Dick Corp. v. Associated Elec. Co-op., Inc., Civ. A. No. 79-3128-CV-S.
| Decision Date | 06 June 1979 |
| Docket Number | Civ. A. No. 79-3128-CV-S. |
| Citation | 475 F. Supp. 15 |
| Parties | DICK CORPORATION and American Casualty Company of Reading, Pennsylvania, Plaintiffs, v. ASSOCIATED ELECTRIC COOPERATIVE, INC., Defendant. |
| Court | U.S. District Court — Western District of Missouri |
Emanuel F. Abbate, Jarvis, Pilz, Buckley & Treacy, New York City, F. Philip Kirwan, Margolin & Kirwan, Kansas City, Mo., for plaintiffs.
Eugene E. Andereck, Stockard, Andereck, Hauck, Sharp & Evans, Jefferson City, Mo., for defendant.
Findings of Fact and Conclusions of Law
This cause came on for trial and the court, having heard the evidence and considered the stipulation of the parties, finds the facts and states the conclusions of law as follows:
FINDINGS OF FACT
1. Dick Corporation (hereinafter "Dick") is a Pennsylvania corporation having its principal office in Large, Pennsylvania, qualified to do and doing business in the State of Pennsylvania and qualified to do and doing business in the State of Missouri with its principal office in the State of Missouri being located at Sikeston, Missouri.
2. American Casualty Company of Reading, Pennsylvania (hereinafter "American") is a corporation organized and existing under and by virtue of the laws of a State other than Missouri with its principal office being located in Pittsburgh, Pennsylvania, qualified to do and doing business in the State of Missouri.
3. Associated Electric Cooperative, Inc. (hereinafter "AECI") is a corporation organized and existing under and by virtue of the laws of the State of Missouri with its domicile in Springfield, Missouri.
4. The controversy between the plaintiffs and defendant arises out of the discovery that a bid submitted by Dick contained an erroneous lump sum price proposal for the construction of certain improvements to a project described in certain plans, specifications, and drawings relating to Contract No. 353—Power Plant Structures, located in Moberly, Missouri. The bid submitted was in the sum of $13,600,000, instead of the sum of $14,600,000. The error involved the sum of $1,000,000. As required, a bid bond in the penal sum of ten percent (10%) of the bid price was provided.
5. The notice and instructions to bidders provides in part as follows:
6. AECI is and was the owner of the Thomas Hill Power Plant, Unit No. 3, proposed to have the power plant structures constructed or built thereon for AECI's use and enjoyment. AECI is an electrical cooperative engaged in the generation and transmission of electrical power in the State of Missouri and as such is and has been the owner of electrical generating plants and distribution systems serving numerous areas of Missouri with electricity.
7. Dick has been and is engaged in the construction business, particularly the industrial business and as such has been engaged for many years in numerous states in the United States. Dick submitted a bid which concerned the construction of the Thomas Hill Power Plant extension of the proposed project which is an extension to the existing plan.
8. American is and has been engaged in the surety business and was the surety for Dick in connection with the bid involved in this matter.
9. Some time prior to May 21, 1979, AECI engaged the services of Burns & McDonnell Engineering Company of Kansas City, Missouri (hereinafter "Burns & McDonnell") in connection with AECI's plan for the construction of an extension to the existing Thomas Hill Power Plant.
10. The proposed construction was and has been financed pursuant to a loan contract between AECI and the United States of America acting through the Administrator of the Rural Electrification Administration (hereafter "Administrator").
11. The plans and specifications for the project were prepared by Burns & McDonnell.
12. Some time prior to May 21, 1979, AECI caused written notice and instructions to bidders to be promulgated in connection with the construction of the extension of the existing Thomas Hill Power Plant which part was referred to as Contract 353—Power Plant Structures (hereinafter the "Contract") for which bids were to be received by AECI on or before 3:00 o'clock p. m. on May 21, 1979 at Burns & McDonnell's office at 4600 East 63rd Street, Kansas City, Missouri, 64141.
13. In accordance with the notice and instructions to bidders, Dick acquired a copy of the plans and specifications forms and other documents for bidders from Burns & McDonnell upon the payment of $200.00 all as provided in said notice and instructions to bidders in connection with the Contract (Plaintiffs' Exhibit 1).
14. There were two (2) Addenda issued by Burns & McDonnell which were designated as Addendum No. 1 dated April 27, 1979 and Addendum No. 2 dated May 11, 1979 which were received by Dick prior to May 21, 1979 (Plaintiffs' Exhibit 1).
15. There is no issue between the parties as to Dick's experience and qualifications. Dick was and is a qualified bidder and contractor for such construction projects as proposed by AECI, Dick having had experience in similar construction projects and having an experienced and qualified estimating department assigned to this project and at the time the bid was submitted Dick was approved by the Rural Electrification Administration for such construction projects. Dick followed procedures which have been used by Dick and which are the same as those accepted as customary in the construction industry.
16. It was necessary for the Estimating Party Chief of Dick to take prices from numerous subcontractors for the various parts of the work called for by the plans and specifications as well as to prepare an estimate for the cost of that portion of the work which was to be performed by Dick. Such preparation occurred immediately prior to the bid submission time as is customary in the construction industry. Putting the bid together was completed on the morning of May 21, 1979, with the final compilation of the bid completed within a half-hour before the lump sum price was submitted to Burns & McDonnell in the specified form.
17. Dick had rented rooms in a motel in Kansas City, Missouri and sent two representatives to the offices of Burns & McDonnell to await a telephone call immediately prior to the submission of bids for the final number. A summary of the various prices was prepared by the Estimating Party Chief, Mr. Ron Yingling, with the final talley being placed on the sheet immediately before the bid price was telephoned for entry upon the bid proposal sheet (Plaintiffs' Exhibit 2).
18. There is no issue between the parties as to the error made by Dick, the substance of that error or the honesty or good faith of either party in connection therewith. The error was one of procedure which caused an omission which was made in the course of preparing the lump sum proposal or bid submitted by Dick. Through inadvertence, when transferring the amount designated as Dick's bid item for "plant" which was the field overhead and general conditions item contemplated by Dick on its plant sheet in the sum of $1,100,000, the number $100,000 was placed on the summary sheet (Plaintiffs' Exhibits 3 and 4). This error resulted in the sum of $1,000,000 not being included in the total bid price. The omission caused the estimated cost of direct labor, material and subcontract work as summarized on the summary sheet to be in error. As a consequence of this mistake, the lump sum proposal or bid of Dick resulted in a $1,000,000 error.
19. The erroneous lump sum proposal or bid submitted by Dick amounted to $13,600,000.
20. On May 21, 1979, at about 2:45 p. m., Dick submitted its lump sum bid containing the error described in Finding No. 19 which was unknown to Dick at the time of submitting the bid for the construction of said project to Burns & McDonnell at 4600 East 63rd Street, Kansas City, Missouri 64141, with the bid bond as provided in the instructions and with Dick as principal and American as surety.
21. On or after 3:00 p. m. on May 21, 1979, Burns & McDonnell publicly opened the bids submitted by Dick and others which were bids submitted by the following firms in the amounts shown opposite their names:
(6) Sharp Brothers Construction Co. $ 18,577,655
(5) Boecon Corporation 16,998,000
(4) Morrison Knudsen Co., Inc. 16,950,000
(3) M. A. Mortenson Co. 15,995,000
(2) J. S. Alberici Construction Co. 15,674,000
(1) Dick Corporation 13,600,000
22. At the opening of the bids, Dick was the apparent low bidder as may be seen by reference to the above bids. Because of the discrepancy between the low bidder, Dick, and the next low bid of J. S. Alberici Construction Co., Burns & McDonnell inquired as to whether Dick had a problem with its bid. Dick and its personnel acknowledge their concern...
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