Skip to main content

The following is an excerpt from an Interface Consulting work product issued for use in litigation, arbitration, or mediation (dispute resolution). Names, dates, and other information has been modified for client confidentiality purposes.

 

ABC Construction Co. v. National Tollway Authority Litigation

I. Overview of the Project and Dispute

In June 1999, ABC Construction Company (ABC) entered into Contract DNT 323 with the National Tollway Authority (National Tollway or NTA) to construct a portion of the Turnpike within Smithton, Maryland. The Turnpike (Turnpike or TPK) is a six-lane, 26-mile loop and is part of the Smithton North Tollway System. The TPK was designed to provide improved east/west mobility around north Charlesgate and its suburbs. NTA divided the TPK project into five segments. ABC worked on part of the third segment through Smithton from Oak Lane to Maple Road, identified as Section XXI (the Project). ABC’s construction scope of work consisted of grading, drainage, pavement, structures, signing, striping, and traffic signals for the Turnpike. ABC and National Tollway entered into a unit price contract in the amount of…for the construction of the Project. The following graphic illustrates the major areas of ABC’s scope of work.

 

The Project Site and Major Work Areas

 

National Tollway is the owner of the Project. In order to execute the construction of the entire Turnpike, NTA contracted with J & J Contractors, Inc. (J&J) to perform the role of construction manager and also to act….The following organizational chart illustrates the contractual relationships for the Project.

 

Organizational Chart

 

I.A. NTA/ABC Contract

The contract that ABC and National Tollway executed for the Project was a modified State Department of Transportation (SDOT) contract. The National Tollway /ABC contract includes the SDOT general conditions from the Standard Specifications for Construction of Highways, Streets, and Bridges....

I.B. The Importance of Time Relative to the Project

Time of completion of the Project was an essential factor. The contract addresses the importance of time in Special Provision 8.6, Failure to Complete the Work on Time. Special Provision 8.6 states the following:

The contract between ABC and National Tollway specified interim milestone completion dates for various areas of work and provided that the overall Project would be substantially complete no later than July 31, 2001. The graphic below illustrates the timing of the contract milestone completion dates.

 

Contract Milestones

 

I.C. Delays and Disruptions to the Project

National Tollway issued the Notice to Proceed to ABC on July 14, 1999. From the onset of the Project, ABC encountered substantial changes in the conditions under which it entered into the contract. The delays and disruptions caused by National Tollway’s failures were interrelated and cannot be succinctly divided into individual causes....

I.D. Other Significant Delays and Disruptions

National Tollway’s drawings were required to identify and locate both public and private utility lines correctly. These lines include power lines, gas lines, telephone lines, and buried cable and fiber optic lines as well as water and sanitary sewer lines. The result of incorrectly located or unidentified utility lines interfered with ABC’s progress, as it was required to stop production until the lines could be removed out of the way....

I.E. Conclusion

…As a result of ABC’s proactive efforts and acceleration of critical activities, ABC was able to overcome numerous National Tollway delays and disruptions and meet the interim milestone dates as well as the required substantial completion date of July 31, 2001. The graphic below illustrates ABC’s planned and actual construction schedules as well as the delays and disruptions caused by National Tollway.

 
 

ABC’s Construction Schedule with Delays and Disruptions

 

II. Summary of Opinions

It is Interface Consulting's opinion that National Tollway’s failure to perform its contractual obligations caused ABC to incur delays and disruptions on this Project. Further, it is Interface Consulting's opinion that ABC is entitled to compensation in the amount of....

III. Discussion of Opinions

III.A. Delays versus Disruptions

There is a definite distinction between delays and disruptions imposed on ABC as a result of National Tollway’s failure to perform its contractual duties in this contract. Delays and disruptions are not synonymous; they are, in fact, different relative to damages. ABC suffered excusable delays as a result of National Tollway’s failure to provide a suitable excess excavation dump site and delay in providing the 404 permit. As a result of these excusable delays and National Tollway’s failure to provide a time extension, National Tollway constructively accelerated ABC’s work and caused ABC to extend its presence on the Project to complete the balance of the work....

III.B. Schedule Delays

Mainlane mass excavation should have commenced on August 16, 1999; however, ABC was not able to begin this work until September 18, 1999. This late start resulted in a 34-day delay.... ABC’s September 1999 schedule, submitted to National Tollway, showed a 46-day delay to the contract substantial completion date. As of the September 1999 schedule, the 12 additional days of delay were anticipated as a result of limited dump site access, which resulted in lower productivity....

III.C. ABC’s Planned Production

For its bid, ABC developed its baseline production rate for the excavation on this Project based on work it had performed on projects of a similar magnitude of excavated material and with similar dumping conditions….ABC’s planed excavation resources included two (2) night dirt crews with four (4) trackhoes, which would produce a production rate of 12,000 cubic yards (CY) per 10-hour shift. ABC planned to work five (5) 10-hour days per week....

III.D. ABC’s Actual Production

ABC was not able to achieve the production rate that it had planned because National Tollway failed to provide a dump site of adequate size and ease of access as it had represented in its bid documentation and in the contract it executed with ABC. In addition, ABC was not able to achieve the production rate it had planned because many of the sites that ABC was able to acquire would not permit night hauling, which ABC had anticipated being able to do at the “A” site. Night hauling was the most efficient method because there was minimal traffic, resulting in the ability to haul more loads per shift.

 

Planned v. Actual Excavation Production Rates

 

The graphic above shows that the actual production rate of 5,977 CY per shift was approximately half of the planned excavation production rate. As a result, the actual time duration of excavation work was much longer than originally planned....

III.E. Contractual Provisions – 404 Permit Area

A portion of this Project was within a designated EPA wetlands area. Before ABC could perform any work in this area, National Tollway was required to obtain a Clean Water Act Section 404 permit (hereafter 404 permit) from the Corps of Engineers. Despite this contractual restriction, NTA failed to secure the permit in a timely manner in accordance with the contract requirements....

III.F. Location of the 404 Permit Area

The following graphic illustrates the approximate location of the wetlands area identified in the contract. Construction in this area was restricted until National Tollway secured the 404 permit. The restricted area included the following:

  • Grading for the eastbound mainlanes and shoulders

  • Construction of the culvert at eastbound Mills Road Station 203+07.37

  • Construction of stream 6D3 channel improvements

  • Reconstruction of eastbound Mills Road from Willow Boulevard eastward

  • Construction of Mills Road Bridge (exclusive of Abutment #6)

 

 

Additionally....

III.G. NTA’s Failure to Secure 404 Permit

The graphic below illustrates the extensive delays and disruptions to ABC’s work due to National Tollway’s failure to obtain a 404 permit in a timely manner.

 

Additional Delays and Disruptions due to the Delayed 404

 

 

III.H. Idle Bridge Equipment Caused by the Delay in Obtaining the 404 Permit

Also in early-October 1999, ABC mobilized an 80-ton Linkbelt crane to support the construction of the Mills Connector Bridge, which was to be the first bridge constructed in ABC’s schedule; however, because National Tollway did not obtain the 404 permit and further exacerbated the delay situation by refusing to provide a revised permit issuance date, ABC maintained this crane on-site for when it was needed based on anticipating the need to use the crane on a day-to-day basis. Consequently, the 80-ton Linkbelt crane sat idle while National Tollway’s failure to obtain the 404 permit in a timely manner delayed the work in the permit area. ABC is entitled to seek compensation for this idle equipment time....

III.I. Delays to Bridge Construction

National Tollway’s failures to provide the 404 permit in a timely manner negatively affected ABC’s ability to construct the four (4) bridges on the Project and required ABC to resequence its work and reallocate resources to mitigate the disruption. The following schedule shows the planned and actual bridge construction schedules and disruptions....

III.J. Willow Bridge Impact

Willow Bridge was scheduled to be constructed as part of ABC’s contract with National Tollway. Willow Bridge, however, was not on ABC’s critical path and could have been built concurrently with other work, including the frontage roads’ reconstruction. Because ABC could not begin construction on the Mills Connector Bridge due to the 404 permit delay, and the Mills Connector Bridge was scheduled to be used to detour traffic, ABC had to resequence its work to Willow Bridge, which became the bridge ABC utilized for the detour of traffic, thus requiring Willow Bridge to be placed on the critical path.

 

Willow Bridge Waterline Delays and Disruptions

 

III.K. Oak Bridge Impact

ABC began construction on the Oak Bridge in late-October 1999 when the 404 permit delays and the 24" waterline delays were impeding ABC’s work on the Mills Connector Bridge and Willow Bridge respectively. ABC completed segment one of Oak Bridge on December 23, 1999, and shortly thereafter began to work on Willow Bridge and Oak Bridge simultaneously. In late-May 2000, Oak Bridge suffered delays associated with the completion of the 27" waterline, impacting ABC’s efforts to switch traffic onto Phase I of Oak Bridge. This caused ABC to demobilize and remobilize its crews again....

III.L. Pine Mill Bridge Impact

ABC’s original schedule called for work on Pine Mill Bridge to commence immediately following the completion of the Mills Connector Bridge. The 404 permit delays required ABC to resequence its planned bridge construction. Pine Mill Bridge was delayed from early-March 2000 to late-January 2001, mostly due to the delays to the construction on the other bridges. However, in August and September 2000, as ABC completed construction on Phase II of Oak Bridge, ABC was delayed from commencing work on Pine Mill Bridge due to existing utility conflicts. ABC and GTE spent additional time reviewing potential solutions for moving GTE’s 1500 pair cable from the Pine Mill Bridge to temporary supports. ABC was delayed and incurred additional costs reviewing various options, waiting on GTE to move the cable to the temporary poles, and working around the temporary structures during construction of the bridge....

III.M. Delays and Disruptions Affecting Other Costs

National Tollway’s actions and inactions caused ABC to incur costs over and above what it anticipated when it entered into this contract. Included in these unexpected and unreimbursed costs are additional costs for providing outfall storm sewer pumping, purchasing ready-mix concrete, building certain soundwalls, and expending additional costs due to the waterline issue at Willow Bridge. ABC addressed several of these delays and disruptions in a letter to J&J dated July 6, 2001....

III.N. Lost Profit

But for National Tollway’s imposed delays and disruptions, ABC would have earned its expected job profit. ABC expected a reasonable and established profit of $4,598,432, which is 9% of its original planned direct costs of $51,311,396. ABC suffered numerous delays and disruptions, most of which were caused directly by National Tollway. An evaluation of ABC’s own impacts has determined that ABC incurred inefficiencies on various aspects of its installation of small storm sewer pipe, inlets and manholes, concrete paving, asphalt paving, construction detours, wastewater piping, and overhead signage foundations. These issues did not extend the time ABC was required to remain on the Project after the tollway was opened to traffic. ABC did, in fact, complete each scheduled milestone as specified. ABC’s own inefficiencies were not significant enough to delay the Project. As such, National Tollway was able to collect revenue as of July 31, 2001. An analysis of the results of ABC’s own inefficiencies has determined that approximately only 16.34% of its base bid work was affected by ABC’s own inefficiencies. Therefore, ABC’s profit should be reduced by 16.34%, which equates to….But for the National Tollway delays and disruptions, ABC would have earned the balance of the remaining profit in the amount of....

 

IV. Quantification of ABC Damages

In the preparation of Interface Consulting’s Statement of Opinion concerning the matter involving ABC’s claim against National Tollway, we relied upon the facts of the matter and our experience, training, and education in construction projects, as well as methodologies involving construction claims, published and unpublished, used by other experts in the field. The cost and time impact to the Project resulting from National Tollway’s actions and/or inactions is presented herein. Interface Consulting’s opinions concerning ABC’s damages were preceded by a thorough evaluation of the project documents. We reviewed various project documents including among others, the project contract, drawings and specifications, correspondence, meeting notes, cost records, progress payments, project schedules, and post-project reports. The specific methodologies upon which Interface Consulting based its opinions are described below.

IV.A. Quantification

In quantifying ABC’s monetary damages, we evaluated the issues and concluded that, in National Tollway’s contract, time was of the essence, as National Tollway intended to place traffic and receive revenue from collecting tolls on the new tollway by the contract completion date of July 31, 2000. As such, National Tollway refused to grant ABC additional time to perform its work despite delays and disruptions directly resulting from National Tollway’s failures in performance of its contract. Mr. Bouma, in his deposition, addressed National Tollway’s preference to pay increased costs rather than grant a time extension to ABC.

IV.B. Summary of ABC’s Damages

The following…

 

 
 

V. Conclusion

In conclusion, it is Interface Consulting’s opinion that National Tollway’s failure to perform its contractual obligations caused ABC to incur delays and disruptions on this Project. Further, it is Interface Consulting’s opinion that ABC is entitled to compensation.