Court of Claims Ruling Upheld – Contractor Entitled to Reimbursement from Government Under Unit Contract

Harrison & Burrowes Bridge Constructors, Inc. v. New York, 839 N.Y.S.2d 854 (N.Y. App. Div. 2007)

The claimant filed suit in the Court of Claims seeking additional compensation for its rehabilitation and resurfacing of eight bridges under a unit-price contract with the State of New York.  The state offered several reasons for its refusal to pay the claimant for labor and materials supplied under the contract.

First, the contract required the state to pay the claimant for the total number of markers installed, including any markers damaged by traffic.  The state refused to pay for an additional 1,478 replacement markers installed by the claimant, arguing that the bid proposal, upon which the contract was based, only covered the installation of 868 markers.  Affirming the Court of Claims, the appellate court found that the state should pay for the additional 1,478 replacement markers.  Although the contract (which required the claimant to replace damaged markers) did not specify who would be obligated to pay for those markers, the court reasoned that the contract did not require the claimant to include the cost of replacing markers in its bid.

Second, the state disputed the amount owed for the claimant’s paint removal services.  After the state deleted those services from the original contract and announced new paint removal guidelines, claimant’s subcontractor withdrew, the parties never agreed on a new price, and the paint was removed as force account work.  Consequently, the court found that the claimant was entitled to costs plus a 20 percent profit margin in accordance with the contract’s force account provisions.

Third, the court held that state was not required to compensate the claimant for incremental costs incurred due to curing cement in cold weather.  The court reasoned that exculpation provisions regarding liability for damages arising due to performance delays are valid so long as there is no breach of any fundamental, affirmative contractual obligation imposed on the other party.

Finally, the court upheld the determination that the state must pay the claimant for repairing damaged concrete.  The court explained that the parties each provided different theories regarding why the concrete had not properly cured, thereby damaging a bridge.  As such, the court deferred to the trial court’s determination that the claimant’s explanation was more credible.