Opinion ID: 2616073
Heading Depth: 3
Heading Rank: 2

Heading: Compensation for widening the running track

Text: At Lease's request Holly widened the running track by adding one foot to its inside perimeter. Excavation was necessary, and some 488 cubic yards of fill were placed. The parties agree that this work was beyond the scope of the subcontract. The subcontract contained two provisions arguably applicable to this situation: Subcontract General Provisions (p) Backcharges for work beyond the basic requirements of this subcontract, performed by either party for the benefit of the other party, shall be paid for on the basis of cost plus 10 percent for overhead and profit. This shall not apply to extras performed for the owner. Backcharges shall be billed monthly and shall be promptly paid by the indebted party. Scope of Work 9. If directed, by Lease, to perform work beyond the scope of this Agreement, the following unit prices are applicable. Classified backfill and unclassified backfill from borrow: $3.50 per c.y., based on the standard cross section measurement of material, in place, after compaction. Waste removal: $2.30 c.y., based on bank measurement, by the standard cross section method. Judge Cranston awarded Holly the full amount of its backcharge, $4,202, which included a backfill cost of $3.50 per cubic yard as well as labor and equipment costs. He concluded: Paragraph 9 of the scope of work provision of the subcontract establishes a unit price of $3.50 per cubic yard for classified backfill. Thus, the provision for $3.50 per cubic yard establishes an item of cost only and cannot reasonably be interpreted as covering all items of expense incident to the work involved in executing the change order. There is no evidence that the equipment, labor and materials used for the work described in Item 7 are unreasonable. Lease maintains that the provision in paragraph 9 of a unit price of $3.50 per [cubic yard] to be paid where Lease requested Holly to perform work beyond the scope of [the] agreement included the costs of labor and equipment incurred in placing the material. We agree with this interpretation of unit price as used in paragraph 9. Paragraph 9 contains a provision for $2.30 per cubic yard for waste removal with reference to the same term, unit price. Since there is no fill to be purchased in waste removal, this suggests that the term incorporates estimated labor and equipment costs incurred in removing or placing the specified unit. There is also evidence that in Holly's bid as well as in the usage of the trade such unit prices incorporate labor and equipment costs and profit. This does not end the matter, however. The track widening entailed more than the placement of backfill; excavation and removal of material was necessary. It is possible that this should be considered waste removal under paragraph 9. If so, Holly would be entitled to compensation for the waste removal. However, it is also possible that the unit prices in paragraph 9 are not applicable because the process of widening required more precision than contemplated for the operations mentioned there. If so, paragraph (p) would govern and the actual cost of backfill rather than paragraph 9's unit price would have to be used. On remand the trial court should revise the award using either the method required by paragraph 9 or that required by paragraph (p) after conducting such supplemental proceedings as it finds appropriate.