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Contractor Recovers from PennDOT for Failing to Coordinate Utility Relocation on Highway Project
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March 1, 2010
By Lauren M. Charneski
Intercounty Paving Associates contracted with the Pennsylvania Department of Transportation (PennDOT) to widen and re-pave 3⅝ miles of two-lane state highway for just over $4.5 million. Extensive relocation of utility poles serving electric, telephone and cable television utilities was required to complete the project. The project was completed 223 days late as a result of utility location problems.
The contractor sued PennDOT before the Pennsylvania Board of Claims, arguing that PennDOT had failed to properly design and coordinate relocation of utility poles. The board awarded damages to the contractor for delay, disruption and extra work. Intercounty Paving Associates, LLC v. Commonwealth of Pennsylvania, Department of Transportation, Docket No. 3720 (April 23, 2009). PennDOT did not appeal.
The board found that PennDOT’s project specifications included an “unusually detailed construction activities plan” that the contractor was required to follow when pricing its bid and performing the work. The board found that the specifications’ particularity regarding sequencing and timeframes, coupled with the need to keep the highway open to traffic during construction, meant “it was critical that the telephone and electric utility poles lining both sides of the roadway be relocated within the PennDOT rights-of-way either before Intercounty commenced the Construction Sequence, or, at very least, that these utility poles be relocated in a time and manner so as not to interfere with Intercounty’s work as mandated by PennDOT’s Construction Sequence.”
The board held that PennDOT failed to adequately perform its utility coordination responsibilities while the contractor satisfied the obligations that it had. The board held that PennDOT failed to send the utilities the construction sequence the contractor was required to follow. That contractual sequence greatly departed from preliminary plans that PennDOT previously had provided to the utilities. The utilities did not know of the construction sequence until a pre-job meeting. Because the utilities were unable to immediately start work using PennDOT’s contractual sequence, the contractor’s entire work sequence had to be “flipped” at the meeting. Despite flipping the sequence, pole relocation started seven weeks late.
After several months of work, the utilities stopped because of the onset of winter and did not return for five months. The board found that PennDOT, rather than letting the contractor suspend work as it requested, decided to create week-to-week “ad hoc” work schedules and to “jockey” the contractor around the jobsite throughout the winter. PennDOT did this even though it had required the contractor to use the construction sequence set out in the specifications when bidding and the contractor had reasonably relied in doing so. The board found that the ad hoc work scheduling caused the contractor to work in a “piecemeal,” “start and stop” and “less effective fashion.”
The board found that after construction began, PennDOT delayed for six months before taking any steps or applying any leverage to expedite pole relocation by the utilities, which were allowed free access to the PennDOT right of way. The board found that PennDOT made affirmative misrepresentations about this to the contractor. At the pre-job meeting, the board found, PennDOT had said it would take the lead in coordinating the utilities’ relocation of the poles.
The board found that PennDOT’s design did not take into account the fact that some poles required guy wires and there was not enough room in the PennDOT right-of-way to relocate the poles. When the utilities discovered this error at the start of the project, PennDOT refused to pay to acquire the necessary additional right-of-way for guy wires for relocated poles from an adjoining private landowner. Almost seven months passed before PennDOT revised its design so the poles could be relocated on PennDOT right-of-way.
PennDOT argued that the utilities never said any poles needed guy wires and that it was unaware of such a need until the project began. The board found this argument was “without merit.” It noted that PennDOT, as the project owner, was responsible for properly locating the poles in the design it provided. The board considered the guy wire problem to be “one of PennDOT’s own making.” The board also found that PennDOT’s final design did not show where poles were to be relocated or which poles needed to be moved.
PennDOT argued that exculpatory provisions in the contract, including a no-damage-for-delay clause, shielded it from damages even if it delayed and disrupted the contractor. The board found that PennDOT actively interfered with the contractor’s work, and as a result, these defenses were not available to PennDOT. It held that statements by PennDOT employees that they would work with the utilities on pole coordination and their failure to do so timely constituted active interference. PennDOT violated its fundamental responsibility “to do that which is reasonably within [its] ability to provide a contractor with reasonably unobstructed access to the worksite.” The board also held that PennDOT’s faulty design constituted active interference.
The board held PennDOT liable for all 223 days of delay and all of the contractor’s lost productivity claim. It awarded $171,640.81 for delay costs and $405,671 for disruption costs. The board accepted the contractor’s methodology for proving its disruption damages: comparing planned workdays to actual workdays and adding crew costs for the extra days. The board also awarded $13,571 – part of the contractor’s claim for extra work – and pre-judgment interest for a total award of $760,289.23.
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