M. A. Lombard & Son Co. v. Public Bldg. Commission of Chicago

• Decision Date: 21 August 1981
• Docket Number: No. 79-1659,79-1659
• Citation: 57 Ill.Dec. 209,101 Ill.App.3d 514,428 N.E.2d 889
• Parties: , 57 Ill.Dec. 209 M. A. LOMBARD & SON COMPANY, an Illinois Corporation, Plaintiff-Appellant, v. PUBLIC BUILDING COMMISSION OF CHICAGO, a Municipal Corporation, Defendant- Appellee.
• Court: United States Appellate Court of Illinois

Page 889

428 N.E.2d 889

101 Ill.App.3d 514, 57 Ill.Dec. 209

M. A. LOMBARD & SON COMPANY, an Illinois Corporation, Plaintiff-Appellant, v. PUBLIC BUILDING COMMISSION OF CHICAGO, a Municipal

Corporation, Defendant- Appellee.

No. 79-1659.

Appellate Court of Illinois, First District, Fifth Division.

Aug. 21, 1981.

Supplemental Opinion on Denial of Rehearing Nov. 30, 1981.

[101 Ill.App.3d 515] James G. O'Donohue, Chicago, for plaintiff-appellant.

William R. Quinlan, Chicago (Earl L. Neal, Anne L. Fredd, Chicago, of counsel), for defendant-appellee.

WILSON, Justice:

M. A. Lombard & Son Company (Lombard) appeals from a judgment of the trial court in favor of the Public Building Commission of Chicago (Commission). Lombard presents two issues for review: (1) that it is fraudulent for a public body to advertise for bids knowing that the construction plans are incomplete and later make material departures in the plans and specifications; and (2) the "no damage for delay" clause does not absolve a public body under all conditions and circumstances. The pertinent facts follow.

Lombard submitted the lowest bid of $8,794,000 in accordance with certain plans and specifications, and was awarded the general works contract from the Commission on December 14, 1971, for construction of the Archer-Pulaski High School. The contract encompassed the construction of two buildings: building "A" to be completed in 360 days or by December 28, 1972, and building "B" to be completed in 420 days or by March 7, 1973.

Prior to the general contract, there were preliminary contracts awarded to prepare the site for construction. George Lombard, president of Lombard, testified that Lombard was aware of the prior contracts as well as the contractual provisions concerning changes in the work and delays.

At a meeting on December 21, 1971, Fred Coleman, the project manager for the joint venture, informed George that Lombard was going to get a notice to proceed on December 28, 1971. George informed him that the job site was not ready and asked that the day of the notice to proceed be extended to some future date. However, the notice to proceed was given on December 28, 1971.

Lombard exhibits indicated that there were numerous charges made throughout the contract period in the drawings and specifications. Lombard contends that Bulletin No. 2, dated March 24, 1972, materially changed the bid drawings with the issuance of construction drawings and additional compensation in the amount of $221,871.40 was authorized. Bulletin No. 8, issued on May 25, 1972, changed the revisions set forth in Bulletin No. 2 and contained 17 pages of revisions. This bulletin authorized extra compensation in the amount of $126,135. Further, on February 8, 1972, the Commission had accepted Lombard's bid of $634,624 for Alternate No. 2, the integrated ceiling in Building "A", in accordance with the bid drawings. Subsequent to this acceptance, numerous changes were made and Lombard was not able to proceed with this work until December 19, 1972. Bulletin No. 40, issued January 31, 1973, required additional work to the ceiling at an added cost of more than $45,000 because of lack of information at the time of installation of the electrical and mechanical work. A stop work order on all ceilings was issued on January 29, 1973, by the City Ventilation Department and was not lifted until April 5, 1973. Further, Ernest Burkhardt, field representative for the joint venture architects, testified that the work involved here was new construction, but it became a remodeling job before they were through with it.

Robert Christiansen, executive director of the Commission, testified that bids were sought before the drawings were completed to avoid the increased costs of labor and materials. However, he believed that the changes, compared to the size of the contract, were minor and reasonable from the standpoint of the Commission and were done at a later stage so as not to impede the contractor in his work. Christiansen also indicated that Addenda were issued to bidders which specifically provided that they would be incorporated into the terms of the contract. These revisions would be reflected in the construction drawings which are issued after a contract is awarded.

The Commission introduced pertinent provisions of its contract with Lombard which are as follows:

"GC-22. Changes in the Work

a. The Owner may make changes in the work of the Contractor by making alterations therein, or by making additions thereto, or by making deductions or omissions GC-24. Delays and Extensions of Time

[57 Ill.Dec. 211] therefrom without invalidating the Contract, and without releasing or relieving the Contractor from any guarantee given by him pursuant to the Contract provisions, and without affecting the validity of the guarantee or performance bond, and without relieving or releasing the surety or sureties of said bond. All such work shall be executed under the conditions of the original contract. The Contractor shall submit to Architects 'As Built' or revised drawings clearly showing the revised work, all as required by Section 1-7 of the Technical Specifications.

b. If the Contractor be delayed at any time in the progress of the work by any act or omission of the Owner or the Architects, or of any employee of either, or by any other contractor employed by the Owner, or by changes ordered in the work, or by strikes, lockouts, fire, unusual delay in transportation, unavoidable casualties, or any causes beyond the Contractor's control which would not reasonably be expected to occur in connection with or during performance of the work, or by delay authorized by the Architects pending a decision, or by any cause which the Architects and Owner shall decide to justify the delay, the time of completion shall be extended for such reasonable time as the Architects and Owner may decide.

d. It is further expressly understood and agreed that the Contractor shall not be entitled to any damages or compensation, or be reimbursed for any losses, on account of any delay or delays resulting from any of the aforesaid causes or any other cause whatsoever."

Further, the Commission points out that the contract sets forth the method to be used in determining the amounts of additional compensation to be paid Lombard on account of changes in the work. The payment formula allowed Lombard or the subcontractor performing the work to receive payment for labor and materials, plus 10% for overhead and 10% for profit. With respect to work performed by its subcontractors, Lombard, as the general contractor, received an additional 10% for overhead and profit.

Lombard was granted a time extension of 104 days and 112 days for the "A" and "B" buildings respectively and was paid an additional sum of $2,122,767.70. This action was filed to recover the sum of $1,336,082.58 on account of delay damages. ¹

OPINION

Lombard initially argues that the Commission advertised for bids knowing its construction plans were incomplete and later made material changes in the plans and specifications.

In Mohr v. City of Chicago (1904), 114 Ill.App. 283, aff'd, (1905), 216 Ill. 320, 74 N.E. 1056, the appellate court there stated that "the law clearly contemplates that before bids are advertised for, the city should determine just what work was to be done and the kind, character and quality of materials to be used therein, and should prepare a plan or profile of the work, with specifications so definite and sufficiently detailed that anyone experienced in such matters would be able to determine therefrom the particular work to be done in all its details * * *." (114 Ill.App. at 289.) Further, Illinois law supports the view that one who contracts to provide labor and materials for a construction project with the reasonable expectation that it will be done within a particular period, and who is thereafter delayed through no fault of his own, but by virtue of the other contracting party, will be entitled to recover for any consequential damages. (Edwards Construction v. Toll Highway Authority (1976), 34 Ill.App.3d 929, 931, 340 N.E.2d 572; Annot. 16 A.L.R.3d 1252 (1967).) However, potential loss from delay is inherent in any construction project. (McDaniel v. Ashton-Mardian Co. (9th Cir. 1966), 357 F.2d 511, 517; Edwards Construction.) And if the contract expressly provides for delay or if the right of recovery is expressly limited or precluded, then these provisions will control. (Edwards Construction.) All of the language in a written contract is deemed applicable to both parties. (Consumers Construction Co. v. County of Cook (1971), 1 Ill.App.3d 1087, 275 N.E.2d 696.) Where material delays in the completion of a public works contract arise without fault or culpability of the contractor, he has an action against the owner for such damages as reasonably and proximately resulted from the delays,...