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Dobson v. Rutgers

Decided: January 12, 1978.

EDWIN J. DOBSON, JR., INC., PLAINTIFF,
v.
RUTGERS, THE STATE UNIVERSITY ET AL., DEFENDANTS AND THIRD-PARTY PLAINTIFFS, V. BROADWAY MAINTENANCE CORP., THIRD-PARTY DEFENDANTS. BROADWAY MAINTENANCE CORP., PLAINTIFF, V. RUTGERS, THE STATE UNIVERSITY, ET AL., DEFENDANTS AND THIRD-PARTY PLAINTIFFS, V. EDWIN J. DOBSON, JR., INC., THIRD-PARTY DEFENDANTS



Dwyer, J.s.c.

Dwyer

[157 NJSuper Page 364] The parties in this action are identified in Briscoe v. Rutgers, 130 N.J. Super. 493 (Law Div. 1974). The court uses the same designations for the parties in this decision as it used therein.*fn1 The caption in this action

is changed because on the eve of the trial, State and Briscoe settled the one action which concerned Briscoe, of the three consolidated actions involving Briscoe, Dobson and Broadway, except for two claims for indemnification which State reserved against Briscoe.

In addition to certain specialized claims asserted by each, Dobson and Broadway are suing on alleged breaches of express and implied promises under their respective contracts to perform certain work for the construction of a medical school and to recover added costs incurred by each because the period of contract performance extended beyond the 700-day period specified in the contract by 25 months in respect to Dobson and 29 months in respect to Broadway.

Analysis of the claims shows that they are not all attributable to lapse of time such as may be the case where a wage increase occurs under a union contract, when a date for a wage increase passes, or interest is lost on retainage which is held by an owner. Some of the claims are based on the alleged lack of stairs and elevators at scheduled dates so that workers had to climb ladders and lift material by hand, with the result that workers used more time to perform work than had been anticipated. Each also alleges that it incurred substantial damages due to Rutgers' failure to deliver on time: (i) "roughing in" drawings for equipment which Rutgers was to furnish or cause other contractors to furnish; and (ii) equipment, with the consequence that the hookup work had to be done piecemeal and over a protracted period of time.

Before setting forth the defenses asserted by State and the issues, the court will set forth certain provisions of the contracts and some pretrial history of this matter so that the issues may be put in perspective.

The contract documents are massive. In 1964 and 1965, when officers of Rutgers, its attorneys and the architect were preparing the contract documents, they believed that Rutgers was subject to the public bidding statute, R.S. 52:32-1

et seq. As the statute was then written,*fn2 an entity subject to it could not let a contract to construct a building on the basis of one general contract. The statute specified that contracts for such work as electrical, mechanical, iron and general construction had to be bid and let separately. Accordingly, Rutgers drew the specifications, bids and contracts so that there would be multiple prime contracts and contractors on the one job.

The sources of funding for the medical school were federal grants as well as certain Rutgers funds. Up until the commencement of this project, it was the largest building in size and cost Rutgers had undertaken. Aggregate estimated cost was $19,300,000 of which $14,188,636 was for the six prime contracts for construction. Rutgers sought in the "General Conditions," to minimize potential delay in execution of the work on the project and to limit its liability for monetary damage resulting from delay.

Rutgers utilized two novel concepts in preparing the General Conditions designed to minimize delay in executing the work. First, it provided in the General Conditions G4-N that the contractor for general construction (which contractor

in certain of the General Conditions is called the "General Contractor," but in fact there was no general contractor) should have the following responsibilities:

G4-N.1 UNIQUE ROLE OR RESPONSIBILITY: STAFFING : The General Contractor has the responsibility for being the supervisor, manager, overseer, coordinator and expediter of all of the Contractors and of the total construction process and all of its parts, in accordance with the Contract. In executing the duties incurred by these responsibilities, the General Contractor shall provide sufficient executive and supervisory staff in the field to enable efficient and expeditious handling of these matters. There shall be at least one full-time Project Manager assigned by the General Contractor to his home office, as well as the field staff referred to above; the Project Manager shall attend each Progress Meeting at the site.

G4-N.2 OWNERS RELIANCE UPON GENERAL CONTRACTOR: The Owner relies upon the organization, management, skill, cooperation, and efficiency of the General Contractor to supervise, direct, control and manage the General Construction work and the efforts of the other Contractors, so as to deliver the intended building conforming to the Contract and within the scheduled time.

G4-N.3 OTHER CONTRACTORS' RELIANCE UPON GENERAL CONTRACTOR: All other Contractors shall rely upon the organization, management, skill, cooperation and efficiency of the General Contractor to supervise, direct, control and manage the General Construction work and the efforts of the other Contractors so as to deliver the intended building conforming to the Contract and within the scheduled time.

Second, Rutgers employed a consultant on the critical path method*fn3 to develop an arrow network diagram to illustrate

one feasible method of executing the project and a computer printout schedule showing early start-early finish dates and late start-late finish dates for all major activities. This work was reviewed by an independent general contractor for feasibility of completion within the estimated time of 700 days. Rutgers then incorporated the network diagram and schedule, as an illustration of one feasible way of executing the project, in the bid documents.

When called by Dobson, the architect testified at trial that he helped the attorneys for Rutgers prepare all provisions of the contract except for those pertaining to the critical path method (CPM). The General Conditions pertaining to the role of CPM on the project in relevant part are set forth below.*fn4 [157 NJSuper Page 369] The structure which was to house the medical school consisted of three components. These included a two-story teaching wing with a basement and an eight-story faculty wing with a basement, these two structures being joined by a two-story structure with a basement called the link. The eight-story faculty wing was designed to house offices and research

laboratories on the third floor and each floor above. The vertical piping for these laboratories came from the horizontal piping in the galleries described below.

Three design features are particularly relevant in understanding the issues in this case. The structures did not have a steel frame. Poured concrete columns rising from below [157 NJSuper Page 371] the basement floor slab to the first floor and then from the floor slab of each floor level to the eighth-floor level formed the weight-bearing structure and the frame from which precast concrete panels to enclose the interior were to be hung. In the faculty wing, a gallery located in the center of each half of each floor slab in that component of the faculty wing rose from the third-floor level through the eighth-floor level

so that there were two openings measuring 104 feet by 7 feet to permit a myriad of pipes for electrical wiring, water, specialized gases and acid drain, as well as regular waste, pipes to rise vertically to each floor and then branch laterally to service the laboratories which were grouped around each gallery. On each side of the faculty wing a set of towers was to be constructed. One housed stairs. One housed the elevators. One housed lavatories. One housed the closets for maintenance storage and janitorial sinks.

Rutgers provided in the General Conditions: "Each Contractor agrees to cooperate and coordinate his own operations in order to meet effectively all scheduled task deadlines." G4-F.4. In the form of agreement signed by each

contractor and Rutgers after the award of contracts, but which form was in the bid documents, Rutgers provided the following:

EIGHTH: The Bond, General Conditions, Drawings, Specifications, Advertisement, Instructions to Bidders, Bid Form, Addenda, if any, and this agreement form the Contract, hereinafter called the 'Contract', between the Contractor and the Owner and all thereof are as fully a part of the Contract, as if attached hereto or set forth herein at length.

SEVENTH: If the Contractor is delayed in completion of the work by any act or neglect of the Owner, Architect, or of any other Contractor employed by the Owner, or by changes ordered in the work, or by strikes, lockouts, fire, unusual delay by common carriers, unavoidable casualties, or any cause beyond the Contractor's control or by any cause which the Architect shall decide to justify the delay, then for all such delays and suspensions the Contractor shall be allowed one day additional to the time limitations herein stated for each and every day of such delay so caused in the completion of the work, the same to be ascertained solely by the Architect, and a similar allowance of extra time will be made for such other delays as the Architect may find to have been caused by the Owner.

No such extensions of time shall be made for any one or more delays unless within five (5) days after the beginning of such delays a written request for additional time shall be filed with the Architect. In case of a continuing cause of delay, only one request is necessary.

No claim for damages or any claim other than for extensions of time as herein provided shall be made or asserted against the Owner by reason of any of the delays herein mentioned.

In the General Conditions Rutgers provided:

G4-D.1 SEPARATE CONTRACTS: The Owner plans to execute this project by awarding separate Contracts, the work of which shall proceed simultaneously.

d. Failure of a Contractor to keep informed of the work progressing on the site and failure to give notice of lack of progress or defective workmanship by others shall be construed as acceptance by him of the status of the work as being satisfactory for proper coordination with his own work.

e. It is agreed that the Contractor shall not be entitled to any damages or extra compensation from the Owner on account of any work performed by the Owner or other Contractors, that in any way affects the work under this Contract.

f. In case the Contractor, by his own acts or the acts of any person or persons in his employ, shall unnecessarily delay, in the opinion of the Architect, the work of the Owner or other Contractors, by not properly cooperating with them or by not affording them sufficient opportunity or facility to perform work as may be specified, the Contractor shall, in that case, pay all costs and expenses incurred by such parties due to any such delays and he hereby authorizes the Owner to deduct the amount of such costs and expenses from any monies due or to become due the Contractor under this Contract, based on the investigations and recommendations of the Architect. Nothing contained in this paragraph shall, however, relieve said Contractor from any liability or damage resulting to the Owner on account of such delay or delays. [Emphasis supplied]

G4-D.2 MUTUAL RESPONSIBILITY OF SEPARATE CONTRACTORS: If, through the acts or omissions of the Contractor, any other contractor or any subcontractor shall suffer loss or damage on the work, the Contractor agrees to settle with such other contractor or subcontractor by agreement if such other contractor or subcontractor will so settle. If such other contractor or subcontractor shall assert any claim or bring any action against the Owner on account of any damage alleged to have been sustained, the Owner shall notify the Contractor, who shall defend, indemnify and save harmless the Owner and pay and satisfy any judgment or award entered against the Owner in any such action and shall also pay all costs and expenses, legal and otherwise, incurred by the Owner therein or thereby. [Emphasis supplied]

G4-D.6 EXTENSIONS OF TIME:

a. If the Contractor is delayed in the completion of the work by any unforeseeable cause beyond the control and without the fault or negligence of the Contractor, including, but not restricted to, acts of God, or of the public enemy, acts of the Owner, acts of another Contractor in the performance of a contract with the Owner , fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather, or delays of subcontractors

due to such cause, if the Contractor shall, within three (3) days from the beginning of any such delay notify the Owner in writing through the Architect, of the causes of delay, who shall ascertain the facts and the extent of the delay and shall extend the time one additional day to the time limitations herein stated for each and every day of such delay so caused for completing the work when the Architect's judgment and findings of fact justify such an extension, and such judgment and findings of fact thereon shall be final and conclusive on the parties hereto. [Emphasis supplied].

b. No claim for damages or any claim other than for extensions of time as herein provided shall be made or asserted against the Owner by reason of any of the delays mentioned in this Contract. [Emphasis supplied]

As mentioned in footnote 4, the section of the General Conditions for Time and Scheduling which covered CPM provided for liquidated damages in the amount of $200 a day. In relevant part it provided:

G4-F.3

It is further agreed that time is of the essence of each and every portion of this Contract wherein and whereby a definite and certain length of time is fixed by the Critical Path Method for the performance of any act whatsoever; and where under the Contract an additional time is allowed for the completion of any work, the new time limit fixed by such extension shall be of the essence of this Contract.

Rutgers received initial bids on this project in June 1966; hence the computer printout schedule included as an illustration in the bid and contract documents lists a June 1966 starting date. However, Rutgers rejected all bids and readvertised for bids to be received in October 1966, and made the awards based thereon; hence the illustrative schedule had to be corrected by five months.

The project did not run smoothly. Following substantial completion Dobson commenced suit against Rutgers in 1971. Since State had assumed all contracts, it suggested that a panel with an independent group of consulting engineers

conduct hearings to see if the matter could be resolved. The panel conducted factfinding hearings without prejudice to the rights of the parties. Briscoe, Dobson and Broadway appeared before that panel. After working for six months, the panel made its recommendations. Briscoe, Broadway and Dobson rejected them. Briscoe and Broadway then filed suit against Rutgers.

Briscoe in its complaint alleged in part that (i) Rutgers had misrepresented that the construction project could be completed in 700 days when in fact Rutgers knew, or should have known, that it could not be completed in less than 33 months and, in fact, was completed in 48 months; (ii) Rutgers retained management and supervision of the six prime contractors and Rutgers intended its agents, the architect and CPM consultant, to carry out their responsibilities of supervising the project for Rutgers; (iii) Rutgers failed to coordinate the work and actively interfered with Briscoe's work, and (iv) the contract should be reformed because of fraud. Briscoe asserted no claims against either Dobson or Broadway.

State in its answer to Briscoe admitted it held $406,882 of retainage, but asserted a set-off of $425,659 based on Briscoe's failure to perform its duty of coordination and alleged $425,659 was the amount Briscoe had in its bid for the coordination.

State asserted separate defenses based upon provisions of the contract. Based on Article SEVENTH of the form of Agreement and provision G4-D.6 of the General Conditions Briscoe had no right to money damages but only to extension of time for which it has not made proper application. State also asserted that all delays complained of were specified in the contract documents, and under the terms of the contract Owner is exculpated from damages for the alleged causes of delay. As to the other damages, Briscoe did not comply with G4-G.14 by filing timely notice.

State asserted a counterclaim against Briscoe, in part to recover the amount of money Briscoe had included in its

bid to do coordination work, to hold Briscoe responsible for any damages sustained by Dobson and Broadway for delay by reason of Briscoe's acts and failures to act, and to demand that Briscoe defend, indemnify and hold harmless Rutgers against the suit and claims of Dobson and Broadway under G4-D.2 of the General Conditions.

State filed a third-party action against each of the respective sureties for Briscoe, Dobson and Broadway, demanding that each defend Rutgers and indemnify and hold harmless Rutgers against the respective claims of the other two contractors under the provisions of G4-D.2.

Neither Dobson nor Broadway asserted any claim against Briscoe. Each contends that it has no contractual relation with Briscoe, but only with Rutgers.

Omitting, for the present, specialized claims such as those for retainage, Dobson asserted that Rutgers failed to properly coordinate and supervise the work, failed to take affirmative action to compel adherence to the work schedule, affirmatively disrupted Dobson's work by directing Dobson to perform out of sequence of scheduled operations and, finally, that the delay was so inordinate that the parties could not have contemplated it at the time of contracting. Again omitting specialized claims, Broadway asserted Rutgers failed to make decisions on time which it was obligated to make, failed to coordinate the work, failed to furnish drawings and equipment on time, directed the architect not to process shop drawings for equipment Rutgers was to furnish for over one year, and failed to allow Broadway to reschedule work in accordance with the actual pace of the work.

State in its answers conceded it held certain retainage and owed money on one change order to Broadway. It denied the allegations of the complaints and asserted separate defenses which were the same as those set up in the Briscoe answer. It also asserted a counterclaim against Dobson for Dobson to defend the action against Rutgers based on the claims of Briscoe and Broadway, and to hold Rutgers harmless from any judgment entered thereon under G4-D.2. It asserted a

similar counterclaim against Broadway for Broadway to defend and indemnify Rutgers against the claims of Briscoe and Dobson under G4-D.2.

State had taken the position in its pleadings that each party and its surety had the obligation to defend Rutgers in the lawsuit against the claims asserted by the other parties under G4-D.2,*fn5 but had neither formally tendered active control of the defense to them nor specified in any particularity what claims of each of the plaintiffs State asserted they should defend.

[The court here stated that it had directed State to file a specification of the claims which it desired Dobson and Broadway to defend, because under G4-D.2 each had only to defend claims based on its own actions or failures to act and not any suit. The court held Briscoe's claims of fraud were beyond the scope of G4-D.2. Upon State's failure to properly specify the claims to be defended and tendering the defense to Dobson and Broadway, the court dismissed the claims for indemnity, see U.S. Wire & Cable Corp., v. Ascher Corp. , 34 N.J. 121 (1961), on the ground that no organized trial could be held.]

As noted earlier, State settled with Briscoe before trial and the question of Rutgers' right to indemnification against Briscoe became moot except for the reserved claims. Briscoe appeared at trial on the two claims for indemnification.

State also moved before trial for summary judgment, primarily on the basis of G4-D.6 and D.2, and in respect to the specialized claims moved on the basis of an extensive affidavit of the architect. In respect to the latter claims there were disputed issues of fact, Hence, summary judgment was denied as to them.

Plaintiffs in connection with that motion urged that Rutgers' delegation of coordination to Briscoe violated public policy as reflected in the public bidding statutes, which require

separate contracts so that the public saves the profit of a general contractor on other contracts, and hence should be disregarded, General Bldg. Contractors, Inc. v. County of Oneida , 54 Misc. 2d 260, 282 N.Y.S. 2d 385 (Sup. Ct. 1967); General Bldg. Contractors, Inc. v. City of Syracuse , 40 A.D. 2d 584, 334 N.Y.S. 2d 730 (App. Div. 1972), aff'd, 32 N.Y. 2d 780, 344 N.Y.S. 2d 961, 298 N.E. 2d 122 (Ct. App. 1973), with the result that Rutgers had to be treated as if it had the responsibility to coordinate the work which it failed to do.

Plaintiffs' argument that Rutgers had this responsibility was based on the premise that an owner who employs several contractors to work on a project simultaneously under a contract with a fixed period of performance has at least an implied obligation to progress the work of all contractors so that each has a sufficient portion of the structure to work in at all times in order to complete the work within the prescribed time period. See Stehlin-Miller-Henes Co. v. Bridgeport , 97 Conn. 657, 117 A. 811 (Sup. Ct. Err. 1922), wherein the city had let a contract for general construction (the work of which was late and left no structure for others to work on) and separate contracts for electrical, plumbing and heating, etc., and the court said:

The rule is undoubted in circumstances such as were present in this case that an implied contract arose on the part of the defendant to keep the work on the building whether done by itself or other contractors, in such a state of forwardness as would enable the plaintiff to complete its contracts within the time limited. [117 A. at 813]

See also, Byrne v. Bellingham Consol. School Dist. No. 301 , 7 Wash. 2d 20, 108 P. 2d 791 (Sup. Ct. 1941); 11 Williston on Contracts (3d ed. Jaeger 1968) ยง 1295.

Plaintiffs further urged that the breach of the implied contract by Rutgers did not result in damages solely related to delay, but resulted in damages attributable to disruption in work and loss of efficiency of labor because of the climbing of ladders, because stairs and elevators were not delivered on

time, see Forest Elec. Corp. v. State , 52 Misc. 2d 215, 275 N.Y.S. 2d 917 (Ct. Cl. 1966), aff'd 30 A.D. 2d 905, 292 N.Y.S. 2d 589 (App. Div. 1968), and hence was outside the scope of G4-D.6.

State urged that the provision for delegation to Briscoe of responsibility for coordination did not violate public policy, KEC Corp. v. New York State Environmental Facilities Co. , 76 Misc. 2d 170, 350 N.Y.S. 2d 331 (Sup. Ct. 1973) (agency held exempt from general public bidding statute), and that G4-D.2 should be construed to mean that each of the then plaintiffs had to sue the other and had no direct cause of action against Rutgers. Compare id.

No party either contended then or contends now that the "no damage for delay" clause was invalid. The courts of this State and other states have long held that they are valid. Gherardi v. Trenton Bd. of Ed. , 53 N.J. Super. 349 (App. Div. 1958); A. Kaplen & Son, Ltd. v. Passaic Housing Auth. , 42 N.J. Super. 230 (App. Div. 1956); Ace Stone, Inc. v. Wayne Tp. , 47 N.J. 431 (1966); Annotation, "Construction Delay -- No Damage Clause," 74 A.L.R. 3d 187 (1976).

In Rutgers v. Kugler , 110 N.J. Super. 424 (Law Div. 1970), aff'd, 58 N.J. 113 (1971), the court held that Rutgers was not subject to the public bidding statute. Where a governmental unit purports to comply with such a statute as the public bidding statute by drawing specifications and advertising under it, if the statute is not applicable, it is not controlled by it. Peter's Garage, Inc. v. Burlington , 121 N.J.L. 523 (Sup. Ct. 1939), aff'd, 123 N.J.L. 227 (E. & A. 1939); cf. A. C. Schultes & Sons v. Haddon Tp. , 8 N.J. 103, 108 (1951), and such unit is free of its limitations.

Since Rutgers was not subject to the public bidding statute, the delegation of the responsibility to coordinate to the contractor for general construction did not violate public policy, if that be the public policy of this State. Cf. Gherardi v. Trenton Bd. of Ed., supra , 53 N.J. Super. at 355 (delegation to architect mentioned). The questions that

are present are (i) what were the intent of the parties, and (ii) in carrying out the contract, had the parties by their conduct modified the terms of the contract. Such questions normally are decided after trial.

[The court here noted that under the express language of the multiple contracts involved in the KEC case, supra , each contractor gave up the right to sue the owner in return for a right to sue the contractor for general construction for failure to coordinate the work of the other contractors. The court distinguished the case from the matter before it because, under provisions of G4-D.1(f),*fn6 the delayed contractor might have to sue the owner to collect monies withheld by the owner from delaying contractor to pay the delayed contractor but which funds the owner did not pay voluntarily.]

Since Dobson and Broadway steadfastly refused to sue Briscoe on the grounds that neither had any privity of contract with Briscoe but only Rutgers, the court did not have to determine whether the undertaking of the contractor at fault to pay is a basis for either Dobson or Broadway to maintain an action directly against Briscoe on a third-party beneficiary theory for purposes of deciding the motion.

Since all the material pertaining to delays in the affidavits was intertwined with other claims which could only be resolved

at trial, the court denied State's motion for summary judgment.

After commencement of the trial Dobson and Broadway each moved to amend and reduce the amount of damages claimed in the Pretrial Order. As so amended the claims are set forth in Footnote*fn7 below.

State admitted that it held retainage of $6,352.19 on the Dobson contract and $92,305.44 on the Broadway contract. State also admitted that it owed Broadway $5,273.06 on an outstanding change order. State also asserted a counterclaim for liquidated damages at the rate of $200 a day against Dobson for 25 months, and against Broadway for 29 months, or $152,400 and $176,200, respectively.

Review of the claims shows that they fall into several broad categories, some of which are the same for both Dobson and Broadway and some of which are separate. Dobson's claims 1 to 6, aggregating $73,418.48 are based on problems related to the interpretation of specifications with the possible exception of claim 5 which also relates to the question of providing temporary heat in the winter of 1968 and 1969. Broadway's claims 4, 7 and 9, aggregating $232,900.80, requires consideration of proofs and specifications unique to Broadway. The balance of the claims of Dobson ($416,077.44) and Broadway ($1,364,172) are based on contentions that the orderly sequence of the work as originally planned was changed to their detriment, particularly in the hook-up of owner-furnished equipment (OFE), there was a loss of efficiency due to the late availability of stairs and the elevators with the result that their personnel had to use ladders,

and a tremendous increase in the overhead cost of the project due to the extended period of construction as well as losses due to increased wage rates during the extended period.

In terms of the pretrial order the legal issues in relevant part are:

1. Relation of CPM consultant, architect and owner to control of project and/or control of contractors?

2. Duty of contractors to organize work (including duty, if any, of Briscoe to coordinate) in terms of CPM schedules?

3. Responsibility of Briscoe for coordination of work of contractors and meaning of exculpation clauses for Rutgers?

4. What CPM schedule was to be followed under the contract?

5. Were claims for damages and extensions of time filed within time under the contract?

6. Active interference with Dobson and Broadway by Rutgers?

7. Rutgers' obligation to furnish roughing drawings and equipment on time and responsibility in damages, if any, for breach?

8. What damages, if any, are recoverable for delay and/or disruption against Rutgers?

9. Specialized claims?

Upon learning of State's settlement with Briscoe, Dobson and Broadway urged that by that settlement State released funds which it was under a duty to withhold under G4-D.1(f) from Briscoe, which was responsible for the prime cause of the delays, and hence State was liable for breach of contract on that ground as well.

Testimony was received over a three-month period, and over 300 exhibits were introduced into evidence. When Dobson and Broadway rested their respective cases, both as to liability and damages, State moved for judgment.

[The court here reviewed standards for granting and denying motion at close of plaintiff's case, and the inferences

which it drew favorable to plaintiffs and upon which it denied State's motion for judgment.

[The court stated that State then rested without putting in any evidence other than that which had been stipulated earlier. The court then stated after review of evidence at a supplemental hearing, that all counsel agreed that Rutgers had never formally approved a "Working Plan" under G4-F.4(c) and that CPM consultant had prepared a post-bid arrow network diagram based on the contractors' logic and that it was not in evidence.

[The court stated that respective counsel for Dobson and Broadway contended that the first computer printout, D-13(a), controlled the project, and counsel for the State contended that the third computer printout, D-13(c), controlled.

[The court admitted the missing arrow network diagrams and certain computer printout updates.]

The beginning point for analyzing any contract problem is to determine what the terms of the contract are. Accordingly, the court shall consider issue 4 first, then issues 1, 2 and 3 as set forth in the Pretrial Order. The court will then consider issue 5 because it is relevant only after the terms of the contract are determined. Thereafter, the court will consider the remaining issues in order.

4. WHAT CPM SCHEDULE IS TO GOVERN THE RIGHTS OF THE PARTIES ON THIS PROJECT ?

Based on the evidence produced at trial and at the supplemental hearing, the court has restated issue 4. The reason for the change is that all parties concede there never was a formally approved working plan by Rutgers as envisioned by the last paragraph of G4-F.4(c) of the General Conditions.

Subsequent to the award of the contracts Dobson and Broadway both conferred with representatives of the CPM consultant and told them of their plans.

Edwin J. Dobson, Jr., whom the court finds had little familiarity with CPM techniques and did not attend the pre-bid conference on CPM was the only spokesman for Dobson for the initial preparation of the CPM arrow network diagram. Until January 1967, when Joseph Palmere, the job foreman, was hired, Edwin Dobson was the only supervisory personnel of Dobson doing any work on the job. He stated that his meeting with the CPM consultant was in his own office. All his remarks were oral. He had no notes. He did not testify about, and was not questioned about, any then proposed changes in logic of execution of the work.

Frank Marks of Broadway, and Elmer J. Butterwei of Broadway (Butterwei), who respectively were the home office supervisor and field supervisor, testified about the early phases of CPM. The court finds that each had knowledge of CPM techniques. Marks attended the pre-bid CPM meeting. Broadway also had under regular retainer John McCarthy, the expert on damages.

After award of the contract Butterwei was assigned to the job. Based on data gathered by other staff members at Broadway and his own analysis of the electrical work to be done and manpower needed, Butterwei furnished the post-bid data to the CPM consultant. He neither testified about, nor was questioned about, change in the logic for execution of the project.

The representatives of Dobson and Broadway all testified that the first computer printout schedule issued in late December 1966 (D-13a) was the basis for planning the job, together with the contract documents. Butterwei testified that there was not a complete schedule until the third update report in March 1967 (D-13c). D-13c included the activities which were to be performed after closing in the structures, which was the end point in D-13a, related to finishing activities such as installing toilets and hooking up equipment.

The architect stated that D-13c was the first CPM schedule with almost complete data and it was the one used most frequently throughout the job.*fn8

The arrow network diagram prepared after contract award shows that the activities to close in for each structure are reflected on the set dated December 6, 1966, and those referring to placement of laboratory equipment, Owner Furnished Equipment (OFE), and finishing details are reflected on the set dated January 18, 1967.

The court finds that until D-13c was released there were insufficient data available for a plan for the project to exist. The court finds that D-13a was used by Dobson and Broadway to schedule certain early activities but not the overall project, for it lacked basic data.

In respect to Dobson, Edwin Dobson did not do any scheduling of forces. He entrusted that work to Palmere, who began work in January 1967. He gave Palmere the contract documents, including plans and specifications, the estimated dollar amount in the bid for labor, and D-13a. Edwin Dobson testified that his father had calculated the dollar amount for labor by multiplying the quantity of pipe to be installed by dollar values per unit obtained from an estimating manual.

Palmere testified that he did not formally plot out the build-up of forces but stated he planned to build up his forces as the project progressed. Marks and Butterwei testified that they expected to have the structures rise in a unified fashion from the basements to their respective roofs and to follow with the electrical work in an orderly fashion. From the testimony on how these entities organized their forces and work, including evaluation of the credibility of the witnesses, the court finds that neither Dobson nor Broadway relied upon D-13a in organizing the forces or work for this project except in respect to some very early activities.

The court finds that D-13c was as close to a working plan as existed, and was so utilized by the parties.

Although D-13c indicated when it was released that the project was behind schedule 42 calendar days or 30 working days for the faculty wing and 22 calendar days or 16 working days for the teaching wing utilizing the early start-early finish dates, the late start-late finish dates still called for completion on September 30, 1968, 700 days after commencement of the job, and indicated no change in time for completion of the contract. See McCarthy's statements on cross-examination.

The court makes the following findings and conclusions:

1. Under G4-F.4(c) the data from all contractors had to be incorporated in the working plan.

2. The computer runs set forth in the D-13 series of exhibits are based on the post-bid arrow network diagrams. Until the completion of the diagrams dated January 18, 1967, ...


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