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Art Berger Special Counsel, Construction FDOT, Tallahassee.

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Presentation on theme: "Art Berger Special Counsel, Construction FDOT, Tallahassee."— Presentation transcript:

1 Art Berger Special Counsel, Construction FDOT, Tallahassee

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3 A contract is a promise or a set of promises for the breach of which the law gives a remedy. The “promise” is referred to as “consideration.” Example: “In consideration for the sum of $3,000,000 contractor agrees to construct the project.” Formation of a contract:

4 Gift: A voluntary transfer of property to another made gratuitously and without consideration. Consideration: The cause, motive, price, or impelling influence which induces a contracting party to enter into a contract. 4

5  Department contracts must be written contracts.  The Department cannot be sued on an oral contract. 5

6 Standard Specifications: 1-3 Definitions: Contract: The term “Contract” means the entire and integrated agreement between the parties thereunder and supersedes all prior negotiations, representations, or agreements, either written or oral. 6

7 Florida Statutes (1): Suits by and against department: Suits at law and in equity may be brought and maintained by and against the department on any contract claim arising from breach of an express provision or an implied covenant of a written agreement or a written directive issued by the department pursuant to the written agreement. In any such suite, the department and the contactor shall have all of the same rights and obligations as a private person under a like contract except that no liability may be based on an oral modification of either the written contract or written directive. 7

8 A contract can be amended. For Department contracts, the amendment must be in writing approved by the parties. Standard Specifications: 1-3 Definitions: Supplemental Agreement: A written agreement between the Contractor and the Department, and signed by the surety, modifying the Contract within the limitations set forth in these Specifications. 8

9 4-3.2 Increase, Decrease or Alteration in the Work: The Engineer reserves the right to make alterations in the character of the work which involve a substantial change in the nature of the design or in the type of construction or which materially increases or decreases the cost or time of performance. Such alteration shall not constitute a breach of Contract, shall not invalidate the Contract or release the Surety. 9

10 10 Latent physical conditions Excusable Delays

11 Condition Precedent: A condition precedent must be fulfilled before the effect can follow. A prerequisite. Example: : As a condition precedent to an extension of Contract Time the Contractor must submit to the Engineer: A preliminary request for an extension of Contract Time must be made in writing to the Engineer within ten calendar days after the commencement of a delay to a controlling item of work. 11

12  Contracts contain express terms and implied terms.  Implied terms are frequently referred to as implied covenants.  Examples of implied covenants:  The implied covenant of good faith and fair dealing applies to every contract. 12

13 In construction contract law an owner (FDOT) has:  1. an implied obligation not to do anything to hinder or obstruct performance by the other person;  2. an implied obligation not to knowingly delay unreasonably the performance of duties assumed under the contract;  3. an implied obligation to furnish information which would not mislead prospective bidders. 13

14 Types of Contracts by payment:  Lump sum payments: A single payment of the entire amount due at one time rather than in installments. The payment is for everything needed to perform the desired work.  Unit price payments: Contract items are priced per unit and not on the basis of a flat contract price. 14

15 Recoverable Damages: Recoverable Damages:  Delay Damages ( & (b))  Extra Work ( ) Non-Recoverable Items of Damage ( )  Loss of Profit (lost profits)  Consequential Damages  Loss of Bonding Capacity  Loss of Bidding Opportunity  Attorney Fees  Acceleration, unless by written directive 15

16 Doctrine of Mitigation of Damages:  The doctrine of mitigation of damages imposes on a party injured by breach of contract a duty to exercise reasonable diligence and ordinary care in attempting to minimize his damages, or avoid aggravating the injury. 16

17 Mitigation: : For any delay claim, the Contractor shall be entitled to monetary compensation for the actual idle labor and equipment, and indirect costs, expenses, and profit thereon, as provided for in (d) and solely for costs incurred beyond what reasonable mitigation thereof the Contractor could have undertaken. 17

18 Also, : “ except that in the instance of delay to a non- controlling item of work the Contractor may be compensated for the direct costs of idle labor or equipment only, at the rates set forth in (a) and (c), and then only to the extent the Contractor could not reasonably mitigate such idleness.” 18

19 Spearin Doctrine: If a construction contractor is bound by contract to build according to plans and specifications provided by the owner, he will not be responsible for the consequences of defects in the plans and specifications. On the contrary, there is an “implied warranty” that “if the specifications were complied with,” the work would be adequate. The implied warranty is not overcome by the customary self- protective clauses the government inserts in its contracts, as in Spearin itself, requiring the contractor to examine the site, to check the plans, and to assume responsibility for the work, including its safekeeping, until completion and acceptance. Al Johnson Const. Co. v. United States, 854 F.2d 467, 468 (Fed. Cir. 1988). 19

20 Severin Doctrine: Under the Severin doctrine, a suit of this nature may be maintained only when the prime contractor has reimbursed its subcontractor for the latter's damages or remains liable for such reimbursement in the future. These are the only ways in which the damages of the subcontractor can become, in turn, the damages of the prime contractor, for which recovery may be had against the Government. Thus, when the subcontract contains a clause completely exonerating a prime contractor from liability to its subcontractor for the damage complained of, suit cannot be maintained by the prime contractor against the Government. The same result will follow when the subcontract provides for a complete release of the prime contractor's liability to the subcontractor upon the granting of additional time for the latter's performance, or the acceptance of final payment by the latter. George Hyman Const. Co. v. United States, 30 Fed. Cl. 170, 174 (Fed. Cl. 1993) aff'd, 39 F.3d 1197 (Fed. Cir. 1994) 20

21 Sovereign Immunity: A judicial doctrine which precludes bringing suit against the government without its consent. Florida Constitution, Article X, § 13: Provision may be made by general law for bringing suit against the state as to all liabilities now existing or hereafter originating. 21

22 Waiver: An intentional or voluntary relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right. 22

23 : Failure by the Contractor to comply with the ten calendar day notice shall constitute a waiver of the claim. Use of Waiver: 23

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32 Subarticle 5-2: A requirement occurring in one part of the contract is as binding as though occurring in all. In addition to the work and materials specified in the Specifications as being included in any specific pay item is incidental work necessary for the proper completion of the work. In cases of discrepancy, the governing order of the documents is as follows: 1. Special Provisions. (utility schedules) 2. Technical Special Provisions. 3. Plans. 4. Design Standards. 5. Developmental Specifications. 6. Supplemental Specifications. 7. Standard Specifications. Computed dimensions govern over scaled dimensions. Subarticle 5-2: A requirement occurring in one part of the contract is as binding as though occurring in all. In addition to the work and materials specified in the Specifications as being included in any specific pay item is incidental work necessary for the proper completion of the work. In cases of discrepancy, the governing order of the documents is as follows: 1. Special Provisions. (utility schedules) 2. Technical Special Provisions. 3. Plans. 4. Design Standards. 5. Developmental Specifications. 6. Supplemental Specifications. 7. Standard Specifications. Computed dimensions govern over scaled dimensions. 32

33 ● Principal purpose of the parties. ● Writing is interpreted as a whole. ● Plain meaning of the words used. ● Check defined terms. ● Technical terms given technical meaning. ● Course of performance important. ● A reasonable interpretation is preferred. ● Governing order of the documents - Section

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35 35 “Florida Statutes”

36 Florida Statutes

37 37 “Public Transportation”

38 38 “Bridge”“Bridge”

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42 Sub-article continued: Submit and updated Work Progress Schedule, for Engineer’s acceptance, if there is a significant change in the planned order or duration of an activity If the Contractor fails to finalize either the initial or a revised schedule in the time specified, the Engineer will withhold all Contract payments until the Engineer accepts the schedule. 42 Not approval

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46 Section 1-3: Definition of Delay: Delay: Any unanticipated event, action, force or factor which extends the Contractor’s time of performance of any controlling work item under the Contract. The term “delay” is intended to cover all such events, actions, forces or factors, whether styled “delay,” “disruption,” “interference,” “impedance,” “hindrance,” or otherwise, which are beyond the control of and not caused by the Contractor, or the Contractor’s subcontractors, materialmen, suppliers or other agents. This term does not include “extra work.” 46

47 Controlling Work Items: Section 1-3: Controlling Work Items: The activity or work item on the critical path having the least amount of total float. The controlling item of work will also be referred to as a Critical Activity. 47

48 Contract Time Extensions: The Department may grant an extension of Contract Time when a controlling item of work is delayed by factors not reasonably anticipated or foreseeable at the time of bid. The Department may allow such extension of time only for delays occurring during the Contract Time period or authorized extensions of the Contract Time period. When failure by the Department to fulfill an obligation under the Contract results in delays to the controlling items of work, the Department will consider such delays as a basis for granting a time extension to the Contract. 48

49 Delays: All delays are either excusable or nonexcusable.  An excusable delay, in general, is a delay that is due to an unforeseeable event beyond the Contractor’s control.  Error or omission in the plans.  Owner directed changes.  Nonexcusable delays are events that are within the Contractor’s control or that are foreseeable.  Delays caused by subcontractors.  Faulty workmanship by the Contractor. 49

50 Excusable delays are either compensable or noncompensable.  A compensable delay is a delay where the Contractor is entitled to additional time or compensation.  Only excusable delays are compensable.  A noncompensable excusable delay is frequently beyond the control of both the contractor and the owner, or the terms of the contract may exclude compensation despite being an excusable delay. 50

51 Concurrent Delays Concurrent Delays  Concurrent delays are separate delays to the critical path that occur at the same time.  Section (d)(2): Further, in the event there are concurrent delays to one or more controlling work items, one or more being caused by the Department and one or more being caused by the Contractor, the Contractor shall be entitled to a time extension for each day that a controlling work item is delayed by the Department but shall have no right to nor receive any monetary compensation for any indirect costs for any days of concurrent delay. 51

52 Float: (Special Provision “SP A”) Float: Is also known as slack time or slide time; it is defined as the amount of time the finish of any activity can be delayed. Two kinds of float are possible; Total float is how much an activity can be delayed without affecting the finish date of the project or an intermediate deadline; it is the difference between the late finish date and the early finish date. Free float is how much an activity can be delayed without affecting its earliest successor. Float is not for the exclusive use or benefit of either the Department or the Contractor. 52

53 WHAT IS A SCHEDULE GOOD FOR? A Study of Issues Posed by Schedules on Complex Projects Anthony L. Meagher Robert M. D’Onofrio, P.E. DLA Piper (US) URS Corporation Baltimore, MD New York, NY American Bar Association Forum on the Construction Industry 2012 Mid Winter Meeting 53

54 SCHEDULE DELAY ANALYSIS METHODS Standard Names Specific Method Time Impact Analysis Properly adjusted TIA Unadjusted TIA (Windows) Prospective TIA Window wide periods Collapsed as-built Multiple period using updates Collapse stepped removal Remove owner Remove contractor As-built critical path Critical path using updates As-built path Impacted As-planned Stepped insertion Global Compare owner/contractor Total time As-planned v as-built

55 METHODS APPLIED TO SAME FACT PATTERN (Prepared by Anthony L. Meagher and Robert M. D’Onofrio, P.E.) Analysis Methodology Excusable Compen- sable Excusable Non- compen- sable Non- excusable (LD’s) Total Delay Time Impact Analysis (properly adjusted) 1416 Impacted As-Planned 6017 Collapsed As-Built 2046 Impacted As-Planned (comp) 0516 Total Time/As-Built Critical 6006 Prospective TIA 3216 Windows/TIA 1236 Windows with Wide Periods 0516

56 Properly adjusted TIA Unadjusted TIA (Windows) Prospective TIA Window wide periods Multiple period using updates Collapse stepped removal Remove owner Remove contractor Critical path using updates As-built path Stepped insertion Global Compare owner/contracto r As-planned v as-built Guideline Time Impact Analysis Collapsed as-built As-built critical path Impacted As- planned Total time 1 Yes NoYesNo 2 YesMaybeYesNo 3 Yes No YesNo 4 YesNoYesNo 5 Yes MaybeYes No Yes 6 NoYes No Yes 7 No 8 YesMaybe No (Prepared by Anthony L. Meagher and Robert M. D’Onofrio, P.E.)

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59 Supplemental Agreements 59

60 Florida Statute § : ( 9)(a) The department shall permit the use of written supplemental agreements, written work orders pursuant to a contingency pay item or contingency supplemental agreement, and written change orders to any contract entered into by the department. Any supplemental agreement shall be reduced to written contract form and executed by the contractor and the department. Any supplemental agreement modifying any item in the original contract must be approved by the head of the department, or his or her designee, and executed by the appropriate person designated by him or her. 60

61 61 “full and complete settlement”

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65 (1) (continued from page 1) Full and Final SA Contract Amendment: A. The Department and the Contractor agree that the contract time adjustment and compensation specified in the Supplemental Agreement constitute a full and final settlement of all disputes, claims, matters and issues of any nature or kind, known or unknown, which the Contractor has, or may have, arising out of or regarding the Contract, including but not limited to, notices of intent to claim, requests for equitable adjustment, requests for compensation and extensions of time, certified claims, causes of action, demands, controversies as to work contracted and performed, work added, deleted and modified, unforeseen work, extra work, differing site conditions, delays and disruptions, utility conflicts, design changes or defects, suspensions, lost productivity, extended or unabsorbed home office and job site overhead, Maintenance of Traffic adjustments, bonuses, incentives, disincentives, lost profits, mark-ups, cumulative impacts to the project(s), all direct and indirect costs for equipment, manpower, materials, overhead, profit and delay, and any other adverse financial or schedule impacts to the subject project(s). B. This Supplemental Agreement supersedes all prior negotiations, communications, representations, commitments, agreements or understandings, written or oral, not specifically incorporated in this Supplemental Agreement, and that no deviation from the terms of this Supplemental Agreement shall be predicated upon such prior negotiations, communications, representations, commitments, agreements or understandings. C. The Department agrees to pay the Contractor the total sum of $ ______________. D. Nothing in this Supplemental Agreement shall relieve the Contractor of its obligations to the Department under Section 5-13, Standard Specifications. 65

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68 Miscellaneous Legal Topics 68

69 69 Florida Transportation Code: F.S

70 Entry onto Lands 70

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76 Access to Interstate System 76

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79 Public Records Law 79

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81 Florida Statutes §119.01: ● It is the policy of this state that all state, county, and municipal records are open for personal inspection and copying by any person. Providing access to public records is a duty of each agency. 81

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83 83 “Attorney Work Product”

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85 ● F.S. § (2): “Bridge” means a structure, including supports, erected over a depression or an obstruction, such as water or a highway or railway, and having a track or passageway for carrying traffic as defined in chapter 316 or other moving loads. 85

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89 Document Retention Policy FDOT’s Retention and Disposal Schedule: Where is it? ● DOT Infonet ● Registered SharePoint Sites (under “About DOT”) ● FA - Administration ● Support Services ● Records Management (under “Main Menu”). ● (a 135 page document) 89

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