Opinion ID: 2513995
Heading Depth: 4
Heading Rank: 1

Heading: Equipment standby between May 3 and May 17, 1996

Text: Quality argues that it was entitled to compensation for equipment standby during the period between its receipt of the state's notice of intent on May 3 and its receipt of the notice to proceed on May 17. Quality claims that the contract terms allowed recovery for standby once the state accepted Quality's bid and issued a notice to proceed. The state responds that Quality would only be entitled to compensation for standby if the state took some action that subsequently forced [Quality's] equipment to be idle. The state further argues that the terms of the contract do not support Quality's claim. The state's intent to award letter of May 2, 1996 to Quality stated in part: The transmittal of these documents constitutes only an intent to award. A Contract will not be in force until these documents are fully executed by the Department and a Letter of Award and Notice to Proceed are issued. You are advised that work prior to that Notice is unauthorized and the State will assume no responsibility for the work, the work site or any event arising therefrom. The hearing officer determined that the state's notice of intent to award was not sufficient to grant Quality recovery of standby costs before the state issued the notice to proceed. Quality argues that the notice of intent to award did not define the parties' rights once [the] notice to proceed [was] issued and a contract [was] in force. Quality argues that, taken together, §§ 101-1.34-.35 and 108-1.02 of the contract permit recovery for work before the effective date of the notice to proceed. [9] We hold that the hearing officer did not err in denying Quality compensation for standby from May 3 to May 17. [10] Section 108-1.02 states that [c]ommencement of work by the Contractor prior to the effective date of the Notice to Proceed constitutes a waiver of this notice and will begin contract time. Quality argues that this provision make[s] clear that the contractor may properly commence certain types of work prior to the notice to proceed. But Quality incorrectly reads § 108-1.02 in isolation from other portions of the contract. Section 101-1.17 defines contract time as [t]he time allowed under the contract, including authorized time extensions, for the completion of all work by the Contractor. The purpose of § 108-1.02 is not to allow a contractor compensation for starting early, as Quality argues, but rather to prevent a contractor from altering the calendar days or completion date of a project and thereby avoid liquidated damages. [11] Moreover, § 101-1.71 defines work as the act of, and the result of, performing services, furnishing labor, furnishing and incorporating materials and equipment into the project and performing all other duties and obligations required by the contract. Quality did not perform work by letting its equipment sit idle from May 3 to May 17. It completed no work as defined by § 101-1.71 of the contract until May 17 when it received the state's notice to proceed. Perhaps circumstances could arise in which action by the state would result in the idling of a contractor's equipment after it had started work, but that was not the case here. Any claim for compensation for Quality's preparation before May 17 was properly categorized by the hearing officer as a claim for mobilization costs. Because the state's letter of intent to award did not conflict with the contract's provisions, the hearing officer did not err in determining that the letter of intent to award relieve[d] the State of any responsibility for idle equipment costs incurred between May 2... and May 17.