On appeal from the Superior Court, Law Division, Middlesex County.
Morton I. Greenberg, O'Brien and Gaynor. The opinion of the court was delivered by Morton I. Greenberg, P.J.A.D.
This matter comes on before the court on appeal in a nonjury action from a judgment dated August 12, 1983 awarding plaintiffs Ell-Dorer Contracting Company and Huff Construction Company $5,565 from defendant State of New Jersey and dismissing the State's third-party complaint against the Township of Woodbridge. H. Thomas Carr Associates was also a defendant in the trial court but at oral argument we were advised that no claims are now being asserted against it and consequently we no longer treat it as a party. We conclude that the action against the State should have been dismissed and consequently we reverse the judgment against it.
This matter originated when Woodbridge hired H. Thomas Carr to develop construction plans for improvements and construction
of Blair Road in Woodbridge. In February 1976 Woodbridge submitted an application to New Jersey Department of Transportation (D.O.T.), Bureau of Local Federal Aid Programs, for federal aid funding for the project. After approval of the application, the State and Woodbridge in October 1977 entered into a contract pursuant to which the D.O.T. then took over the project from Woodbridge and thus terminated Carr's responsibility.
Inasmuch as the construction work was to be performed by an independent contractor the State prepared a bid form proposal and advertised for competitive bids. The contract was to include site clearing, excavation, roadway construction, paving and landscaping. The bid form itemized 82 items of work including item 8, "Roadway Excavation, Unclassified." The form included "Approximate Quantities" for many of the items and thus unit and extended prices were sought. The extended prices were computed by multiplying the approximate quantities by the unit prices. The approximate quantity for item 8 was 19,948 cubic yards. Ell-Dorer was the successful bidder for the total price of $1,622,698.30. It properly supplied unit and extended prices including $7 per cubic yard and $139,636 on item 8. The State and Ell-Dorer entered into a contract for the project on January 12, 1979. The contract required Ell-Dorer to perform the work in compliance with plans on file at the D.O.T. and in accordance with the provisions of the 1961 Standard Specifications for Road and Bridge Construction of the State Highway Department, as amended by Supplementary Specifications.
In March 1979 plaintiff Huff learned that Ell-Dorer was interested in subcontracting out the excavation work specified in item 8. After Huff reviewed the plans it made a bid to Ell-Dorer for the subcontract. Ell-Dorer and Huff on April 6, 1979 entered into a subcontract agreement providing for Huff to do excavation work at the rate of $4.75 per cubic yard, for a total of $94,753. The 1961 standard specifications required the
State's consent to the subcontract. But article 1.3.7 indicated in part:
The consent to sublet any part of the work shall not be construed to be an approval of the said subcontract or of any of its terms, but shall operate only as an approval of the Contractor's request for the making of a subcontract between the Contractor and his chosen subcontractor.
On April 6, 1979 Ell-Dorer submitted a request for approval of the subcontract limited to 13,202 cubic yards of roadway excavation rather than the approximate quantity of 19,948 shown on the bid form. By so confining the request the value of the work under the prime contract being subcontracted was kept under $100,000. This was significant for Huff was not a prequalified bidder with the State and under State procedures was not authorized to perform work on the contract with a value over that amount.
The record is not clear as to how the 13,202 cubic yard quantity was determined. Charles Kolb, project manager for Ell-Dorer, indicated that a subbase quantity of 6,746 cubic yards for item 10 was subtracted from the approximate quantity of 19,948 cubic yards on item 8 to reach the 13,202 figure. However John Dorer, secretary-treasurer of Ell-Dorer, testified that he did not know the reason for the use of the 13,202 cubic yard quantity on the request form. John Helmer, resident engineer for the D.O.T. on the project was uncertain if the 19,948 roadway excavation quantity included the subbase. Nevertheless he concluded that it would probably have been assumed that the subbase was included in the 19,948 quantity. In any event on May 22, 1979 Ell-Dorer's request for approval of the Huff subcontract was granted for 13,202 cubic yards at the unit price of $7 per cubic yard, a total of $92,414.
Not long after execution of the prime contract the State became aware of a discrepancy in the quantity of excavation. This matter was discussed at a preconstruction meeting held by D.O.T. on February 7, 1979. To determine the extent of the discrepancy the D.O.T. made a survey resulting in a measurement requiring a net reduction of 1,005 ...