For affirmance as modified -- Chief Justice Hughes, Justices Mountain, Pashman, Clifford and Schreiber and Judge Conford. For reversal -- None. The opinion of the court was delivered by Conford, P.J.A.D., Temporarily Assigned.
[71 NJ Page 147] Plaintiff brought this action on a contract for engineering services rendered the defendants and had a recovery of damages in the Superior Court, Law Division. On appeal by defendant
County of Hudson and cross-appeal (as to damages) by plaintiff the Appellate Division affirmed on the Law Division opinion. We granted petition for certification by defendant and cross-petition by plaintiff. 69 N.J. 75 (1975).
For more than a year prior to October 1965 the Hudson County Park Commission ("Commission") had been planning a proposed park development on the Hackensack River in Jersey City, with the expectation of federal financial aid. A report on the matter and an application to a federal agency for the purpose had been prepared by Hugh C. Clarke, consulting engineer to the Commission. The expenses and obligations of the Commission are defrayable by the county. N.J.S.A. 40:37-231, 233. In early 1965 the federal agency approved the application, and by resolution of May 26, 1965 the Park Commission approved the agreement therefor and recommended its approval by the county board of freeholders. Clarke's report reflected an estimated cost range of $3,700,000 to $4,009,800 for the entire project of which $3,486,000 was the proposed cost of construction.
In June 1965 the Commission adopted a resolution authorizing plaintiff to prepare preliminary plans and specifications and survey work for the project. Plaintiff immediately began work on the project. On October 13, 1965, the parties formally agreed by a detailed 12-page contract that plaintiff would perform services for the park project, which were to "include engineering design and supervision of construction of the Project as well as the preparation of preliminary and final plans required by the Housing and Home Finance Agency and the Park Commission in connection with the referenced Housing and Home Finance Agency Project P-NJ-3269." The contract was approved by a resolution of the Board of Chosen Freeholders of the County of Hudson on the same date, and the contract was signed on behalf of the board of freeholders by its director. Paragraph 3 of the resolution recites: "The cost for the work and services in connection with the aforesaid Project are [sic] to be defrayed out of Federal funds."
The work to be performed by the plaintiff as engineer was set forth in Part III of the contract and was divided under five basic headings entitled: A. "In General"; B. "Engineering Design"; C. "Nominal Supervision"; D. "Supervision of Construction"; and E. "Additional Work and Services". The specific duties subsumed under "Engineering Design" included the following: preparation of plans, specifications and cost estimates, the activities in connection with bidding (preparation of bidding documents, performance of professional consulting services related to advertising for and obtaining bids, provision of sets of specifications for bidding construction and record purposes, and having a representative attend and advise at bid openings); performance of all engineering services required for financing of the project; establishing boring locations; having representatives attend meetings of the Park Commission, assistance in obtaining field surveys; and preparation and revision of schedules of expenditures. "Nominal Supervision" included a variety of supervisory duties which were to be performed weekly or from time to time, such as submission of reports on request, approval of shop drawings and equipment, and periodic visitation to the site for checks on progress. "Supervision of Construction" involved daily coordination of construction work and on-site inspection.*fn1
Provision for compensation under the contract was set forth in three separate parts: (1) Engineering Design and Nominal Supervision; (2) Supervision of Construction; and (3) Additional Work and Services, the latter covering any work and services not otherwise provided for or contemplated by the agreement "as ordered * * * by the Park Commission". "Engineering Design and Nominal Supervision" were to be computed on the basis of 7% of the "As-Built" cost of construction. "Supervision of Construction"
was to be computed on the basis of an additional 3% of the "As-Built" cost of construction.
The contract also provided in respect of payment of fees for engineering design and supervision:
(a) A total of 7% of 80% of the Engineer's Estimate of the probable cost of each construction contract will be due in 3 stages as follows:
(1) In an amount equal to the funds received from the Federal Government payable when and as said funds are received for the preliminary Plans for Project P-NJ-3269;
(2) In an amount equal to the funds received from the Federal Government of final plans of Project P-NJ-3269; (3) The final balance of 7% of 80% of the Engineer's Estimate of the probable cost of each construction contract when such funds are appropriated by the County.
(b) Seven (7%) of eighty (80%) of the amount of the bid of the successful bidders at the time of the award of each construction contract, less amounts previously paid.
(c) The balance necessary to bring the payments to a full seven (7%) of the As-Built cost of construction in a series of payments based on Contractor's actual performance. Final payment, seven (7%) per cent of the As-Built cost of construction, shall be paid to the Engineer within thirty (30) days after completion of the work under the contract as certified by the Engineer.
The 3% of construction cost was to be paid in a series of monthly installments based upon the cost of the contractor's actual performance.
Frank G. Manning, head of the plaintiff corporation, testified that between October 13, 1965, the date of the contract, and the end of January 1966, he performed "the major part of the work on the preliminary plans" and also some work on the final plans and specifications. These were submitted to the Board of Chosen Freeholders and the Park Commission on March 4, 1966. Along with the preliminary plans and specifications plaintiff submitted a bill in the amount of $46,122. On the face of the bill, it is stated: "[For p] rofessional services in preparation of preliminary report and plans for Project P-NJ-3269, Lincoln Park, Jersey City, N.J."
Plaintiff's report presenting the preliminary plans and specifications also contained an upgraded ...