Court Opinion

ID: 9594993
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:34:43.892737+00
Date Added: 2024-06-11T10:45:22.249421
License: Public Domain

SICKEL and LEEDOM, JJ.
(dissenting). This is a contract for a two inch plus mat pf bituminous surface on a given strip of highway. The Highway Engineer estimated the quantities of materials needed- to complete the job, and these estimates were incorporated in the contract. The ma*601terials used in performance of the contract exceeded the amount of the Engineer’s estimates, and the Highway Commission has rejected the claim of the Contractor for the excess. There is no dispute as to the amount of the excess units of materials used, nor as to the unit price of materials as fixed by the. contract.
Claimant contends that the agreement is a unit price contract, and that the Highway Commission is obliged to pay for all excess-materials used in the performance of the contract.
The contract provides: ‘The undersigned understands that the quantities mentioned below are subject to increase or decrease, and hereby proposes to perform all quantities of work, as increased or decreased, in accordance with the provisions of the specifications, and at the unit prices bid.”
The State agreed to pay for “faithful performance” according to the terms of the contract, and to the satisfaction of the State “such unit or lump sum prices for the work actually done as are set forth in the proposal accompanying this contract, and in the manner and subject to the conditions as set forth in the said specifications”.
The specifications provide: “The bidder’s attention is called to the fact that the estimates of quantities of work to be done and materials to be furnished under these specifications, as shown on the plans or accompanying the proposal, is approximate and is given only as a basis of calculation for comparing bids and awarding the contract. The State does not assume any responsibility that the quantities given shall obtain in the construction, and reserves the right to increase or diminish the quantities shown, or to omit any of them, as it deems necessary.” Spec. 2.2.
The estimates of quantities of materials are not specifications of exactness, nor are they limitations upon the State’s liability. The agreement of the State is to pay the unit price for all materials used in the performance of the contract.
The State contends: “* * * That the quantities of materials specified in the plans and proposal are final except for the power of the State to make changes by the method *602set forth in the specifications.” Also: “Under the contract, it was the responsibility of the contractor to see to it that no excess material went into this highway unless he had written authority to apply such excess material”.
“What we have is a contract to do a defined quantity of work according to certain specifications with a unit price payment feature. A fair reading of the specifications cannot produce any different conclusion but that the unit price payment feature was inserted in the contract for the sole benefit of the State in order that the State Highway Engineer might increase or decrease the work to be done and having done so, have a readily ascertainable basis for recomputing payments to be made under the contract.”
This interpretation of the contract confuses “extra work” which relates to materials furnished and work done in addition to the requirements of the contract and for which a change order is required, and excess materials used in the performance of the contract according to plans and specifications.
The distinction is recognized in Section 4.4 of the specifications in the following language:
“The Contractor shall perform such work in addition to the quantities shown on the approximate estimates as may be deemed necessary by the Engineer to complete fully the project contemplated. The project limits may also be changed as deemed necessary.
“* * * If the sum total of the increase or decrease on all items figured at the unit contract prices is not more than twenty-five (25) per cent of the total original contract the Contractor shall receive and accept payment in full on the basis of the contract unit prices.”
In this case the claim is for quantities or units used in the performance of the contract, in addition to the quantities shown on the estimates of the Engineer, and the claim is allowable under the specifications referred to above.
The Highway Commission contends that because the units of materials used in the project exceeded the estimates of the Engineer, the compacted mat laid upon the highway exceeded the specified thickness of 2 inches plus.
*603The materials were necessarily deposited on the highway and the thickness measured at a depth sufficient to allow for compaction. The witnesses estimated that compaction would amount to %th to V2 inch. It was necessary to set the spreader by probing and testing the depth of the spread with an instrument called a stinger, operated by the Highway Commission’s Engineers and Inspectors. The evidence fails to show the amount of compaction allowed by the Engineer in arriving at his estimates. Neither does the evidence show the -amount allowed for compaction by the Engineers and Inspectors in measuring the depth of the spread. There is no evidence to show the thickness of the mat after compaction, and it cannot now be measured with the stinger because of solidity. The evidence does not show any attempt to measure it since compaction.
The evidence upon which the State relies to prove the use of excess materials is the Engineer’s estimates of materials as contained in the contract. Those estimates of quantities are only approximate, given only “* * * as a basis of calculation for comparing bids and awarding the contract”. “They were not intended to obtain in the construction”. Spec. 2.2. The Contractor was obliged to perform the work in applying such additional quantities “as may be deemed necessary by the Engineer to complete fully the project contemplated”. If the materials consumed exceed the estimate by less than 25% of the estimates: “* * * The Contractor shall receive and accept payment in full on the basis of the contract unit prices”. Estimates of quantities of materials under this contract have no probative value whatever as to the quantities required to complete the contract.
The above conclusions are consistent with prior decisions of this court. The case of England v. State, 61 S. D. 132, 246 N.W. 628, was an action on quantum meruit for work not authorized by the contract, and the contract had never been modified. The Contractor could not recover. In the Kansas City case it was held that extra work is that which is not required to be performed by the contract, and that the Engineer could not waive the provisions of the contract as to extra work. In the Griffis case the claim was for *604extra work and it was held that a written order for such work is required; that the Engineer and the Inspector could not vary the contract. None of these three cases relate to materials in excess of estimates needed to perform the contract according to its terms.
The Highway Commission also contends that: * * The facts proved show that the officers and employees of the State Highway Department did not even attempt to exercise a direct positive control over plaintiffs in their performance of the contract. * * * Under the contract, it was the responsibility of the contractor to see to it that no excess materials went into this highway. * *
The contract provides that the work shall be done under the direct supervision of the Highway Engineer and to the complete satisfaction of the State Highway Commission. Spec. 5.8.
As to the authority of the Inspectors the specifications, 5.7, provide:
“Authority and Duties of Inspectors. Inspectors employed by the Commission shall be authorized to inspect all work done and all materials furnished. Such inspection may extend to all or any part of the work and to preparation, fabrication, or manufacture of the materials to be used.
“An Inspector may be stationed on the construction to report to the Engineer as to the progress of the work, the manner in which it is being performed, to report whenever it appears that the materials furnished and the work performed by the Contractor fail to fulfill the requirements of the specifications' and contract, and to call to the attention of the Contractor any such failure or other infringement. Such inspection, however, shall not relieve the Contractor of any obligation to perform all of the work strictly in accordance with the requirements and specifications.
“In case of any dispute arising between the Contractor and the Inspector as to materials furnished, or the manner of performing the work, the Inspector shall have the authority to reject materials or suspend work until the question at issue can be referred to and decided by the Engineer. Work performed by the Contractor, after written order by *605the Inspector to suspend operations, will not be accepted, or paid for, by the Commission. The Inspector is not authorized to revoke, alter, enlarge, or release any requirements of these specifications, nor to approve or accept any portion of the work, nor to issue instructions contrary to the plans and specifications. * * *”
Harvard C. Rempfer, the State Highway Engineer, testified that the only method of obtaining exact control is measurements of area and quantity over areas that have been spread and compacted. He testified that Mel Harris was the Project Engineer. Sanders was the Highway Commission’s representative on the job to carry out the Commission’s instructions and the regulations and specifications. The witness testified that excess materials might not be wrong. He also testified that the road was accepted by the Highway Commission. The spreading machine was accepted as standard equipment, one universally used.
Summerside was Assistant Construction Engineer for the Highway Department. He testified that the only effective method of control over materials was the checking of quantities spread on a given area.
Lovejoy, Bituminous Engineer, testified that he did not know that materials in excess of estimates were going in until the final estimate had been prepared.
Harris, the Project Engineer, testified that he had charge and control of the operations, usability of materials, interpretation of the specifications and plans; that he visited the job 25 times, and attempted through the Inspectors to control the joh, not to take over. He did not know that excess tonnage was going in during the course of construction. At no time during the progress of the work did Chief Inspector Sanders tell him they were not getting the yield. “If Sanders knew it he did not tell me.”
Sanders, a Commission representative, testified that he knew they were running long on the job, but that he gave no orders to the Contractors’ men but told them about it.
McCready, .Superintendent for the Contractors, tested depth and Sanders watched and assisted him to see if it (the stinger) was sinking in too far or not far enough. *606Either Sanders or one of the Commission’s men stayed with the machine constantly when operating, and the Contractor was not allowed to dump a load in the machine “if our man was not there.” “I never gave orders in the strict sense, but I made suggestions and I found McCready cooperative in following my suggestions.”
Youell, Highway Commission Inspector, testified that he worked as Inspector 10% of the time of the job and checked quantities of material; took the number of tons used in a given distance twice early on the job, and once or twice afterwards; that the first test showed that the excess tonnage being used was very slight and he gave no orders to the Contractors’ men; talked it over with Mc-Cready.
The Highway Commission contends that the estimates were sufficient to lay the mat according to specifications, and on this premise contends that the mat must have exceeded the specifications in thickness. The contention that the thickness of the mat exceeded the specifications is not supported by any evidence whatever. It should be noted that after measuring the quantities according to area on the road at least three times during the progress of the work the Inspectors found no error in the thickness of the mat and made no change in the setting of the instrument used in making the measurement of thickness. The Commission and its employees had no knowledge of the use of materials in excess of estimates until computations were made between the estimates and the quantities used, after the job was finished. The only reasonable conclusion one can draw from these facts is that the estimates of work and materials contained in the contract were treated as estimates only, and that the estimates were not regarded by the Highway Commission as a limitation on the liability of the State under the contract.
The contract, including the specifications, clearly establishes the control of the job by the Highway Commission through its Engineers and Inspectors, and the record shows the exercise of that power. The authority of the Engineers and Inspectors to suspend operations in case of disagreement, and the power of the Engineer to settle disputes is decisive on this question.
*607If the Highway Commission is correct in its contention that the estimated quantities of materials are final, subject only to a change order, then the contract is not a unit price contract, but a fixed price contract. If it is a fixed price contract then, with the Highway Inspectors and Engineers in complete and absolute control of the spreading as in this case, performance of the contract was complete when the Contractor had spread the estimated quantities of materials upon the highway. Such interpretation of the contract is not justified. By the terms of the contract the estimates were not final but approximate given only as a basis for calculating and comparing bids, and awarding the contract. They were subject to increase or decrease as deemed necessary by the Engineer, and the contract imposed upon the Contractor the duty to spread additional materials at the unit price when this was found by the Engineers to be necessary to fully complete the project. No extra work order was contemplated unless the contract limits were changed by order of the Engineer and there was no such order. These are the distinguishing features of a unit price contract.
For the reasons above stated it is our opinion that the claim of the Contractor should be allowed and paid.