CONCRET CRUB COMPANY
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CITY OF HOPKINS
1010 FIRST STREET SOUTH. HOPKINS. MINNESOTA 55343 · 612/935-8474
January 4, 1985
Clty CounCll
Clty of Hopklns
1010 First Street South
Hopklns, MN 55343
Dear Councll Member:
On December 14, 1984, I met wlth Concrete Curb Company at thelr
request, R1Ck O'Gara, Glb Strasburg and Attorney John Prueter
attendlng for Concrete Curb and Gordy Anderson, John Stro~an and
Blll Cralg attendlng for the Clty.
Concrete Curb Company alred thelr obJectlons to the lmposltlon of
the per dlem penalty ln the tardy completion of the 10th Avenue
North parklng lot reconstructlon proJect.
The agreement was entered into on July 14 , 1983 for $92,802.00
and conslsted of the maln agreement, the City speclflcatlon packet
and the Standard Speclflcatlons for Constructlon (1983 Edltlon) of
the Minnesota Department of Transportatlon. The pertlnent
chronology of dates pertalnlng to thlS proJect occurred as follows:
1. Bld letting, July 1, 1983
2. Award of contract, July 5, 1983
3. Date of contract, July 14, 1983
4. Date of bond, July 15, 1983
5. Constructlon meetlng wlth partlclpants, August 1, 1983
6. Initial proJect work by subcontractor (excavator), September 8,
1983
7. Commencement of work by contractor, September 28, 1983
8. Completion of work by contractor, November 18, 1983
The completlon date filled in on the contract lS November 1, 1983.
The completlon date called for by the speclflcatlons lS October 15,
1983.
Durlng the course of completion, the proJect required addltlonal
quantities of materlal lncreaslng the contract to $117,5067.64
representlng a 27% lncrease ln dollars.
The amounts pald by the Clty to date are as follows:
Contract Total
$117,567.64
Less:
Amount Paid to Date
Liquidated Damages of 33 days at
$250.00 each
$ 91,821.52
8,250.00
$100,071.52
TOTAL DUE CONTRACTOR
$17,496.12
The contractor obJects to the imposltlon of the liquidated damages
provlded for ln the contract amounting to $8,250.00 for the follow-
ing prlnclpal reasons:
a. The contractor claims he lS entitled to an addltlonal 25.1 days
to complete the proJect because of the correspondlng lncrease
in Slze of the proJect from $92,802.00 to $117,567.64:
b. The contractor lnslsts the contract is the maln document WhlCh
provldes for a contract completlon date of November l, 1983 as
opposed to the speciflcatlons which are attached to the agree-
ment by reference calling for a completlon date of October 15,
1983:
c. The contractor relies on the DOT Standard Speclflcatlons for
Construction, Paragraph l80l.l, C (3) which prOVides:
"No charge wlll be made: a) when work on the progress-
controlling operatlons cannot be effectlvely prosecuted for at
least 2 hours of the dally work schedule: b) on Saturdays,
Sundays and legal holidays: c) during the incluslve perlod from
November 15 to Aprll IS: d) during periods of authorlzed work
suspenslon, except when suspension lS ordered for reasons of
fault or negligence on the part of the contractor. (Emphasis
added): e) NSP caused delays by not remOVing the telephone
poles in a prompt fashion thus requiring them to proceed by
fragments in laying asphalt."
In response, the City staff makes the following pOints:
a. The speclflcatlons made a part of the agreement callIng for a
completion of October 15, 1983 prevall:
b. The November 1 date wrltten lnto the main contract was done by
the contractor wlthout thelr knowledge, permlsslon or consent:
,$
c. Paragraph 1806 of the DOT Spec1f1cat1ons prov1de for reason of
publ1C 1nterest that essential work be prosecuted continuously
and effectively wlth the least poss1ble delay so that all work
can be completed wlthln the tlme frame allowed. The Clty
argues the contractor dellberately delayed lnitlatlon of the
proJect untll September 28 because of other Job requirements
the contractor had pendlng at the same tlme and that thls delay
was avo1dable and dlrectly caused the delay In reachIng the
called for completlon date.
The followlng factual clrcumstances and the p01nts argued by e1ther
slde present an lnterestlng sltuat10n concernlng the lmpos1tlon of
the penalty lns1sted upon by the Clty and reslsted by the
contractor. The contractor has adm1tted he purposely delayed
commencement of thlS proJect because h1S est1mat1on of the amount
of work to be done would permlt hlm to reach the completlon date.
Because lt lS lmposslble to accurately estlmate what eventualltles
wlll occur durlng a proJect and because the agreement prOVided for
additional compensatlon for add1tlonal materials and work to be
performed, I conclude the contractor who gambles on the completlon
of a proJect must bear the burden and responslbll1ty of losses
occasioned by hlS m1scalculation.
HaVing concluded that contractor lS llable under the llqu1dated
damages clause of the contract, the real problem 1S calculating the
amount because two complet1on dates are 1n the agreement and the
DOT Spec1f1catlons provlde for a cutoff date of November 15 on 1tS
assessment. Add1t1onally, the contractor presents an 1nterestlng
argument on the increases in the quantities requ1red 1n the
completlon of the proJect. There is no clause prov1d1ng for the
language of the main contract If In contrad1ct10n to any of the
attachments to the contract will supersede the attachments and
prevall in application.
1. Nothing appears to contradlct Paragraph 1806.1, C (3) provldlng
for a cutoff In any event of the assessment of penalt1es as of
November IS:
2. Because the contractor was at fault 1n gambl1ng on the
complet1on date, I do not believe he can take advantage of
argUing hlS entltlement to relief because of addltlonal
quantltles requlred by the proJect as It progressed:
3. I believe the wrlt1ng in the maIn contract call1ng for a
completion date of November 1 would be construed to prevail
over the prInted completlon date of the attached speCIfIcatIons
calling for a completion date of October 15, unless parol
eVIdence is aV11able to d1sclose the true lntent of the
parties. In contract law, the ambigUity is construed against
the draftsman and a wrIting (as in the completion of a blank)
w1ll prevail over prInt.
, .
J
Therefore, I conclude a penalty of $250.00 dally should be assessed
against the contractor from November 1 to November l5 of $3,750.00.
Yours very truly,
"
'-- '7V1 ~ -~_- c- ~
Jerre A. ~lller
JAM/Jw
Attachments: Contract
SpecIfications
Quantity and Cost
cc BIll CralgJ
L/
EstImate