On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. MER-L-629-01.
Before Judges Skillman, Wells and C.S. Fisher.
The opinion of the court was delivered by: Skillman, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This appeal requires us to construe a"termination for convenience" provision in a State contract.
After competitive bidding, the Division of Building and Construction (DBC)*fn1 entered into a contract with plaintiff in May 1996 for removal of asbestos on the first through fourth floors of the Labor Building in Trenton. The amount of the contract was $1.6 million, and the project was required to be completed in 460 days.
Due to safety concerns, the Department of Labor was required to evacuate all personnel and equipment from the entire floor from which asbestos was to be removed before plaintiff could begin work. To enable the Department to continue its operations while the work was performed, the parties agreed that plaintiff would perform the asbestos removal work one floor at a time.
In accordance with this plan, plaintiff started work on the first floor in June 1996 and completed all work on the first and second floors sometime in the second half of 1997. However, the Department encountered difficulty relocating its employees on the other floors to enable plaintiff to complete its work. As a result, the DBC issued an order in October 1997 which directed plaintiff to suspend all work until the Department was able to devise a suitable plan for relocating its employees.
Plaintiff submitted a claim for the damages it had allegedly incurred as a result of the suspension of its work. The parties subsequently engaged in lengthy negotiations concerning plaintiff's claim as well as completion of its performance under the contract.
These negotiations resulted in a supplemental agreement between the DBC and plaintiff, which was executed in January 1999. Under section A of this agreement, the DBC agreed to pay plaintiff $150,000 as"full and complete compensation for all of the Contractor's expenses, losses, claims and/or damages incurred as a result of the Order of Suspension." Section B of the supplemental agreement states in relevant part:
1. In the event the State moves forward with the Project, the State will issue a Dissolution of Order of Suspension simultaneously with a Notice to Proceed....
2. Within 10 days of the Dissolution of Order of Suspension and issuance of the Notice to Proceed, the Contractor shall return to the jobsite and complete the work on the Project, or any portion of work thereof, as determined by the State....
Section C of the supplemental agreement, the section directly implicated in this appeal, which is entitled"Termination for Convenience," states in relevant part:
1. The State may, at any time, by written order terminate the Contract or any portion thereof for convenience after determining that for reasons beyond the Contractor's control, the Contractor is or will be unable to proceed with or complete the Project as ...