contractor whose certification of qualifica- tion is suspended or revoked for delinquency shall also be disapproved as a subcontractor

       during the period of suspension or revocation.

       1. A contractor is delinquent when unsatis- factory progress is being made on a construc- tion project or when the allowed contract

          time has expired and the contract work is not complete.

    2. For reasons other than delinquency in progress, the department, for good cause, may deny or suspend for a specified period of time or revoke any certificate of quali- fication. Good cause includes, but is not limited to, circumstances in which a con- tractor or his official representative:

       (c) Fails to comply with contract require- ments, in terms of payment or performance record, or to timely furnish contract documents as required by the contract or by any state or federal statute or regulation.

21. Thus the issue here presented boils down to whether the department has good cause to suspend or revoke the certificate of qualification of Gamm Contracting Company.

    
    

    It is not disputed that Respondent did not complete the project and refused to perform the work the engineer directed the contractor to perform. This is a clear failure on the part of the contractor to comply with the contract requirements (Section 5-5, Exhibit 2).

    
    

22. Although specific evidence was not submitted that Respondent is delinquent on this contract, it is noted that the contract (Exhibit 1) is dated August 19, 1987 and calls for completion in 365 days. Accordingly, it clearly appears that Respondent's refusal to repair the damage caused by the errant car resulted in Respondent being delinquent on the contract. If this refusal was not provided for in the contract, Respondent is in default under the contract.

    
    

23. Respondent contends that the significant words in Section 7-14 of the Standard Specifications, which place the duty on the contractor to safeguard the property from damage to the work, are those in the limiting phrase "arising either from the execution or non-execution of the work". Accordingly, since the collision between the errant automobile and the almost completed building did not arise from the execution or non-execution of the work, Respondent is not responsible for correcting this damage.

    
    

24. Interpreting a contract is similar to interpreting a statute, and the same rules of construction are applicable. One cardinal rule is that the entire statute must be considered in determining the intent and that effect must be given to every part of the section and every part of the statute as a whole. From a review of the whole law in para materia, the reviewing court will determine legislative intent. State v. Gayle Distributors Inc., 349 So.2d 150 (Fla. 1977). Another cardinal rule is that no provision of the statute (contract) should be construed to be entirely redundant. Colautti v. Franklin, 439 U.S. 397, 392, 99 S.Ct. 675, 684, 58 L.Ed.2d 596 (1979).

    
    

25. Applying those principles to Section 7-14 it is noted that the second sentence thereof provides generally that the contractor shall repair all damage or injury to any portion of the work before its acceptance except, that in the case of extensive or catastrophic damage, the Department may, at its discretion, reimburse the contractor for such damages due to unforeseen causes beyond the control of the contractor, such as Acts of God, of the public enemy, or of governmental authorities. Damages due to Acts of God are not damages arising either from the execution of the work or non-execution of the work if non- execution of the work means something the contractor did not do that he should have done. Certainly an "Act of God" cannot, by definition, arise out of anything the contractor did or did not do in prosecuting the work under the contract.

    
    

26. Section 5-5 of the General Specifications requires the contractor to perform all work directed to be performed by the engineer on the project, with or without a supplemental agreement. Section 5-10 requires the contractor to maintain all work in first class condition until it has been completed as a whole and has been accepted by the engineer.

    
    

27. Reading all of these provisions of the contract in para materia, it is clear that the correct interpretation of the phrase "arising either from the execution or from the non- execution of the work" means that the contractor has

    an insurer's liability for the safety of the work until the project has been accepted by the engineer. In other words, non-execution of the work means everything not included in execution and not the strict and limited definition proposed by Respondent, which would interpret this phrase to mean the failure of the contractor to execute the work under the contract.

    
    

28. This interpretation of the disputed phrase in Section 7-14 is the interpretation generally accepted by the road and bridge construction industry in carrying out contracts with DOT.

From the foregoing, it is concluded that Respondent refused to perform work under the contract directed by the project engineer and that, as a result, is in default under the contract.

RECOMMENDATION

It is recommended that Gamm Construction Company's qualification to bid on DOT contracts be suspended for one year.

ENTERED this 18th day of December, 1989, in Tallahassee, Florida.

K.N. AYERS Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 198.

COPIES FURNISHED:

Jason O. Barber, Esquire Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399-0458

Charles F. Ketchey, Jr., Esquire

M. Eric Edginton, Esquire Barnett Plaza, Suite 2400

101 E. Kennedy Boulevard Tampa, Florida 32602-5701

Ben G. Watts Secretary

Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0458

Thomas H. Bateman, III General Counsel

Department of Transportation

562 Haydon Burns Building 605 Suwannee Street

Tallahassee, Florida 32399-0458

Docket for Case No: 89-004070

Orders for Case No: 89-004070