Citations
- 436 F. Supp. 2d 1276
Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW
CORRIGAN, District Judge.
This case involves a dispute between Martin K. Eby Construction Co., Inc. (“Eby”), and the Jacksonville Transportation Authority (“JTA”) arising from Eby’s construction of highways and bridges forming part of the new Wonderwood Connector in Jacksonville, Florida. Although Eby’s end product won awards for smooth concrete, the construction project was anything but smooth, resulting in two separate multimillion dollar lawsuits by Eby against JTA.
In this case, Eby seeks over $10 million in damages relating to the difficulty it had in accessing areas of the construction site located in and over water and marshes. Eby asserts that JTA misled bidders into believing that the areas could be accessed using relatively inexpensive and uncomplicated temporary dirt haul roads and working platforms. Eby asserts that JTA is liable under breach of contract, differing site conditions, constructability, and superior knowledge claims.
The Court conducted a nine-day bench trial in December 2004 and heard closing ■arguments in January 2005. Having reviewed the pleadings, examined the evidence, observed the witnesses, read the parties’ proposed findings and conclusions, and considered the arguments, the Court makes the following findings of fact and conclusions of law as required by Federal Rule of Civil Procedure 52(a).
I. Findings of Fact
A. The Parties
JTA is an independent state agency that provides transportation services for Duval County, Florida. The services include highway and bridge design and construction.
Eby is a Kansas-based private contractor that has been involved in many large and well-known public construction projects in its 68-year history. Although Eby has had experience with bridge construction, it is not known in the industry as a “marine contractor,” i.e., a contractor specializing in projects that involve construction over water. During the relevant time period, Eby had a significant Florida presence.
B. The Project
In the 1990s, federal funds and bond proceeds were earmarked for Jacksonville’s Wonderwood Connector, a four-phased project involving the design and construction of new highways and bridges. The four phases, in chronological order from the earliest to the latest start dates, were Wonderwood Connector Segment 2A (“Wonderwood 2A”), Wonderwood Connector Segment 2 (‘Wonderwood 2”), Wonder-wood Connector Segment 1 (“Wonderwood 1”), and Wonderwood Connector Segment 3 (Wonderwood 3”).
This case involves Eby’s construction of Wonderwood 2. Wonderwood 2 consists of approximately 2.1 miles of recently constructed four-lane highways and bridges connecting Sandcastle Lane and Girvin Road. One bridge is approximately 1,400 feet long and spans Greenfield Creek. Another bridge is approximately 3,585 feet long and spans the Intracoastal Waterway and Pablo Creek.
JTA retained Sverdrup Civil, Inc. (“Jacobs-Sverdrup”), to design Wonderwood 2. Theodore Finch, originally employed by Jacobs-Sverdrup, was designated as the “Engineer of Record.” JTA also relied on its general consultant, Reynolds, Smith & Hills, Inc. (“RS & H”), to provide advice on various engineering aspects of Wonder-wood 2, and Reynolds, Smith & Hills CS (“RS & H CS”) to provide advice on various construction aspects of Wonderwood 2. George Mayforth of RS & H CS, later replaced by Shane Rixom of RS & H CS, was designated as the “Engineer” responsible for ensuring that Wonderwood 2 was constructed as designed.
C. The Planning
JTA and Jacobs-Sverdrup spent many years planning Wonderwood 2. The planning included the development of progressive bridge development reports (“BDRs”). Both RS & H, as a general consultant, and the Florida Department of Transportation (“FDOT”), as a courtesy, reviewed the BDRs and provided JTA and Jacobs-Sverdrup with feedback based on their significant experience with large highway and bridge projects.
In addition to addressing design details for the permanent highways and bridges, the BDRs addressed how the contractor would access the portions of the highways and bridges to be built over water and marshes. An aerial photograph of the Wonderwood 2 area before construction showed the Intracoastal Waterway and Pablo Creek as wide bodies of water deep enough for boating (at least at high tide), separated by a small island, and surrounded by small tributaries and marshes. The only ground that appeared relatively “high and dry” was an old railroad embankment upon or over which the permanent structures were to be built.
Generally, contractors use either barges or “temporary access structures” to access construction sites that are inaccessible by other means. As evident from the name, temporary access structures are temporary and used solely by the contractor for construction access. They are removed after project completion and the land upon which they were placed is returned to its original or near-original condition. Because of their temporary nature and limited use, they usually are not the central focus of a construction project.
Temporary access structures can take many forms, including dirt embankments, trestles, Bailey bridges, and any combination of these structures. The type of temporary access structure selected for a particular project depends on, among other factors, the availability of environmental permitting, the type and weight of the construction equipment, the manner in which the construction equipment will be used, the type and weight of the building materials for the permanent structure, when access will be needed for construction of the permanent structure, the foundation upon which the temporary access structure will be placed, and the expediency with which the project must be completed. Because many of these factors implicate the means and methods used by the contractor, the contractor usually is responsible for selecting and designing the temporary access structure. This is in contrast to the permanent structure which, unless contracted as a design-build project, usually is fully designed with exact plans and specifications for the contractor to follow, is not dependent on the contractor’s means and methods, and is not constructed for the sole direct benefit of the contractor.
At all times during the planning stage, JTA and Jacobs-Sverdrup anticipated that the contractor eventually selected for construction would use barges to access the portions of Wonderwood 2 to be built over the Intracoastal Waterway. Witnesses familiar with the construction industry agreed that such marine-based construction is less efficient, more complicated, and more costly than land-based construction. Nevertheless, barges were anticipated because of the navigability, width, and depth of the Intracoastal Waterway.
JTA and Jacobs-Sverdrup originally anticipated that the contractor likewise would use barges to access the portions of Wonderwood 2 to be built at Pablo Creek. At some point, however, they became concerned that the contractor would not be able to do so because Pablo Creek is too shallow at low-tide for barges to stay afloat or obtain access. Ultimately, they anticipated that the contractor would continue constructing temporary access structures from adjacent land, across Pablo Creek, and up to , the Intracoastal Waterway.
During the planning stage, JTA and Jacobs-Sverdrup sought to obtain all necessary environmental permits for the Wonderwood Connector so that eventual construction would not be stymied in what can be a time consuming permitting process. In its review of the BDRs, FDOT noted that, in addition to other environmental permits, environmental permits would be needed for the Wonder-wood 2 temporary access structures because of their potential impact on wetlands. FDOT informed JTA and Jacobs-Sverdrup that they would have to depict the temporary access structures to show the permitting agencies how and how much of the area would be impacted. FDOT noted that the widths of the temporary access structures would need to be consistent with the sizes of the cranes to be used by the contractor eventually selected for construction.
JTA and Jacobs-Sverdrup responded to FDOT with the size and types of cranes that they anticipated the contractor would need to use, along with their belief that the temporary access structures would need to be at least 25 feet wide and parallel to the centerline of construction for the length of Wonderwood 2. They also followed-up with JTA’s environmental consultant, Dial Cor-dy and Associates, Inc. (“Dial Cordy”), asking Dial Cordy whether they would need to provide the permitting agencies with “completed drawings” depicting the temporary access structures, and whether they would need to specify the type of temporary access structures, “i.e. fill on geogrid, work mats, or [temporary bridges]” in order to obtain the permits. (Ex. 185.)
In furtherance of the permitting process, Jacobs-Sverdrup developed drawings for the temporary access structures in the form of dirt embankments, known as haul roads, with dirt working platforms, known as “fingers,” jutting therefrom. Jacobs-Sverdrup took a “worst case scenario” approach in developing the drawings, i.e., depicting dirt haul roads and fingers that would allow the largest reasonable area of impact, which in turn would give the contractor the greatest flexibility to construct whatever type and size of temporary access structure it wanted to use based on its construction means and methods. This flexibility would allow the contractor to construct smaller temporary access structures, trestle bridges, or other structures that would cause equal or less impact to the wetlands without having to submit additional permit applications.
The drawings showed the dirt haul roads and fingers formed by placing filter fabric on top of existing water and marshland then placing fill on top of the filter fabric until the surface reached the desired grade. Mr. Finch testified that Jacobs-Sverdrup developed the drawings for permitting only, and denied that Jacobs-Sverdrup ever intended the drawings to be used as an actual design for the contractor to follow. Mr. Finch testified that, in fact, he did not anticipate that the contractor would actually end up selecting the dirt haul roads and fingers depicted in the drawings as the temporary access structure for Wonderwood 2.
Dial Cordy submitted the drawings and other information, including the anticipated crane sizes, to the permitting agencies in an application and subsequent response to a request for additional information. Dial Cordy explained that the contractor eventually selected for Wonderwood 2 construction would use barges and dirt haul roads with fingers. Dial Cordy offered more details through a portion of a letter from Civil Services, Inc. (“CSI”), a consultant that had conducted a geotechnical investigation for JTA. The letter explained that the dirt haul roads and fingers would include geosynthetic material “used to reinforce embankments placed over soft soils.” (Ex. 130.) The letter further indicated that “[d]ue to the unique nature of this type of construction, the Contractor shall negotiate with the geosynthetic supplier to provide technical instructions.... A geotextile filter of a type recommended by the designer of the geosynthetic system shall be placed under the geosynthetic reinforcement. ... Settlement of the sub-grade shall be anticipated at the site since some soft silt materials have been encountered in the area.” (Ex. 130.) Despite the detail in the letter, Mr. Finch testified that the letter was “generic” in nature, and intended only to give the permitting agencies information about how and with what materials the dirt haul roads and fingers would be constructed so they could determine their potential environmental impact.
Upon their review of the drawings and information, the permitting agencies expressed concern over the potential environmental impact that the dirt haul roads and fingers presented. In response, JTA and Jacobs-Sverdrup investigated ways to reduce their sizes, which in turn would reduce their environmental impact. The investigation included an October 2000 meeting with representatives from JTA, Jacobs-Sverdrup, Dial Cordy, and Superi- or Construction, Co., Inc. (“Superior”). Superior was the contractor for the previously-started Wonderwood 2A. It was believed that Superior would have insight into how the dirt haul roads and fingers depicted in the drawings could be reduced in size without impacting construction.
Based on Superior’s suggestions, JTA revised its permit and drawings to reduce the width and length of the fingers. Presumably satisfied with the revisions, the permitting agencies issued permits for dirt haul roads and fingers for Wonderwood 2, including dirt haul roads and fingers at Greenfield Creek and Pablo Creek.
In addition to comments relating to temporary access structure permitting, FDOT advised JTA and Jacobs-Sverdrup that they would need to include in the Wonder-wood 2 plans the temporary access structure drawings that had been permitted. FDOT cautioned JTA that it would need to specify responsibility for their design and cost. According to FDOT:
Clear bid notes need to be provided as to the method of payment for building the haul road and maintaining haul road through construction. All haul road cross sections shown in permits and plans should be shown to depict the outline of haul road only. The design of the haul road i.e. type of fill material, geogrids etc. is to be the sole responsibility of the Contractor based on the anticipated construction loads.
(Ex. 198.) At the heart of this case, as will be discussed in detail, was JTA’s inclusion of the drawings in the plans available to bidders without an indication that they were included, not as a temporary access structure design, but only to reflect the area or “footprint” and type of temporary access structure that had been permitted.
D. The Bidding
JTA’s and Jacobs-Sverdrup’s years of planning culminated in the issuance on January 8, 2001 of a “Notice to Contractors,” which began a competitive bid process for Wonderwood 2 construction. The bid process lasted 44 days, which is shorter than average, but not out of the ordinary for projects of this magnitude. Interested contractors could view plans and specifications beginning on January 8, 2001, and could submit sealed bid packages accompanied by a bid bond until February 21, 2001.
Bidding was done in typical fashion for FDOT projects in that the bid package included a bid form listing specific bid items and corresponding unit prices, all of which would be tallied to come up with an overall bid total. The bid form listed “Temporary Structure” as a separate roadway bid item, labeled as bid item “2103-1.” As a bid item, contractors were required to specify a unit price for the “Temporary Structure” which was to reflect a total of all costs for the “Temporary Structure,” including costs for design, material, labor, installation, removal, and disposal.
Information relevant to the “Temporary Structure” bid item was contained in several documents available to bidders; specifically: (1) special provisions, (2) plans and standard specifications, (3) permits, (4) soil boring information, and (5) written questions and answers. Both the “Notice to Contractors” and the standard specifications informed contractors that they were expected to examine the documents, as well as the construction site, before submitting a bid package.
1. Special Provisions
Special provision 103 addressed the “Temporary Structure” bid item. Mr. Finch had prepared special provision 103 based on FDOT’s suggestion that the contract documents should specify design and cost responsibility. Although Mr. Finch initially planned to draft a provision from scratch, he learned before doing so that FDOT’s 2000 version of the Standard Specifications for Road and Bridge Construction contained a new provision relating to temporary access structures. Mr. Finch determined that the new provision was appropriate for Wonderwood 2, so he copied it verbatim and included it as special provision 103.
Special provision 103, entitled, “TEMPORARY WORK STRUCTURES,” contains three sub-sections, including a “Scope of Work” sub-section. In the industry, a “scope of work” provision usually sets forth the work to be undertaken by the contractor. Special provision 103 states:
103-1.1 Scope of Work: Construct temporary work structures used solely to support construction equipment. Temporary structures include but are not limited to work bridges, elevated platforms, fill embankments and rail systems. Items such as barges, mats, or items such as false work or scaffolding are not included in this Section. If a temporary structure type other than the structure type shown in the plans is chosen, assume responsibility for obtaining all necessary permit revisions and the Engineer’s approval. Conform to any limitations contained in the plans and permits. Do not place embankment outside the limits shown in the plans. The cost of the embankment, placing, compaction, and removal will be included in the lump sum price for Temporary Work Structure.
103-1.2 Materials: Construct the temporary work structure using materials sufficient to handle the anticipated loads. Assume responsibility for the design of the temporary structure.
103-2 Basis of Payment.
103-2.1 General: The unit price for the temporary work structure will include all costs associated with the design, materials, labor, installation, removal and disposal of the structure.
(Ex. 60)(emphasis added). A dispute throughout the case has been whether special provision 103 is ambiguous. JTA contends that the phrase “Assume responsibility for the design of the temporary work structure” applies to the entire “TEMPORARY WORK STRUCTURES” special provision, making it clear that the contractor was responsible for design relating to the “Temporary Structure” bid item; Eby contends that it applies only to the “Materials” sub-section, indicating that the contractor was responsible only for design of the component parts of the “Temporary Structure” bid item.
2. Plans and Standard Specifications
The plans contained numerous numbered plan sheets with drawings and notes setting forth details necessary to give the contractor a comprehensive idea of the contemplated structures and the dimensions therefore. Five plan sheets, numbered 11, 40, 41, 42, and 43, contained details about the “Temporary Structure” bid item.
Plan sheets 40, 41, 42 and 43 are each labeled, “(TEMPORARY STRUCTURE) ACCESS ROAD PLAN” and include the drawings prepared by Jacobs-Sverdrup as part of its effort to obtain environmental permitting during the planning phase. (Ex. 20.)
The drawing on plan sheet 40 shows Greenfield Creek from above with lines showing locations of transmission lines, existing rights-of-way, wetland lines, a dirt haul road, and fingers. Sheet pile is shown along some of the borders of the dirt haul road. An inset labeled, “ACCESS ROAD TYPICAL SECTION” and “ACCESS ROAD TYPICAL SECTION WITH SHEET PILE,” depicts cross sections of the dirt haul road. (Ex. 20.) The cross sections show temporary filter fabric placed on existing ground, with fill placed on top of the temporary filter fabric to form a 2 to 1 vertical slope.
The drawing on plan sheet 42 shows Pablo Creek from above with lines showing locations of transmission lines, existing rights-of-way, wetland lines, a dirt haul road, and fingers. Sheet pile is drawn along some of the borders of the dirt haul road. Also drawn is an area of four cross drain pipes across the width of the dirt haul road. An inset depicts a cross section of the cross drain pipes with sheet pile on both sides. In the corner of plan sheet 42, next to the inset, is the notation: “CONTRACTOR TO BE RESPONSIBLE FOR SHEETPILE DESIGN BY P.E. SHOP DRAWINGS ARE REQUIRED.” (Ex. 20.)
The drawings on plan sheets 41 and 43 contain less detail than plan sheets 40 and 42. They do not include inset drawings of cross sections of the dirt haul road and fingers or cross drain pipes.
Plan sheet 11, labeled, “SUMMARY OF QUANTITIES,” sets forth “PAY ITEM NOTES,” that conveyed information about the costs that should go into the contractor’s estimate for various bid items. (Ex. 20.) One pay item note specified quantities for fill, filter fabric, sheet pile, and cross drain pipes for the dirt haul roads and fingers depicted in plan sheets 40 through 43:
2103-1 (TEMPORARY STRUCTURE) INCLUDES 65,545 M3 pTEM-PORARY FILL. 4-1200mm @ 40 MI EACH = 160 MI TEMPORARY CROSS DRAINS, 5380 M2 TEMPORARY SHEET PILING, 34,000 M2 TEMPORARY FILTER FABRIC, AND REMOVAL OF ITEMS LISTED ABOVE. TEMPORARY FILL IS EMBANKMENT IN PLACE WITH NO ALLOWANCE FOR SETTLEMENT OR SHRINKAGE.
(Ex. 20.) As expressly indicated, the 65,-545 M3 ± did not include allowance for settlement or shrinkage of the fill.
Another dispute throughout the case has been whether these plan sheets relating to the “Temporary Structure” bid item were akin to a design specification that the contractor had to follow with little discretion or a performance specification that afforded the contractor more leeway. Plan sheets 40 through 43 do not contain a notation that the drawings thereon are conceptual or preliminary, that they are not intended to be a design, or that they are included for the limited purpose of showing a footprint of the permitted area or the type of structure for which permitting had been obtained. Mr. Finch believed that the plan sheets did not contain enough information to be a design specification, and that the contractor would understand from special provision 103 and industry custom that it had design responsibility for the “Temporary Structure” bid item. Several witnesses agreed, however, that when material quantities are listed on a plan sheet, like in plan sheet 11, it is more likely that a design specification, rather than a performance specification, is being provided to the contractor. Further, unlike the plan sheets relating to the “Temporary Structure” bid item, a Won-derwood 2 plan sheet for channel units specifically stated that the contractor was responsible for designing temporary shoring towers;
After the dispute between Eby and JTA arose, JTA modified the bid documents for Wonderwood 1 to omit cross-sectional drawings, dimensions, and quantities of fill, filter fabric, and sheet pile. It also added a plan sheet note stating: “CONCEPT DRAWINGS FOR TEMPORARY CONST. ROAD, FINGERS AND DREDGING OPERATIONS ARE PROVIDED FOR INFORMATION ONLY AS A METHOD OF ACCESS FOR CONSTRUCTION WHICH IS ALLOWABLE UNDER THE ENVIRONMENTAL PERMIT. THE CONTRACTOR MAY USE ALTERNATE METHODS AS APPROVED BY THE OWNER AND THE PERMITTING AGENCIES. THE COST OF ALL LABOR, EQUIPMENT AND MATERIALS NECESSARY FOR THE DESIGN, CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE TEMPORARY CONST. ROAD, ... SHALL BE INCLUDED UNDER THE PAY ITEM . (Ex. 461.)
3. Permits
The documents available to bidders included the permits that JTA and Jacobs-Sverdrup had obtained during the planning phase. The permits are lengthy and detailed. They include permits for the dirt haul roads and fingers and drawings thereof depicting the dirt haul roads, fingers, and areas of temporary wetland impact.
4. Soil Boring Information
The documents available to bidders included soil boring information that had been prepared by CSI, JTA’s geotechnical consultant, during the planning phase. The soil boring information set forth blow counts and classifications of soil that could be encountered in the Wonderwood 2 area, including in the areas at or near Greenfield Creek, Pablo Creek, and the Intracoastal Waterway.
The soil boring information accurately conveyed that there were areas of very soft soil, in some places going down to a depth of 45 feet, upon which a person would “sink.” (12/10/04 Brumund 70:6.) Dr. William Brumund, a geotechnical engineer hired by Eby, described what some of the soil'boring information conveyed:
[T]he borings ... particularly in the areas of the marsh of the Intracoastal and Pablo Creek, if you look at those bor-ings, it shows between the upper 40 to 60 feet of those soils are fairly weak ... they’re high-water content.
It’s the kind of material that if you picked up these organic silts, clays, that they — they’d have the consistency that you could hold the soil and squeeze it and it would squeeze out between your fingers more easily than toothpaste would.
(12/10/04 Brumund 36:22-25, 37:1-9.)
JTA qualified the soil boring information by stating in a standard specification that it did “not guarantee the details pertaining to borings, as shown on the plans, to be more than a general indication of the materials likely to be found adjacent to holes bored at the site of the work, approximately at the locations indicated.” (Ex. 23 at 10, § 2-4.) The standard specification further stated that the contractor, “shall examine boring data, where available, and make his own interpretation of the subsoil investigations and other preliminary data, and shall base his bid on his own opinion of the conditions likely to be encountered.” (Ex. 23 at 10, § 2-4.)
5. Written Questions & Answers
The “Notice to Contractors” advertised a pre-bid meeting on January 25, 2001 to answer any questions that prospective bidders had about Wonderwood 2 and the bidding process. Mr. Finch presented an overview of Wonderwood 2. The following is part of his discussion about how the contractor would be able to access the construction site:
We have permitted temporary access roads. If you look at the plans included on sheets 40 through 43 this has been permitted. It’s 50 meters wide with an approximate 50 foot top. The access road is located coming in from Girvin Road up to Greenfield Creek on the south side of the structure with fingers to the substructure units.... Barges across are a possibility. The same thing on the Intercoastal [sic] Waterway again is an access road with fingers going out to the substructure units. On the Queens Harbor side coming out of the Intercoastal [sic], you’ve got sheet pile walls out there where you can load and off load a barge.... Coming in is a 15 meter top with fingers going out to the substructure unit, but you’re going to be severely limited with access. You need to take that into consideration.
(Ex. 54.)
The meeting included a question and answer session. The following questions and answers relating to the “Temporary Structure” bid item were published and included as an addendum to the contract documents:
4. In the areas of the Temporary Access Road, what are the natural ground elevations? We need this information to compute the volume of fill required.
Ans. On Sheets 14 and 15 of 17 in the Army Corps of Engineers permit in Appendix C we show cross sections for the Temporary Access Road fill. The Pay Item Note on sheet 11 of the Roadway Plans shows the estimated amount of fill required as 65,545 M3 of embankment compacted in place with no allowance for settlement or shrinkage.
5. In the areas of the Temporary Access Road, the typical section shows filter fabric to be laid down prior to placing the fill. What type of filter fabric is to be used?
Ans. The type of filter fabric to be used under the Temporary Access Road is up to the Contractor. The filter fabric is for purposes of aiding the contractor in restoring the area back to its original cross section.
7. In all areas of marsh fill (Temporary and Permanent), how is the settlement of the fill going to be paid for? Our concern is that during the placing and compacting of the fill, some initial settlement will occur and that over the entire construction period further settlement will also occur. Recent jobs that have had roads built over marshland have been surcharged and monitored, with a bid item by the cubic meter (M3) to cover the quantity of settlement.
Ans. In the areas of the permanent fill across the marshland, settlement of the roadway embankment was evaluated considering an embankment height of 4.6 meters. The analysis assumed that the unsuitable surficial organic soils are removed and replaced with suitable sandy materials. Results of the settlement analysis indicate that the expected settlement of the subgrade soils under the embankment loading is approximately 15 cm (0.5 feet). The majority of the settlement is expected to take place rapidly during embankment construction. It is noted that the clay or silty layers encountered during the investigation in this area are overconsolidated and have minor contribution to the expected settlement. The embankment quantity shown in the bid documents is based on the roadway cross sections. No allowance for settlement is included. See response to Question 4 for the Temporary Access Road.
(Ex. 59.) What in retrospect is unfortunate, none of the bidders asked questions about design responsibility, about whether plan sheets 40 through 43 presented a design specification, or about whether soft soil reinforcement or modification was necessary for the “Temporary Structure” bid item. A dispute throughout the case was whether JTA’s answers misled bidders into believing that there would be little or no settlement of the fill for the temporary access structures.
E. Eby’s Bid
Eby was very interested in being awarded the Wonderwood 2 construction contract. Eby managers believed that Eby was well-equipped to construct Wonder-wood 2 because of Eby’s involvement with other large construction projects, including a recently completed U.S. Army Corp of Engineers project in nearby Palm Valley. The Palm Valley project involved a similar bridge structure, but was different from Wonderwood 2 in that it could be constructed almost entirely from adjacent land that did not have similar soft soil issues.
Eby assigned an in-house team of experienced bid estimators, headed by Dave Erickson, to prepare its Wonderwood 2 bid. Eby’s estimating process included site visits and a more extensive site investigation involving walking around, taking pictures, and digging holes to evaluate the soil. Mr. Erickson testified that the site investigation was done by “at least two people,” not including himself. (12/08/04 Erickson 187:6-7.)
On January 31, 2001, Mr. Erickson wrote a letter to JTA asking for the bid time to be extended by at least one week, stating that postponement would benefit JTA by providing additional time for “[e]x-traordinary site investigation” and additional geotechnical evaluation. (Ex. 177.) JTA ended up extending the bid time by one week, from February 14, 2001 to February 21, 2001.
Although much of the Wonderwood 2 area is water and marshland consisting of soft soil apparent even to the untrained eye, nothing from the site visits or investigation led the Eby estimators to believe that access to the construction site could not be accomplished using the dirt haul roads and fingers depicted in the plan sheets. In fact, Mr. Erickson testified that the estimators who returned from the initial site investigation were excited and “less tentative about the access to the project after visiting it than we were by looking at the plans and stuff and seeing all this waterway out there.” (12/08/04 Erickson 81:8-11.)
Eby estimators did not retain a geo-technical expert to analyze the soil boring information because they felt it would have been a “needless expense.” (12/08/04 Erickson 120:23.) Dr. Brumund testified that, in his opinion, a reasonably prudent bidder would review soil boring information but would not hire an expert to analyze it if the owner provided design specifications. He also testified that, in his opinion, it would be prudent, but the exception, for a contractor to hire a geo-technical expert to review soil boring information if the contractor did not have experience in reviewing such information and if the bid documents told the contractor to inspect the site.
There is a factual dispute as to whether the optimistic view of access held by Eby’s estimators was based on their mistaken belief that Pablo Creek was just a small tributary (approximately 8-10 feet wide) and not the wide body of water that it actually is (approximately 600 feet wide). Carl Nelson, Eby senior vice president in charge of Florida operations at the time, testified that pictures of a small tributary were labeled as “Pablo Creek” and posted in a “war room” that the estimators had set up for Wonderwood 2. Mr. Nelson further testified:
What was depicted to me on bid day is that the estimating team drove out to the end of the roadway, which was on the old alignment from the railroad, and they drove as far as they could drive on the road, got out and walked a short distance to a body of water, which was eight to ten feet wide, a couple feet deep, and couldn’t — they were not able to travel any further on the — on the old railroad right-of-way because of water and soft — soft soil conditions and other marsh-like conditions that prevented from traveling.
(Depo. 11/29/04 Nelson 12:11-21.)
[DJuring the discussions, during the bidding process as it related to Pablo Creek, it was represented to me by Dave Erickson that Pablo Creek was eight to ten feet wide and only a couple feet deep and that it could easily be bridged over by pushing in a berm of dirt across the^ — the creek. That was— that interpretation or opinion by Mr. Erickson was contrary to what the contract documents or the bid documents at the time indicated, which indicated a much wider creek, which would have been key in the decision on whether Eby bid the project or not. Had Eby known or had I known that it was going to involve a lot more marine construction, Eby would not have bid that project.
(Depo. 11/29/04 Nelson 7:1-14.)
Whether because of the mistaken belief that Pablo Creek was nothing more than a small tributary, or because the plan sheets did not specify that the drawings were included for the limited purpose of showing the permitted area and type of structure for which permits had been obtained, or because the plan sheets did not indicate that soft soil reinforcement and modification measures were required, or because special provision 103 did not state that the contractor had design responsibility in the “Scope of Work” subsection, or because of a combination of some or all of these circumstances, Eby continued to believe through most of the bid time that temporary access could be accomplished by constructing the dirt haul roads and fingers depicted in the plan sheet drawings. According to Mr. Erickson, Eby believed that it could use the existing railroad embankment for “major parts of the crossing, and that the access was — that it was sound and it would hold us up, and that as we had to get out to the other end, we had a good access point there to continue the embankment out.” (12/08/04 Erickson 81:21-25.)
Eby first realized that the dirt haul roads and fingers might require more than what was depicted in the plan sheet drawings just one or two days before the bid deadline. Prompted by a phone call from a friend, Mr. Erickson reviewed quotes that had been sent to Eby from two outside vendors specializing in soil stabilization materials, Contech Construction Products, Inc. (“Contech”), and R.H. Moore & Associates, Inc. (“R.H. Moore”).
Generally, Contech and R.H. Moore provide quotes to potential bidders, often unsolicited, in an effort to sell their products and services. Bidders are interested in their quotes because they employ or are associated with “specialty engineers” who know more about the properties of soil reinforcement materials, such as geogrid and geotextile, than general geotechnical engineers. (12/16/04 Kelley 46:1.) Eby had “lots of business dealings with Con-tech, for years and years.... ” (12/08/04 Erickson 92:18-19.)
For Wonderwood 2, Contech and R.H. Moore provided quotes to most or all potential bidders for the “Temporary Access” bid item based on their review of the soil boring information and other contract documents. Both Contech and R.H. Moore advised Eby that the dirt haul roads and fingers depicted on the plan sheet drawings would require soil reinforcement measures in the form of geotextile or geo-grids. Contech’s quote included a design based on the geometry and soil boring information with calculation signed and sealed by a Florida professional engineer; multiple layers of Tensar® geogrid for soft soil reinforcement; separation filter fabric in addition to the geogrids; a statement that on-going settlement was expected throughout construction; a design assumption for a 250-ton crane to be placed over a double mat and positioned a minimum of 2 meters from the edge of the platform; a requirement that no more than one foot of fill be placed per day; and a waiting period of 15 to 20 days after completing the construction platform prior to placement of the crane.
R.H. Moore’s quote was for “High-Strength Woven Geotextile Fabricated Panels Based on soil reports in bridge documents” and an engineering layout to be provided by Mirafi Construction Products (“Mirafi”). (Ex. 293.)
Contech’s and R.H. Moore’s price quotes were markedly different: Contech’s quote was $26M2 per unit ($1,225,072.20) while R.H. Moore’s quote was only $5.03M2 per unit ($171,020.00). Mr. Erickson testified that he was taken aback by the quotes because neither the plan sheet drawings nor the materials specified in plan sheet 11 included soft soil reinforcement in the form of geogrid or geotextile. Mr. Erickson described his reaction to .the quotes and the resulting course of action by Eby:
You know, obviously where is this coming from? There’s nothing in the plans and specs that say this. So I said [to a Contech representative] come on in here tomorrow morning and we’ll sit down and we’ll talk about it.
And he came into the office and laid out his work, within a day before the bid, explaining that we should be utilizing all the stuff that they’re having, which amounted to millions of dollars, because he felt that’s what was needed to make the project work.
Well, we listened to what he said. We kind of — we listened to everything he had to say, asked him a few questions.
And then we excused him. We said, Thank you very much for coming, and we continued to talk amongst ourselves. And I recall that we moved in to the library that we had in our office there and we had quite an involved discussion about what we had to do and what we needed to do....
(12/08/04 Erickson 93:4-12, 93:24-25, 94:1-6.)
In the meeting referenced by Mr. Erickson, on the eve of the bid deadline, Eby estimators discussed the concerns expressed by the vendors and whether to include the Contech or RH Moore quotes in their estimate for the “Temporary Access” unit price. Eby did not want to include costly quotes from vendors if their materials or services were unnecessary, but at the same time was concerned over the soft soil issues that they had raised. At trial, JTA’s counsel asked Mr. Erickson why he did not seek clarification from JTA on temporary access and soil reinforcement issues before submitting Eby’s bid. Mr. Erickson responded: “We certainly had an option to call them, but they wouldn’t have answered or commented on that. I mean, that’s just — in our industry that’s just not done.... They would have said, Bid it like you see it. Common response to that problem.” (12/08/04 Erickson 180:15-17, 180:20-21.)
Based on discussions at the meeting, Eby decided to increase its estimate for the “Temporary Access” bid item by using the R.H. Moore quote and by adding $125,000 for labor since the Mirafi® fabric in the R.H. Moore quote is difficult to install. Eby selected the R.H. Moore quote because it was less expensive and because an Eby estimator had good experience with Mirafi® fabric from another project involving construction over soft soils.
Eby prepared two separate estimates for the “Temporary Structure” bid item but ultimately only used one. Eby labeled one as “Bid Item 110” and one as “Bid Item 111.” Bid Item 110 was used for the bid package that Eby submitted. Bid Item 111 was prepared during the bid process but was not used. Bid Item 110 and Bid Item 111 took different approaches to the “Temporary Structure” bid item.
Bid Item 111 determined how much the dirt haul roads and fingers would cost if Eby used the plan sheet drawings and specified materials. The difference between the fill listed in Bid Item 111 (130,-007 cubic yards) and the fill listed in plan sheet 11 (65,545 cubic meters, which converts to 85,017 cubic yards) was the amount that Eby estimated for shrinkage and settlement since plant sheet 11 specifically stated that the 65,545 cubic meter amount did not account for shrinkage and settlement.
Bid Item 110 determined how much the dirt haul roads and fingers would cost if Eby made cost-saving changes to the plan sheet drawings and specified materials. One change involved “flipping” the location of the dirt haul road and fingers in the area of Greenfield Creek. JTA’s drawings ón plan sheet 40 showed the dirt haul road and fingers on the south side of Greenfield Creek. Eby believed a more cost-effective approach would be to build them on the north side where the old railroad embankment offered better and higher soil conditions that would require less fill. Other changes involved changing the dimensions of some of the fingers and eliminating sheet pile in the area of Pablo Creek. JTA’s drawing on plan sheet 42 showed sheet pile on the north side of Pablo Creek, but did not show an opposing line of sheet pile on the south side. Eby believed from this placement that JTA intended the sheet pile to serve only for erosion control and not for structural support. Eby believed that it could use rip-rap for erosion control and thereby eliminate the need for more costly sheet pile. Eby believed that JTA would approve these changes.
The different approaches in Bid Item 110 and Bid Item 111 were reflected in their cost estimates. Bid Item 110 estimated a total cost of $1,460,000 for temporary access structures; while Bid Item 111 estimated a total cost of $2,290,973 for temporary access structures. Bid Item 110 estimated that 30,845 cubic yards of fill would be needed for the area east of the Intracoastal Waterway; while Bid Item 111 estimated that 84,530 cubic yards would be needed for the same area. Bid Item 110 estimated that it would take only twenty days to cross Pablo Creek; while Bid Item 111 estimated that it would take 180 days to construct a dirt haul road and fingers with sheet pile across Pablo Creek.
Eby estimators did not give specific reasons for not using Bid Item 111, but one can reasonably assume that it was not used because it reflected a higher estimate that might prevent Eby from being the lowest bidder and because Eby thought it could successfully build the dirt haul roads and fingers for the amount listed in Bid Item 110.
F. Superior’s Bid
The only detailed evidence offered by either party about the efforts of other bidders related to Superior, the contractor for the previously-started Wonderwood 2A. Superior’s Wonderwood 2 bid ended up being only slightly (1.2%) higher than Eby’s bid. JTA called Peter Kelley, the vice president of Superior’s Florida operations, to testify about how Superior approached the Wonderwood 2 bidding process and, in particular, the “Temporary Access” bid item and its corresponding unit price.
According to Mr. Kelley, Superior had been “extremely interested in and extremely aggressive on” the Wonderwood 2 bid because of its work on Wonderwood 2A and the availability of its crews and equipment in the area. (12/16/04 Kelley 20:4-5.) This aggressiveness led Superior to take bidding risks that it ordinarily would not take.
In preparing its bid, Superior did an extensive site investigation of Wonderwood 2, including flying over the area in a helicopter, conducting surveys to determine the amount of fill needed for dirt haul roads and fingers, and evaluating the soil boring information. Superior did not rely solely on its experience with Wonderwood 2A because it believed that Wonderwood 2 presented different conditions.
Superior estimators believed from their reading of special provision 103 and industry practice that the Wonderwood 2 contractor would be responsible for choosing, designing, and constructing temporary access structures. Superior viewed the plan sheet drawings not as designs but as an indication of the permitted area and the type of temporary access structure allowed by the permitting agencies.
From their own site investigations and conversations with representatives from Contech, RH Moore, and other vendors, Superior determined that the soils at the construction site were “weak and extremely marginal” and that there would be significant settlement of any dirt placed thereon. (12/16/04 Kelley 27:6-7.) According to Mr. Kelley, the vendors had “expressed concern about the soils and what it was going to take to adequately support the equipment out there, and that there would be, you know, some form of reinforcement required.” (12/16/04 Kelley 42:25, 43:1-3.) Superior was not misled into believing otherwise based on the plan sheet drawings, listed materials, or any of the pre-bid questions and answers.
Superior concluded that the “Temporary Access” bid item was the riskiest part of the Wonderwood 2 bid because of the soft soil conditions and Superior’s understanding that it would be responsible for choosing and designing the type of temporary access structures to be used for construction. The bid item was made more risky by the fact that, at the time of submitting its bid, Superior had not decided exactly what type of temporary access structure it would use for all areas of Wonderwood 2. It had determined only that in some areas it would use dirt haul roads and fingers with soil reinforcement. It also had considered a dirt haul road and fingers at Pablo Creek, but with trestle bridges instead of cross drain pipes because it believed that cross drain pipes would fail under the weight of heavy construction equipment.
Without knowing exactly how it would proceed if awarded the bid and with the understanding that it was taking a risk with the “Temporary Structure” bid item, Superior came up with an estimated cost of $1,034,837 for the “Temporary Structure” bid item, but inserted a unit price of $1,658,000 to account for the risk, markup, or indirect costs. These figures included estimated costs for geogrid purchased from Contech, sheet pile, and approximately 70,000 cubic yards of fill (almost twice what Eby estimated in Bid Item 110). Mr. Kelley opined from his review of the contract documents and industry experience that if Superior had been awarded the contract and temporary access proved to be more expensive than it had estimated because of the design Superior had chosen or the way in which it proceeded with construction, Superior would be responsible for any additional cost.
Superior did not consider using barges for construction at Pablo Creek because it did not think that barges were an option. Superior thought that if they had been an option, JTA would have obtained permits to dredge and use barges rather than permits to construct dirt haul roads and fingers. Mr. Kelley opined that the use of barges at Pablo Creek, as opposed to dirt haul roads and fingers, would have increased the overall construction cost by an amount between $500,000 to $1,000,000 because of the inefficiencies, difficulties, and increased costs inherent in marine-based construction. Mr. Kelley explained that, despite the higher cost, Superior would have liked the option to use barges for construction at Pablo Creek because it would have taken some of the risk out of estimating the “Temporary Structure” unit price.
G. The Bids and JTA’s Estimate
Seven contractors, including Eby and Superior, submitted timely bids to JTA. The bid totals ranged from Eby’s low of $36,887,852.12 to GLF Construction Corporation’s (GLF’s) high of $49,975,237.15. The unit prices for the “Temporary Structure” bid item ranged from Eby’s low of $1,460,000 to GLF’s high of $4,000,000.
Once the sealed bids were opened and tabulated, JTA disclosed an estimate that had been prepared by Jacobs-Sverdrup and RS & H during the planning phase. The estimated total was $40,277,186.31, or $3,389,334.19 more than Eby’s bid total. The estimated unit price for the “Temporary Structure” bid item was $517,425, or $942,575 less than Eby’s unit price.
Although Mr. Finch was involved in preparing and reviewing the overall estimate, he could not recall who had prepared the estimate for the “Temporary Structure” bid item, or on what information it was based, but believed that he had assigned the task to one of his younger engineers. Mr. Finch posited that the estimate could have been based on materials alone without accounting for design costs. Mr. Finch indicated that design costs usually would not be included in a temporary access bid item because they typically would be very minor relative to the materials cost.
No one who testified knew exactly why there was such a wide range of estimates (from $517,425 to $4,000,000) for the “Temporary Structure” bid item, though Mr. Finch presented a logical explanation that the estimators use widely varying programs and methods to come up with estimates, and may have considered creative approaches to the “Temporary Access” bid item, from the use of barges to the use of pre-owned Bailey bridges. Eby, which determined cost-effective changes to the dirt haul roads and fingers depicted in the plan sheet drawings (flipping the dirt haul road from the south side to the north side of Greenfield Creek, replacing sheet pile with rip rap at Pablo Creek, and changing the dimensions of some of the fingers in other areas), is a good example of a contractor that used an alternative approach resulting in a decrease in its estimate amount.
H. The Bid Award to Eby
JTA awarded the Wonderwood 2 contract to Eby as the lowest qualified bidder. The contract was for a fixed price of $36,887,852.12. Eby’s estimating team was “ecstatic” and felt good about their estimate, particularly since their bid total was only slightly lower than Superior’s bid total. They presumed that Superior’s bid total reflected a thoughtful estimate based on relevant experience since Superior had been constructing Wonderwood 2A and had been involved in previous FDOT and JTA highway and bridge projects.
Eby assigned Mr. Erickson to be the project manager. Although he had never been a project manager for Eby prior to Wonderwood 2, he had many years of operational experience in the construction industry and specific knowledge about Won-derwood 2 that he had gained from his role in preparing Eby’s bid.
I. The Contract Documents
JTA and Eby entered into a written agreement in April 2001. Mr. Nelson signed the written agreement on behalf of Eby. As earlier discussed, several contract documents, many quite lengthy, governed the parties’ relationship. The contract documents included the contract itself, the special provisions, the plans and standard specifications, and the permits. The parties rely on several different provisions of the contract documents to assert their respective positions.
1. Differing Site Conditions Provision
Standard specification 4-3.7 is a differing site conditions provision typical of ones found in most public works contracts. Its purpose is to discourage bidders from increasing bids to account for unexpected conditions by assuring them that increased costs resulting therefrom will be reimbursed. The result is a lowering of bids and concomitant cost savings to the governmental owner. Standard specification 4-3.7 provides:
Differing Site Conditions. During the progress of the work, if subsurface or latent physical conditions are encountered at the site differing materially from those indicated in the Contract, or if unknown physical conditions of an unusual nature differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the Contract are encountered at the site, the party discovering such conditions shall promptly notify the other party in writing of the specific differing conditions before the Contractor disturbs the conditions or performs, the affected work.
Upon receipt of written notification of differing site conditions from the Contractor, the Engineer will investigate the conditions, and if it is determined that the conditions materially differ and cause an increase or decrease in the cost or time required for the performance of any work under the Contract, an adjustment will be made....
(Ex. 56 at 1-8, § 4-3.7.)
2. Quantities Provision
Standard specifications 2-3 and 9-3 are typical quantities provisions. Similar to the differing site provision, their purpose is to prevent bidders from increasing bids to account for unexpected material variations by assuring bidders that increased costs resulting therefrom will be reimbursed. Standard specification 2-3 provides:
2.3 Interpretation of Estimated Quantities.
For those items constructed within authorized plan limits or dimensions, use the quantities shown in the plans and in the proposal form as the basis of the bid. The Department will also use these quantities for final payment as limited by the provisions for the individual items. For those items having variable final pay quantities that are dependent on actual field conditions, use and measurement, the quantities shown in the plans and in the proposal form are approximate and provide only a basis for calculating the bid upon which the Department will award the Contract.
Where items are listed for payment as lump sum units and the plans show estimates of component quantities, the Department is responsible for the accuracy of those quantities limited to the provisions of 9-3.3. Where items are listed for payment as lump sum units and the plans do not show estimates of component quantities, the Contractor is solely responsible for his own estimates of such quantities.
The Department may increase, decrease, or omit the estimated quantities of work to be done or materials to be furnished.
(Ex. 23 at 10, § 2-3.) Standard specification 9-3.3, referenced in standard specification 2-3, provides:
9-3.3 Lump Sum Quantities:
9-8.3.1 Error in Plan Quantity. Where the Department designates the pay quantity for an item to be a lump sum and the plans show an estimated plan quantity, the Department will adjust the lump sum compensation only in the event that either the Contractor submits satisfactory evidence or the Department determines and furnishes satisfactory evidence that the plan quantity shown is substantially in error as defined in 9-3.2.1.
9-3.3.2 Authorized changes in Work: Where the Department designates the pay quantity for an item to be a lump sum and the plans show an estimated plan quantity, the Department will adjust compensation for that item proportionately when a plan change results in a significant increase or decrease in the quantity from the estimated plan quantity. When the plans do not show an estimated plan quantity or the applicable specifications do not provide adjustments for contingencies, the Department will compensate for any authorized plan change resulting in a significant increase or decrease in the cost of acceptably completing the item by establishing a new unit price through a supplemental agreement as provided in 4-3.2.3.
(Ex. 23 at 75, § 9-3.3.)
3. Order of Precedence Provision
Article 5-2, entitled, “Coordination of Contract Documents,” seeks to account for any discrepancies in the numerous contract documents. (Ex. 21 at I14, Art. 5-2.) Article 5-2 sets forth an order of precedence under which the special provisions control any discrepancy with other contract documents, including the plans and standard specifications.
4. Claim Notice, Documentation, and Amendment Provisions
Special provision 5-12 specifies conditions that must be followed for Eby to bring a claim against JTA; specifically, notice, record-keeping, and content requirements. Special provision 5-12.2 required Eby to give JTA advance written notice before beginning any work that Eby deemed to be outside the scope of the contract documents. If Eby failed to do so, it would be deemed to have waived any claim for additional compensation or time relating to the work. Special provision 5-12.7 required Eby to keep daily records of all labor, material, and equipment costs relating to any work that Eby deemed to be outside the scope of the contract documents and to provide the records to JTA. Special provision 5-12.3 required Eby to provide certain information with any claim for additional compensation or time. It also prohibited Eby from amending either its bases for entitlement or amount of compensation or time asserted in its claim.
J. Eby’s Plans to Proceed
On March 14, 2001, after submitting the winning bid but months before construction actually began, Eby held an internal bid review meeting to transfer information from its estimating team to its construction team. In meetings of this type, Eby uses a computer-generated form listing standard subject headings and checklists thereunder to ensure that all relevant information is transferred. Subject headings include, “PROJECT PRINCIPALS ...” “CONTRACT,” “PLANS AND SPECIFICATIONS,” “ANYTHING UNUSUAL OR SPECIAL,” “GEOGRAPHIC LOCATION,” “SCHEDULE,” and “POSSIBLE PROBLEMS IN THE ESTIMATE.” (Ex. 53.)
Different aspects of access to the construction site were discussed by the Eby estimating and construction teams as reflected by notations under these headings on the form created for Wonderwood 2. Eby did not call a witness to identify who wrote the notations, but Mr. Erickson testified that they could have been written in advance of the bid review meeting or as a result of discussions between the estimating and construction teams at the meeting.
Under the subject heading, “PROJECT PRINCIPALS ...,” was a checklist item entitled, “Any basic feelings the Estimators have developed during the bid time,” and a sub-item entitled, “good,” next to which Eby wrote, “Access is key to job.” (Ex. 53.)
Under the subject heading, “GEOGRAPHIC LOCATION” was a checklist item entitled, “Possible Differing Site Conditions” and sub-items entitled, “Why?” and ‘What areas?” next to which Eby wrote: “Possible problem with plan design of temp, access” and “Platform ‘soft’ ground may cause it to fail. *Need to be careful: Can’t expect them to take responsibility for their design in one area, then not use their alignment in another area without a credit.” (Ex. 53.)
Mr. Erickson testified that Eby inserted the notation: “Platform ‘soft’ ground may cause it to fail,” because of the Contech and RH Moore quotes indicating soft soil issues and the need for soil reinforcement measures. According to Mr. Erickson, the estimating team wanted to make the construction team aware of the problems “so that we didn’t just go out there and do something foolish, like drop a crane into the marsh. So we made them aware that further investigation was necessary to make sure that we had a safe work plan.” (12/08/04 Erickson 109:10-14.)
Mr. Erickson further testified that Eby inserted the notation stating, “Need to be careful: Can’t expect them to take responsibility for their design in one area, then not use their alignment in another area without a credit,” to alert the construction team that if they expected a cost adjustment in their favor for the dirt haul roads and fingers in some areas where reinforcement would be needed, they would have to expect a cost adjustment in JTA’s favor relating to Eby’s cost-saving plans to flip the dirt haul road from the south side to the north side of Greenfield Creek, replace sheet pile with rip rap at Pablo Creek, and change the dimensions of some of the fingers in other areas.
On