Buckley & Co., Inc. v. State
| Citation | 140 N.J.Super. 289,356 A.2d 56 |
| Parties | BUCKLEY & COMPANY, INC., a corporation of the State of New Jersey, and Schiavone Construction Co., Inc., a corporation of the State of New Jersey, Plaintiffs, v. The STATE of New Jersey, Commissioner, Department of Transportation, Defendants. |
| Decision Date | 30 July 1975 |
| Court | Superior Court of New Jersey |
Plaintiff Buckley & Co., Inc. and Schiavone Construction Co., Inc. (Buckley/Schiavone), a joint venture, bring this action pursuant to the New Jersey Contractual Liability Act, N.J.S.A. 59:13--1, Et seq., against the State of New Jersey, through the Commissioner of the Department of Transportation (Department) to recover, for itself and certain of its subcontractors, sums claimed to be due arising out of the performance of a construction contract entered into by the parties on March 28, 1967 for a project known as Route 78, Section 5U.
The project involved construction of a section of Interstate Route 78 in the City of Newark. Described by the Department Buckley/Schiavone first seeks compensation for ten different kinds of 'overhead' expenses, that is, costs of equipment and personnel incurred as a result of the extended life of the project. 'Overhead' equipment and personnel--including such equipment as field office and superintendent's vehicles and such personnel as job superintendents and other supervisory salaried employees assigned to the job--were not separate bid items but were allocated among the various bid items at costs based upon the anticipated life of the project. Each day that the project life was extended meant, according to Buckley/Schiavone, the continuation of those costs without compensation under the contract; such costs are distinguished by Buckley/Schiavone from production costs which are incurred only as and to the extent work proceeds.
as being 'one of the largest and one of the most complex projects ever entered into' by it, the project centered on the confluence of U.S. Routes 1 and 9, the New Jersey Turnpike, Newark Airport and the access roads to Port Newark. The contract included road and bridge construction together with a variety of related utility, drainage, electrical and similar work. The complexity of the project lay not in the engineering or construction work itself, but rather in the planning for, and the assuring of, the continued flow of traffic in, around and through the site during construction. The contract, awarded to Buckley/Schiavone for $10,836,141.90, contemplated that the work would consume 30 months, and fixed a completion date of November 1, 1969. Various change orders entered into between the parties during and after construction extended the completion date a total of 477 days to February 21, 1971; the work was not completed until May 19, 1971, or 564 days after the scheduled completion date. The claims made here by Buckley/Schiavone on its own behalf all arise out of that delay.
Buckley/Schiavone further seeks recovery of additional wages paid to employees because of wage escalations which became effective after the November 1, 1969 scheduled completion In defense of these claims the Department contends that certain of the delays were caused by Buckley/Schiavone itself; that the various construction problems claimed by Buckley/Schiavone did not in fact cause the delays claimed, and that all of the claims for additional costs are barred by a variety of contract provisions commonly known as 'no damage for delay' clauses.
date. Finally, it seeks recovery of $26,100 retained by the Department pursuant to the contract as 'liquidated damages' at $300 a day for the failure of Buckley/Schiavone to complete the project until 87 days after the completion date as extended by the change orders referred to above.
The claims made by Buckley/Schiavone on behalf of its subcontractors are of a variety of kinds, including claims for losses sustained by the subcontractors from the delays. Discussion of those claims is deferred to Part IV of this opinion.
In order to provide for continued traffic movement to and through the various roads and facilities affected by the construction, the plans as prepared by the Department fixed a highly intricate staging procedure. The construction was fractioned into a total of 22 stages, designated Stages 1--A to 1--H, 2--A to 2--F, 3--A and 3--B, and 4--A to 4--D. For each stage the plans indicated (1) the construction work which was to proceed, (2) the portions of existing or newly constructed roadways which were to be open to traffic, and (3) the routing of traffic to and from the various roads and facilities. Construction could not proceed from one stage to another unless roadway areas needed for the planned traffic flow were available. However, the plans did not require that all work follow a rigid sequence but rather showed that certain work could be done in more than one of the stages and that certain stages could be worked, at least in part, concurrently.
Some of the work, then, was critical to the progress of the job in that delay in its completion would delay commencement of the next phase and of the project as a whole, but not all of the work had that same potential effect. The factual disputes between the parties are largely as to what problems arose during the progress of the several stages and what delays, if any, can be attributed to each such problem.
To support its explanation of the causes of the 564--day delay, Buckley/Schiavone introduced its concept of the 'critical path.' That term is one of accepted though recent use in the construction industry. Used in the planning and bidding of projects, it designates those construction items which must be completed sequentially, indicates the maximum period of time required for each, and thus discloses the total amount of time required to complete the entire project. Although the present contract was neither prepared nor bid in terms of critical path analysis, Buckley/Schiavone at trial employed such an analysis to argue in retrospect where and why delays occurred.
The Department does not question that critical path analysis can be used to such an end, and in fact presented its own concept of the critical path. However, the parties dispute both what occurred during the course of construction and what elements of the construction were on the critical path. These disputes lead to the divergent explanations given by the parties for the delay in project completion. Their conflicting reconstructions are best evaluated by examination of the various causes of delay urged by the parties.
(The court here reviewed the evidence and reached the following conclusions as to project delays:
A. Delays in Granting Access
Relocation of a United States Weather Bureau ceilometer delayed demolition of a fire house from
May 16 to May 31, 1967, and thereby delayed the project completion by 15 days.
A portion of the right-of-way known as the Stulman property, as to which the contract described an anticipated vacation date of July 1, 1967, was not available until August 1, 1967, causing a 31-day delay in project completion.
A second tract, known as the Mannkraft property but not referred to in the contract, was not available until August 2, 1967. The delay from the May 16, 1967 construction commencement date to August 2, 1967 caused a delay in the project of 79 days; this delay overlapped in part those just described.
B. Delays Resulting from Utility Work
Revision of staging plans for construction of the Port Street water line to accommodate Port Authority traffic requirements and City of Newark water supply requirements caused delay between June 15 and October 22, 1967, resulting in 129 days of project delay; this delay also overlapped in part the delays resulting from lack of access to the fire house, the Stulman property and the Mannkraft property, described above.
Revision of plans for the Frontage Road water main caused delay from June 14, 1967 to January 16, 1968, and the decision of the City of Newark to extend the water main at its own expense caused a further delay from March 25 to April 22, 1968. Project completion was delayed for these reasons for 89 days and 28 days, respectively.
C. Delays Resulting from Plan Errors
Errors, omissions and inadequacies in the plans prepared on behalf of the Department caused a variety D. Miscellaneous Claims of Further Delays
of delays throughout the course of the project, resulting in project delays of 190 days.
The 87 days of delay for which no extension of time was granted by the Department resulted from action and inaction by both parties as well as from conditions over which neither had control, but the record provides no basis to ascribe particular portions of that delay to particular causes.)
The parties agree that additional costs resulted to Buckley/Schiavone by reason of the delays in project completion, and they have reduced those costs to stipulated Per diem amounts for each of the various kinds of costs. They are in dispute, however, as to whether any or all of those additional costs are recoverable by Buckley/Schiavone.
In defense the Department relies principally on a variety of 'no damage for delay' clauses in the contract. The general no-damage clause is Article 1.7.4 of the Standard Specifications made part of the contract:
If for any reason beyond the control of the Contractor other than as provided for in Art. 1.7.3 (...
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