On appeal from the Superior Court of New Jersey, Law Division, Mercer County.
Before Judges Michels, Skillman and Wefing.
Defendant State of New Jersey, Department of Transportation, (State) appeals from a judgment of the Law Division that awarded plaintiff Barnett & Herenchak, Inc. damages in the sum of $85,245.70 for engineering services rendered to the State under several contracts.
Plaintiff entered into several contracts with the State for the performance of engineering consultant services in connection with modification of several existing bridges within the State of New Jersey. The contracts were standard consulting contracts which provided for payment on a cost-plus basis. The first of these contracts, in pertinent part, specifically provided for payment to plaintiff as follows:
Direct actual straight time payroll paid to employees and to principals while performing technical work on a project, not to exceed the approved schedule of hourly pay rates in paragraph O; (an equivalent payroll rate per hour as determined by prevailing State Policy will be used for principals time when engaged in technical work under Part FIRST, Paragraph O), plus
(b) The premium portion of overtime hourly wages for approved overtime hours, not to exceed the approved schedule of hourly pay rates in Paragraph O, plus
(c) 110% of the actual direct straight time and approved overtime payroll to cover estimated fringe costs and overhead, plus
(d) Out-of-pocket expenses which are directly chargeable to the project and are peculiar to the project and which are not normally provided as part of the administrative overhead of the Consultant, at cost. (Payment for use of motor vehicles is limited to the prevailing rate per mile as determined by State Policy accumulated in pertinent work on the project, exclusive of commutation).
The remainder of the contracts contained similar provisions. The contracts also provided that the final payments would be subject to audit in accordance with the following provisions:
C. Final payment for services will be subject to audit to ascertain conformity with generally accepted cost principles, in particular Federal Procurement Regulations
Subpart 1-15.2 - "Principles and Procedures for use in Cost-Reimbursement Type Supply and Research Contracts with Commercial Organizations."
D. A final payment for unpaid services due on A-1 above at the time of acceptance of all work specified in part FIRST shall be made on the basis of:
1. An audit of direct payroll actually paid to employees while engaged exclusively upon the project on the basis of the approved schedule of hourly ...