ADP Marshall, Inc. v. Noresco, LLC (710 F. Supp. 2d 197, 2010)

DECISION AND ORDER

MARY M. LISI, Chief Judge.

Plaintiff ADP Marshall, Inc. (“ADPM”), a subsidiary of Fluor NE, Inc., brings this action for breach of contract against defendant Noresco, LLC (“Noresco”) in connection with the construction of a cogeneration facility (the “Facility”) for the Rhode Island Department of Mental Health, Retardation and Hospitals (“MHRH”). ADPM has also raised claims pursuant to a payment bond issued by Noresco’s surety, Lumbermens Mutual Casualty Co. (“Lumbermens”). Both Noresco and Lumbermens have asserted counterclaims against ADPM as well as third-party claims against ADPM’s co-sureties, St. Paul Fire and Marine Insurance Company (“St. Paul”) and Fidelity and Deposit Company of Maryland (“Fidelity”), together with St. Paul, the (“Co-Sureties”). The action was tried by the Court sitting without a jury and the parties have submitted extensive post-trial memoranda. The Court’s Findings of Fact and Conclusions of Law pursuant to Fed.R.Civ.P. 52(a) are set forth below.

BACKGROUND

I. Procedural History

On April 6, 2007, ADPM filed a complaint in this Court against Noresco for breach of contract, book account, unjust enrichment, quantum meruit, and attorney’s fees. ADPM also asserted a bond claim against Lumbermens. ADPM sought payment from Noresco for “unpaid labor, materials and costs” in connection with a construction agreement it had entered with Noresco in April 2002. Based on an approved contract price of $13,643,156 and ADPM’s receipt of payments totaling $12,415,451, ADPM initially sought payment from Noresco in the amount of $1,227,705. Complaint ¶¶ 14-16. In addition, ADPM sought $1,629,222 for what it claimed as uncompensated increases in scope of work. Id. ¶ 17.

Noresco asserted a counterclaim for breach of contract; a claim against ADPM’s payment bond; and a claim for specific performance for the delivery of “as-built” drawings of the completed Facility, certificates of inspection, operational and maintenance manuals, and a valid Certificate of Occupancy. Further, Noresco brought a third-party claim against the Co-Sureties for refusing to indemnify Noresco when ADPM failed to pay its subcontractors.

On April 7, 2009, this Court dismissed several claims which had been withdrawn or rendered moot; in the same order, the Court denied the parties’ cross motions for partial summary judgment. ADP Marshall, Inc. v. Noresco, C.A. No. 07-129ML, Docket No. 107 (D.R.I. April 7, 2009). During the course of discovery, the parties engaged in settlement discussions but were unable to resolve their differences. Before commencement of the trial, both parties presented numerous motions in limine, which the Court took under advisement.

II. The Trial

The Court conducted an eight-day bench trial from September 21 through September 30, 2009. Prior to trial, the parties submitted a Joint Statement of Undisputed Facts (hereinafter cited as “SUF”) that listed 81 statements regarding the case on which all parties agreed. C.A. No. 07-129 ML, Docket No. 127. At the trial, ADPM presented two witnesses as part of its case-in-chief: (1) Edward McNaught (“McNaught”), who was employed by ADPM as project manager on the Project ; and (2) Douglas Coppi (“Coppi”), who testified as an expert on construction scheduling. Noresco presented four witnesses: (1) Wade Carleton (“Carleton”), Y.P. of Construction for Noresco; (2) Theresa McKinnon (“McKinnon”), general counsel for Noresco; (3) Bradford Bright (“Bright”), who testified as an expert on the scope of construction projects and analysis of change orders; and (4) Kenneth Monson (“Monson”), who testified as an expert on construction schedule analysis and delay. The parties elicited testimony from their respective witnesses with reference to more than 230 multi-page exhibits, including construction contracts and attachments; communications between the parties; change order requests with applicable backup information; daily reports; design sketches; and detailed construction plans. In addition to Exhibits 1 through 952, which were admitted by joint consent of the parties, the Court admitted into evidence approximately two dozen disputed exhibits. On the fourth day of trial, ADPM and Noresco submitted a three-tabbed stipulation (the “Deviation Stipulation”), which listed certain change order requests submitted by ADPM that were (1) approved by Noresco but not paid to ADPM; (2) not approved by Noresco and in dispute; or (3) initially claimed by ADPM but withdrawn or reduced in the course of discovery. In addition to listing the various change order requests, the jointly submitted document also describes their payment status. For a majority of requests categorized as “Approved by Noresco but Not Paid to [ADPM],” a note indicates that Noresco paid the Subcontractors directly. Deviation Stipulation, Tab 1. Similarly, of the disputed deviations, a number are noted to have been “Mettled by Noresco directly to subcontractors,” or resulting in “[u]ndisputed credits to Noresco.” Id., Tab 2, p. 2.

At the conclusion of the trial, the parties were requested to submit post trial memoranda for the Court’s consideration. The findings of fact that follow herein are based on the Court’s thorough evaluation of the evidence and its determination of the relevancy and substance of the various witnesses’ testimony.

FACTS

I. The Prime Contract

On September 25, 2000, Noresco entered into the “Howard Center Cogeneration Project Design and Construction Agreement” (the “Prime Contract”) with MHRH to “furnish turnkey construction services to design, permit, build, install, startup, test, and train operators for a cogeneration facility” (the “Facility”) at the Pastore Center in Cranston, Rhode Island (the “Project”). SUF ¶ 1, Ex. 1 p. Noresco 0000379. A cogeneration facility produces steam for heat and electricity for use or sale to a local power grid. See URI Cogeneration Partners, L.P. v. Bd. of Governors for Higher Educ., 915 F.Supp. 1267, 1273 (D.R.I.1996). The Project included the construction of a new cogeneration plant with two electricity generating turbines, two heat recovery boilers, and a stand-alone boiler. The Facility was to be built adjacent to an existing boiler facility which contained older equipment and was, in part, in disrepair. Trial Tr. vol. I, 17:18-18:3, Sept. 21, 2009.

The price for Noresco’s work under the Prime Contract was set at $27,550,919 (the “Guaranteed Maximum Price”), subject to approval of the performed work and authorized changes in the work. Ex. 1 ¶ 6.1. Attached to the Prime Contract as Exhibit I are the technical specifications which define Noresco’s scope of work and include preliminary drawings of the Facility. Ex. 2. Noresco obtained performance and payment bonds from Lumbermens for the Project, which guaranteed payment of any subcontractor claims asserted against Noresco. Ex. 1, Noresco 0000454-460, Exhibit VII to Prime Contract. Under the terms of the bonds, Noresco was obligated to defend and indemnify Lumbermens against such claims.

On October 10, 2001, Noresco provided a letter of intent to ADPM, informing it that Noresco intended to enter into a subcontract with ADPM no later than October 31, 2001, in order to engage ADPM for construction management services for the Project. SUF 6. At the same time, Noresco provided to ADPM an Inspection Report (referred to by the parties as the “Vortex Report”) regarding the presence of asbestos at the existing facility. SUF 5. On October 12, 2001, Noresco provided ADPM with certain design drawings for the Project, which were labeled “75% complete.” SUF 7.

II. The Purchase Orders

Prior to ADPM and Noresco entering into the Procurement and Construction Agreement (the “Agreement”) that is at the heart of this dispute, Noresco issued a series of purchase orders to ADPM which engaged ADPM’s pre-agreement services. The parties understood that, once the Agreement had been executed, it would govern their relationship and the purchase orders would be incorporated into the Agreement.

On November 14, 2001, Noresco issued a $500,000 purchase order (the “Purchase Order”) to ADPM and requested it “to proceed with services required prior to final contract negotiations and execution of a sub-contract for construction management services” for the Project. SUF ¶ 8, Ex. 401 p. 1. The Purchase Order provides that, if “a separate subcontract or other agreement has been entered into between the parties ... the separate agreement shall control in the event of conflict.” Id. Following issuance of the Purchase Order, ADPM prepared a Project schedule and began to hire subcontractors to perform some of the initial work on the Project site. Trial Tr. vol. 1,13:6-17.

On December 21, 2001, Noresco issued a revised purchase order (the “First Revised P.O.”) which added $250,000 to the total cost “due to delay in contract execution.” SUF ¶ 10, Ex. 402 p. 5. Like the original Purchase Order, the First Revised P.O. states that “upon final execution of the subcontract, this purchase order shall be amended to include the firm fixed price, scope, schedule, and terms and conditions of that agreement.” ¶ 10, Ex. 401. On the same day, ADPM’s project manager McNaught presented a first payment request to Noresco for $678,127, reflecting a 5% retainage. SUF ¶ 11, Ex. 8. As McNaught’s request acknowledged, the initial contract sum, then set at $11,821,410, already encompassed the first requested payment. Ex. 8. Noresco paid $678,127 to ADPM on March 12, 2002. SUF ¶ 16.

On April 2, 2002, Noresco issued a second revised purchase order (the “Second Revised P.O.”) to ADPM to “add all future work performed by [ADPM] as outlined in accordance with the subcontract agreement dated March 22, 2002.” Ex. 957 p. 107. The Second Revised P.O. reflects a fixed contract price of $12,365,105. SUF ¶ 32, Ex. 957 p. 101. Shortly thereafter, ADPM secured performance and payment bonds in the amount of $12,365,105 from St. Paul and Fidelity as Co-Sureties and Noresco as Obligee. Ex. 406, 407.

On December 3, 2003, Noresco issued a final revised purchase order to ADPM reflecting an increase of the authorized amount under the construction contract to $13,478,498, to include approved change order work. SUF 34. Noresco has paid a total amount of $12,415,451 to ADPM. SUF 35.

III. The Agreement

On or about April 12, 2002, ADPM and Noresco entered into the Agreement, dated March 22, 2002, which engaged ADPM “to provide comprehensive construction services, and procurement services ... and support for its startup and testing.” SUF 17, Ex. 14 p. 9. The Agreement states that it includes “all Attachments hereto and any items specifically incorporated by reference.” Ex. 14 p. 10, Art. 1.3. The following is a summary of the most pertinent provisions of the Agreement; additional sections will be discussed in this Decision and Order as necessary.

A. Scope of Work

The Agreement generally defines the work to be undertaken by ADPM (the “Work”) as “collectively all services and duties, obligations, and responsibilities required to be undertaken by [ADPM] hereunder or in connection herewith, including those relating to the procurement of materials, construction and renovation, coordination and Commissioning, and calibration of skid mounted sensors and transmitters.” Ex. 14 p. 15, Art. 1.60. The Work, which is described in further detail in Article 1.60, also includes “all equipment, labor and materials, with sole [sic] the exception of the Noresco Provided Equipment and Noresco Supplied Systems, required for a complete and fully functioning Facility ... all as set forth in this Agreement, and its Attachments.” Ex. 14 p. 15. Art. 1.60. Under the Agreement, ADPM also assumed the responsibility “to familiarize itself with the scope of supply of the Noresco Provided Equipment and Noresco Supplied Systems.” Id. The definition of “Work” includes an acknowledgment that the Design Documents were “in some respects conceptual.” Id. Nevertheless, ADPM’s scope of work included “all items to be depicted on the final drawings, except to the extent the final design materially differs from the Design Documents.” Id.

B. Noresco Provided Equipment

Pursuant to Article 1.44 of the Agreement, Noresco was to provide certain equipment packages to ADPM for installation and preparation for startup. Ex. 14 p. 13, Art. 1.44. The equipment, which included gas turbines, heat recovery steam generators (“HRSGs”), and various boilers, compressors, pumps, and tanks, is further described in Attachment II to the Agreement, and depicted on shop drawings set forth in Attachment XIX. Under the Agreement, it was ADPM’s responsibility to install and start up the equipment and to provide oil and propylene glycol as needed for lubrication and transport. Id.

C. Noresco Supplied Systems

Noresco’s responsibilities also extended to supplying certain systems such as fuel oil tanks, OEMs (continuous emissions monitors) and opacity meters, and a concrete stack with metal liners (the “Stack”), to be installed by Noresco specialty contractors. Ex. 14 p. 15, Art. 1.61. Under the Agreement, ADPM was required to schedule and coordinate the installation of the Noresco provided systems “so that it is performed efficiently and in proper sequence.” Id. In addition, ADPM was required to furnish a foundation, piping connections, and power and control wiring for the fuel oil tanks; provide an electrical power circuit to the CEM Subcontractor; and supply a foundation, connecting duct-work, insulation, and expansion joints necessary for the Stack. Ex. 14. p. 16, Art. 1.61.1.

D. 75% Design Documents

The Agreement refers to certain design documents (the “Design Documents”) that were issued and delivered to ADPM on or about October 12, 2001; these drawings were labeled “75% complete.” Ex. 14 p. 57, Attachment I, Art. 3. With respect to the completeness of the Design Documents, Article 1.60 provides as follows:

It is acknowledged that the Design Documents are in some respects conceptual. However [ADPM’s] scope of Work includes all items to be depicted in the final drawings, except to the extent the final design materially differs from the Design Documents. It is acknowledged that notwithstanding any provision of the Design Documents to the contrary, [ADPM] is to provide for the Facility a pre-engineered metal building. Ex. 14 p. 15 (Emphasis added).

The Design Documents included the “Drawings and Specifications” referenced in Attachment XVIII to the Agreement and listed in Attachment I, Ex. 14 pp. 58-62. ADPM received “issued for construction” drawings on March 15, 2002; these drawings purported to be 100% complete, however, they were subsequently amended and reissued. Ex. 214. As the Project progressed, the Design Documents were amended to incorporate additional details necessary for construction. ADPM was responsible to provide weekly drawings (the “Record Drawings”) that “completely and accurately portray[ed] the work done to that time.” Ex. 14 p. 25. At the conelusion of the Project, ADPM was required to furnish so-called “as-built” drawings (the “as-builts”) to reflect the final status of the completed Facility. Ex. 14 p. 78, Attachment VI, Part B.

E. Technical Specifications

Pursuant to the Agreement, ADPM acknowledged and agreed “to perform the Work in accordance with the provisions of this Agreement, including without limitation the Technical Specifications attached hereto as Attachment I.” Ex. 14 p. 9. Attachment I to the Agreement (“Attachment I”) lists the technical specifications of the Project, which include (1) the Prime Contract and Exhibit I thereto (“Exhibit I,” setting forth the Prime Contract’s technical requirements), that were “previously provided to [ADPM];” and (2) the “Noresco 75% design drawings and specifications issued on October 12, 2001 [to] clarify areas of Exhibit I that were not fully developed.” Ex. 14 p. 57. In addition, Attachment I contains the following language:

It is intended that the drawings and specifications establish design and operating conditions and that it [sic] indicate general construction and special features of the desired equipment which is complete and operable when installed and operated in accordance with the manufacturer’s recommendations. Incidental items which are essential for complete and operable units, but which may not be specifically described in the specifications or not shown in the drawings, shall be included and shall be of the best available quality at no additional cost to Noresco or to [MHRH]. Ex. 14 p. 57.

F. Fixed Price

The Agreement quotes a “Fixed Price” for ADPM’s work in the amount of $12,365,105, subject to changes in the work as described therein. Ex. 14 pp. 28-37, Art. 6.1, 7. The Fixed Price also includes a sum of $ 1,052,870 in various allowances (the “Allowances”) that provide specific amounts for work that was not clearly defined at the onset of construction. Ex. 14 p. 28, Art. 6.1.1. Trial Tr. vol. I, 29:12-15. To the extent allowance items exceeded or fell below the corresponding allowance amounts, the Fixed Price was to be adjusted. Id.

G. Milestone Payments

Payment to ADPM for completed work was based on the “accomplishment of milestones and events, each of which represents a specific percentage of the Guaranteed Maximum Price and the costs associated with the allowances.” Ex. 14 p. 73. A schedule detailing such milestones and events (the “Milestone Schedule”) is provided in Part B of Attachment VI to the Agreement. The Agreement sets forth April 2003 as the Milestone Deadline for Mechanical Completion and Readiness for Testing, SUF ¶ 28, Ex. 14 p. P. 89, and it required ADPM to meet such deadlines “unless the period for completion is extended in accordance with this Agreement.” SUF 30, Ex. 14 p. 17. Readiness for Testing required Noresco’s written acceptance of ADPM’s certification that “the Facility is mechanically complete except for remaining Punch List items and the Facility, including all equipment and subsystems are ready for energized and operated (Startup) as set forth in Section 12.3 of the Agreement.” Ex. 14 p. 86, Attachment VIII.

H. Bonds

Article 9 of the Agreement required ADPM to “provide a performance and labor and payment bond in the amount of the Fixed Price” which was to remain in effect until Final Acceptance of ADPM’s performance under the Agreement. Ex. 14 p. 39, Art. 9.1.

I. Exclusions and Clarifications

Attachment XX to the Agreement provides a list of items (the “Exclusions and Clarifications”) that ADPM either agreed to provide or specifically excluded from the Agreement. Ex. 14 pp. 121-126. Pursuant to Attachment XX, ADPM was not required to perform certain tasks specified therein, which included, inter alia, architectural and engineering services; engineering services for the process/system work; obtaining any regulatory approvals required by federal, state or local authorities; and paying electric company charges. Id. at 123. ADPM excluded asbestos abatement outside the area to remain active in the existing building and on underground piping, but specifically included spot abatements for tie-ins. Id. at 121. Attachment XX also specifies some of the aspects of the pre-engineered structure which ADPM was required to furnish under the Agreement. Ex. 14 p. 122.

J. Liquidated Damages

Article 10.3 of the Agreement contains the following liquidated damages provision for ADPM’s failure to meet the April 2003 Readiness for Startup Milestone:

In the event [ADPM] fails to achieve Readiness for Startup on or before the Readiness for Startup Milestone Deadline (as the same may be amended from time to time), [ADPM] shall be liable to Noresco as liquidated damages and not a penalty, the sum of Three Thousand Dollars ($3,000.00) for each day after the Readiness for Startup Milestone that Readiness for Startup is not achieved. Ex. 14 p. 42, Art. 10.3(b).

Once MHRH acknowledged Readiness for Startup beyond the April 30, 2003 deadline, ADPM and Noresco were required “in good faith to endeavor to agree on the amount, if any, of liquidated damages” or to determine the matter in accordance with expedited arbitration procedures. Ex. 14 p. 42, Art. 10.4. All liquidated damages payable by ADPM under the liquidated damages provision of the Agreement became due “within thirty (30) days following the date Noresco submits to [ADPM] an invoice therefor.” Ex. 14 p. 33, Art. 6.7. To the extent Noresco was in default of its payment obligations to ADPM, no liquidated damages could be charged against ADPM. Id.

K. Merger Clause

Article 18.7 of the Agreement is a merger clause which states as follows:

This Agreement, which includes the Attachments referred to herein, represents the entire understanding of Noresco and [ADPM] with respect to the subject matter hereof. In the event of a conflict between the Agreement and the Attachments, the Agreement shall govern. No prior oral or written understanding shall be of any force or effect with respect to any matter covered hereunder. This Agreement may not be modified or altered except in writing signed by both parties. Ex. 14 pp. 52-53, Art. 18.7 (Emphasis added).

L. Entire Agreement

Finally, the Agreement lists 22 separate Attachments that are “made part of’ the Agreement, including, as part of the technical specifications in Attachment I, the Prime Contract and Exhibit I thereto. Ex. 14 pp. 53-54, Art. 18.11. Article 18.11 further provides that “[t]o the extent of a conflict between the [Agreement] and the Rhode Island General Conditions of Purchase , the provision imposing the higher standard, duty, cost, or obligation on [ADPM] shall govern.” Ex. 14 p. 54.

IV. The Subcontracts

To perform most of the work required under the Agreement, ADPM entered into various agreements (the “Subcontracts”) with a number of specialized subcontractors (the “Subcontractors”). See, e.g. Ex. 217, 218, 219, 220, 221, 222. Payment from ADPM to the Subcontractors for completed work was due only after ADPM had received payment from Noresco (the “pay-when-paid” clause, which mirrored the payment provision of the Prime Contract). As expressed in all of the Subcontracts, “[r]eceipts of funds by [ADPM] from Owner is a condition precedent to [ADPM’s] obligation to pay contractor under this Agreement, regardless of the reason for Owner’s nonpayment.” Subcontracts Section 6. 8, Ex. 217, Document page 6 of 9; Ex. 218, doc. p. 5 of 8; Ex. 219, doc. p. 5 of 6; Ex. 220, doc. p. 5 of 9; Ex. 221, doc. p. 5 of 9; Ex. 222, doc. p. 6 of 9.

The Subcontractors submitted bills to ADPM for work as they performed it and, if ADPM considered such work outside of its scope under the Agreement, it submitted a change order request (“COR”) or “deviation” to Noresco and requested additional payment for the particular task. Trial Tr. vol. I, 72:19-73:3. Noresco then made its own determination of whether the work was included in ADPM’s scope and either approved or disapproved the COR.

V. Asbestos Abatement

On October 8, 2001, Noresco provided ADPM with the Vortex Report for “information and use.” Ex. 741, 742, Trial Tr. vol. I, 93:10-94:14, SUF 5. The Vortex Report was based on “visually inspecting and assessing ... the condition of all known or assumed ACBM [asbestos containing building materials]” in the existing cogeneration plant. Ex. 742 p. 2. The Report had been issued by Vortex Inc. Consulting Services Division on June 30, 1995. Ex. 741 p. 1. As related by McNaught, ADPM relied solely on the Vortex Report in determining the scope of work it was required to perform under the Agreement. Trial Tr. vol. I, 96:21-97:2. ADPM also used the Vortex Report in configuring its bid package for the asbestos abatement subcontractor, Ascension Environmental, Inc. (“Ascension”). Id. 95:3-14.

While performing the preconstruction work under the Purchase Orders, ADPM discovered that the extent of the necessary asbestos abatement was far greater than previously anticipated. Ex. 168, Ex. 175, Trial Tr. vol. I, 99:21-104:4. On March 2, 2002, McNaught received a letter from Ascension, which expressed concern “over the conditions of the work areas per the specification and most notably the survey done by Vortex Inc.” Ex. 168 p. 2. Ascension attached a report from MEI Environmental Inc. (“MEI”), the consultant Ascension had hired in order to develop an asbestos abatement plan. Ex. 168 pp. 3-5. MEI alerted Ascension that it found the sampling performed for the Vortex Report insufficient. MEI concluded that “the validity of the identification and quantification of all asbestos-containing building materials within the specified areas is in question.” Ex. 168 p. 3. In addition, MEI noted the discovery of “multiple potentially hazardous substances that appear to be contaminated with asbestos-containing materials.” Id.

Upon receipt of the letter from Ascension, McNaught contacted Steven Bosland (“Bosland”), Project Manager for Noresco, and forwarded to him the information received from Ascension and MEI. Ex. 168 p. 1. McNaught informed Bosland that Ascension had been directed to “incorporate all necessary requirements” into the asbestos abatement plan to be presented to MHRH. McNaught also noted that “[w]e are tracking these potential impacts as ADP Marshall Deviation No. 000024.” Following a meeting with MHRH, McNaught submitted a revised schedule for asbestos abatement to Noresco on April 5, 2002. The schedule reflects that the abatement would have to be performed in stages, rather than all at once, and McNaught notes that there will be “a cost related” to the segmented abatement plan. Ex. 169 p. 2. McNaught’s April 5, 2002 communication also states that development of the abatement schedule “is a complicated effort, which is further hindered by the uncertainty related to the Temporary City Water Booster Pumps.” Ex. 169 p. 2.

VI. Early Construction Delay

One of the first tasks on the Project was the relocation of site utilities, including a 16 inch waterline that was located in the footprint of the planned new building. Trial Tr. vol. II, 33:10-18, Sept. 22, 2009. In late November 2001, ADPM directed a request for information (“RFI”) to Noresco, in which ADPM noted a conflict with the routing of the planned waterline. ADPM proposed the employment of a temporary booster pump and relocation of the new main waterline around the northern side of the new boiler plant. Trial Tr. vol. II, 37:24-38:7, Ex. 96 p. 1 and ADPM Revision to P-300. Noresco agreed and incorporated ADPM’s proposed solution into the design, adding an additional pump in the process. Id. ADPM then encountered significant delays in the implementation of the design, in part because the temporary booster pumps could not readily be obtained or were not compatible with the dimensions of the existing waterlines. As a result, the relocation of the waterline was not substantially completed until May or June 2002, pushing out several other subsequent activities, such as excavation of the new building footprint. Trial Tr. vol. II, 39:16^0:12.

VII. Readiness for Startup

Construction eventually progressed throughout 2002 and well into the second half of 2003. On September 7, 2003, more than four months after the April 2003 Readiness for Startup deadline had passed, ADPM submitted a “Certificate of Readiness for Startup” to Noresco, certifying that the Facility was “Mechanically Complete, except for remaining Punch List items” and that it was ready to be energized and operated. Ex. 436.

In response, Noresco informed ADPM by letter dated October 2, 2003, that it would not accept ADPM’s certificate because “the activities that we are able to complete in a start up capacity are very limited and require significant work around effort on those items necessary for mechanical completion that are not complete.” Ex. 437 p. 1. Attached to Noresco’s response letter is a six page list (the “Incomplete Work List”) with outstanding items related primarily to the two HRSGs and Boiler No. 8. Noresco noted that “[n]one of the attached checklists have been officially submitted by ADPM for acceptance” and that no startup checklists for the major electrical equipment had been provided. Ex. 437 p. 1. The attached Incomplete Work List, which details “significant work items that are incomplete, many of which have a direct impact on Mechanical Readiness for Start up,” id. at 2, includes the HRSG, an essential piece of equipment in the Project. Trial Tr. vol. II, 10:15-24.

Between November 3, 2003 and December 18, 2003, ADPM submitted a series of additional punchlists, detailing the developing status of outstanding items required for acceptance of ADPM’s Certificate of Mechanical Readiness for Start-Up. Ex. 472, 473, 474, 475, 476, 477, 478.

On November 13, 2003, Noresco delivered to MHRH a signed Certificate of Readiness for Testing for the Gas Turbine Generators and the HRSGs. The accompanying coverletter notes that a separate certificate will be delivered with respect to Boiler No. 8, which is “currently being tuned with different firing tips.” Ex. 149 p. 1.

VIII. The Subcontractors’ Litigation

In September 2003, ADPM submitted to Noresco an application for payment of $690,374 related to work performed on the Project, App. 18, Ex. 133 p. 1. The payment application was not accepted nor paid by Noresco. Trial Tr. vol. I, 72:10-14, Ex. 135 p. 1. ADPM then submitted two additional payment applications for October and November 2003, for which Noresco also declined payment. Ex. 133 pp. 4-6. On December 9, 2003, McNaught submitted revised summary payment applications for September, October, and November 2003, now totaling $1,449,223. Ex. 37 p. 2. McNaught followed up with a letter to Carleton on December 12, 2003, expressing his concern that “the Subcontractors are chasing ADP Marshall for open Change Orders, which have not been approved and are not billable, and it makes it more difficult to fend them off if we are not paying them for billable items as well.” Ex. 135 p. 1.

A December 15, 2003 letter from McNaught to Carleton again requested payment of $1,449,223 for the months of September, October, and November 2003. In the letter, McNaught urged that “it is imperative Noresco provide these funds no later than Wednesday, December 17th, in order to assure we are able to fund our Subcontractors.” Ex. 37 p. 1. According to McNaught, the Subcontractors “were more difficult to deal with” if ADPM did not pay them, and McNaught was concerned that ADPM would not be able to issue checks so close to year’s end. Trial Tr. vol. I, 68:8-69:1.

On December 18, 2003, McNaught submitted a “Deviation Status Report” to Noresco, summarizing all the currently open change orders. ADPM now claimed that $1,812,098 were outstanding, including $329,362 for early construction delay and $123,060 for Asbestos Abatement “due to Vortex Report Issues.” Ex. 113 pp. 2-3.

While ADPM made such increasing requests for payment to Noresco, ADPM refrained from paying its Subcontractors, relying on the pay-when-paid clause in the Subcontracts. At the time of McNaught’s December 18, 2003 letter, ADPM was a month and a half late paying the Subcontractors for September 2003. Trial Tr. vol. I, 68:25-69:11.

Previously, during the course of construction, Subcontractors had repeatedly requested relief from the pay-when-paid provisions in the Subcontracts. McNaught received permission from his Project Director to pay some of the Subcontractors immediately, particularly those whose work at the Project had been completed. Trial Tr. vol. II, 92:25-93:14. ADPM, in turn, had appealed to Noresco for relief from the Milestone payment provision in the Agreement, and Noresco allowed ADPM to make partial billings against the Milestones after only a percentage of the work was completed. Id. at 96:21-97:8. Nevertheless, with respect to Subcontractors who were still working on the Project and who were now owed considerable sums of money, ADPM was unable to fund their payments out of pocket. Id. at 93:15-94:1.

As McNaught conceded, ADPM’s problems over paying its Subcontractors stemmed, at least in part, from the inconsistency of the payment provisions in the Agreement and the Subcontracts. Trial Tr. vol. II, 99:7-100:23. Although Article 2.1 of the Agreement required the Subcontracts to be consistent with the Agreement, the Subcontracts provided a pay-when-paid clause instead of a Milestone schedule, which resulted in Subcontractors not being paid for completed work if Noresco declined payment applications submitted by ADPM. Id.

On December 31, 2003, Noresco served ADPM with a “Notice to Cure Default for Non-Payment of Subcontractor,” demanding that ADPM satisfy a claim for compensation made by Atlantic Contracting & Specialties, LLC (“AC & S”) for work performed on behalf of ADPM’s Subcontractor Arden Engineering (“Arden”). Noresco stated that, if ADPM failed to cure the default, Noresco would either withhold money from ADPM’s next payment or make demand on ADPM’s payment bond issued by the Co-Sureties. Ex. 440. After Noresco served a second notice to that effect, see Ex. 640, ADPM responded that it was Noresco that was in default of its payment obligations under the Agreement. Ex. 645. ADPM stated that Noresco’s failure to make timely payments to ADPM was “at the root” of AC & S’s claim and that “any further withholding of funds by Noresco will only result in additional claims from subcontractors and vendors who do not get paid.” Ex. 645.

Beginning in March 2004, Subcontractors began filing bond claims in Rhode Island state court against ADPM, Noresco, Lumbermens, and/or the Co-Sureties for non-payment of labor and materials provided to the Project. SUF 56-58; see certified copies of civil docket sheets, Exhibits 223-230, see certified copies of Complaints, Exhibits 231, 233, 236, 238, 240, 242, 244, 246. In their defense, ADPM and its Co-Sureties relied on the pay-when-paid clauses in the Subcontracts. SUF 61. ADPM also filed cross-claims against Noresco and Lumbermens in most of the Subcontractor claims. SUF 59.

On April 6, 2005, the Rhode Island Superior Court issued a decision in one of the bond claims related to the Project, HydroChem Indust. Serv., Inc. v. Lumbermens Mut. Cas. Co., et al., PC 2004-1992 (R.I.Super. April 6, 2005), Ex. 235. HydroChem, which had been hired through ADPM’s Subcontractor Arden, sought payment of $35, 651 pursuant to a purchase order issued by Arden for the “pre-operational degreasing of the boilers” that HydroChem had performed. HydroChem Transcript of Decision at 2, Ex. 235. The state court decision notes that ADPM and its Co-Sureties agreed to cooperate in the prosecution of HydroChem’s claim on Lumbermens’ bond “ ‘because Noresco has never paid [ADPM] for the services provided by [HydroChem].’ ” HydroChem Tr. 4, Ex. 235.

In response to HydroChem’s motion for summary judgment, Lumbermens suggested that Noresco was not required to pay HydroChem because the degreasing procedure provided by HydroChem was different from the “boil-out” required under the Agreement. The court rejected Lumbermens’ argument and pointed out that Rhode Island law does not require acceptance of a plaintiffs labor or material to entitle the plaintiff to payment for completed work under a bond claim. Hydro-Chem 11, citing R.I. Gen. Laws § 34-28-30. The court held that, because Hydro-Chem established that Lumbermens issued a bond to secure payment for work performed on the Project, and HydroChem had performed and completed the work requested by Arden, HydroChem was entitled to summary judgment on its timely filed bond claim. HydroChem 9-11.

Following the HydroChem decision, and anticipating a similar outcome in the other Subcontractor claims, Noresco settled the remaining cases and paid a total amount of $840,000 in settlement of all their claims. SUF 78-81. (With the exception of one of these Subcontractor claims, ADPM agrees that the amounts expended by Noresco to pay the claims were reasonable. ADPM suggests that Noresco’s payment of $120,677.11 to R.P. Iannuccillo & Sons Construction Company (“Iannuccillo”) resulted in overpayment because the amount due to the Subcontractor was only $88,874. Trial Tr. vol. VIII, 55:3-56:2, Sept. 30, 2009.

Based on the forum selection clause in the Agreement, which expressly requires litigation in this Court, ADPM’s and the Co-Sureties’ cross-claims in the Subcontractor litigations were dismissed by the state court on October 2, 2006. Noresco’s counterclaims against ADPM and its Co-Sureties remain pending in state court.

ANALYSIS

This is a diversity case pursuant to 28 U.S.C. 1332, in which the Court must apply the choice of law rules of the forum state, i.e. Rhode Island. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). The Agreement at issue, which was negotiated, executed, and intended to be performed in Rhode Island, provides that it “shall be governed by and interpreted under the laws of the State of Rhode Island.” Ex. 14 p. 53, Sec. 18.8. Consequently, this Court will apply Rhode Island law in this case.

I. Breach of Contract

For all the complexities of the parties’ arguments and the overwhelming amount of trial evidence, this is essentially a breach of contract case between the general contractor of a large construction project and its primary subcontractor. In order to prevail in a breach of contract claim, the plaintiff has the burden to prove, by a preponderance of the evidence, that it has complied with the contract’s provisions and that the defendant has failed to perform its own obligations. Del-Farno v. Aetna Cas. & Sur. Co., 673 A.2d 71, 72 (R.I.1996).

As established by the parties’ jointly submitted undisputed facts, the Agreement constitutes a valid contract that governs the obligations of the parties. SUF 17 through 22. See Rhode Island Five v. Med. Assoc. of Bristol, 668 A.2d 1250, 1254 (R.I.1996) (“The long-recognized essential elements of a contract are ‘competent parties, subject matter, a legal consideration, mutuality of agreement, and mutuality of obligation.’ ”) (citation omitted). Consequently, the determination this Court must undertake is whether the parties have performed their respective obligations under the terms of the Agreement or whether the conduct of either party constitutes a breach of the Agreement and whether damages are to be awarded accordingly. Women’s Dev. Corp. v. City of Central Falls, 764 A.2d 151, 158 (R.I.2001) (Factfinder in breach of contract case to determine whether party “has substantially performed or materially breached its contractual obligations.”)

In addition, it falls to this Court to ascertain whether any of the Agreement’s provisions or terms are ambiguous, and to interpret such terms as necessary for the resolution of the parties’ claims. Clark-Fitzpatrick, Inc./Franki Foundation v. Gill, 652 A.2d 440, 443 (R.I.1994) (“Contract interpretation is a question of law; it is only when contract terms are ambiguous that construction of terms becomes a question of fact”). A contract is “viewed in its entirety and the words used in the contract are given their ordinary meaning.” Sturbridge Home Builders, Inc. v. Downing Seaport, Inc., 890 A.2d 58, 62-63 (R.I.2005).

The Court’s main objective when construing contract terms is to “ascertain the parties’ intent.” The Elena Carcieri Trust—1988 v. Enterprise Rent-A-Car, 871 A.2d 944, 947 (R.I.2005). If the language of a written contract clearly divulges the intention of the parties, “the words of the contract are assigned their plain and ordinary meaning.” Id. To the extent a contract contains an ambiguity, the Court may consider “the construction placed upon the terms by the parties” and “the circumstances surrounding the execution of the contract.” Johnson v. Western Nat. Life Ins. Co., 641 A.2d 47, 48 (R.I.1994).

The Agreement between Noresco and ADPM incorporates, by reference, the Prime Contract and its Exhibits and, particularly, Exhibit I. Ex. 14 pp. 52-53, Art. 18.7, Art. 18.11. A reference in a subcontract to the main contract, “made for a particular purpose, makes it part of the subcontract only for the purpose specified.” A.F. Lusi Constr., Inc. v. Peerless Ins. Co., 847 A.2d 254, 261 (R.I.2004) (citing Guerini Stone Co. v. P.J. Carlin Constr. Co., 240 U.S. 264, 277, 36 S.Ct. 300, 60 L.Ed. 636 (1916)). The Agreement defines “Technical-Specification” as “the information, engineering data, drawings and conditions, including civil, electrical and mechanical specifications describing the Work, set forth in Attachment I, and in this Agreement.” Ex. 14 p. 14, Art. 1.50. The technical specifications are listed in Attachment I to the Agreement, which states that Exhibit I was “[previously provided to [ADPM],” and set “the project scope of supply and the systems for the project.” Ex. 14 p. 57, Attachment I. Accordingly, this Court holds that the incorporation by reference of Exhibit I serves to set the scope and quality of performance of ADPM’s work under the Agreement.

The second determination by this Court regarding the Agreement relates to the Agreement’s merger provision. Pursuant to Article 18.7, the Agreement, including all the attachments thereto, “represents the entire understanding of Noresco and [ADPM] ... No prior oral or written understanding shall be of any force or effect with respect to any matter covered hereunder.” Ex. 14 pp. 52-53.

It is well established that “a complete written agreement merges and integrates all the pertinent negotiations made prior to or at the time of execution of the contract.” Fram Corp. v. Davis, 121 R.I. 583, 401 A.2d 1269, 1272 (1979). Once the parties in this case adopted the writing as their “entire understanding,” the Agreement became integrated. Golden Gate Corp. v. Barrington College, 98 R.I. 35, 199 A.2d 586, 590 (1964) (Integrated agreement is “one where the parties thereto adopt a writing or writings as the final and complete expression of the agreement”)(quoting Restatement (First) of Contracts § 228, p. 307). Any other oral or written expressions “that occurred prior to or concurrent with the integrated agreement, are not viable terms of the agreement.” Filippi v. Filippi, 818 A.2d 608, 618 (R.I.2003).

The merger clause of the Agreement clearly expresses the intent of both parties to be bound by terms contained therein, including the fixed price. Whatever understanding ADPM had prior to entering the Agreement, and regardless of the content of negotiations between the parties and their performance under the Purchase Orders, barring any written amendments executed by the parties, the integrated Agreement is the sole document that governs the performance of these parties.

II. The Parties’ Claims

ADPM asserts that it has substantially fulfilled the terms of the Agreement and is entitled to payment of the full contract price, as well as additional compensation for change order work. Complaint ¶¶ 13-19. ADPM has also raised claims of unjust enrichment and quantum meruit. In defense, Noresco asserts that ADPM cannot recover for (1) delay damages that arose prior to the execution of the Agreement, (2) any work ADPM performed that was already covered and compensated under the terms of the Agreement, and (3) work performed by ADPM’s subcontractors that was ultimately paid for by Noresco. In its counterclaim, Noresco seeks specific performance from ADPM, including the delivery by ADPM of “as-built” drawings. Amended Counterclaim ¶¶ 32-38. Noresco also seeks liquidated damages under the Agreement for a four month delay with respect to the April 30, 2003 deadline for Readiness for Testing. Id. ¶ ll.k. Both parties have requested reasonable attorney’s fees pursuant to R.I. Gen. Laws § 9-1-45.

III. The Change Order Process

Generally, the disagreements between Noresco and ADPM require discrete determinations of which party was responsible, under the Agreement, to perform certain work or to furnish certain materials or equipment. ADPM’s claims are primarily based on the contention that Noresco failed to pay ADPM the agreed upon contract price or compensate it for work that ADPM deemed outside of its contractual obligations. ADPM asserts that such work was not covered by the Agreement’s fixed price or that it resulted from additional requests or material changes to ADPM’s scope of work. ADPM’s related demands for additional payment are documented by numerous change order requests (“CORs”) which ADPM submitted to Noresco over the course of the Project.

Because the design drawings made available to ADPM were only 75% complete at the commencement of the Project, not every detail of the Facility was apparent. In addition, as the Project developed, amendments were made to the design drawings, e.g. to overcome difficulties in implementing the specifics of the design; to adhere to the obligations under the Prime Contract; to comply with Rhode Island code regulations; or to accommodate certain equipment that was differently sized than anticipated.

If modifications in the construction process became necessary, Noresco informed ADPM accordingly, and ADPM directed the appropriate Subcontractor to perform the work and/or to provide additional materials. Trial Tr. vol. II, 21:12-22:7. If the work was not specifically included in the scope of the applicable Subcontract, the Subcontractor requested additional payment, which ADPM passed on to Noresco as a COR, referencing a specific deviation number. It was standard practice for the COR to include the actual charge for the work done by the applicable Subcontractor, as well as a general conditions charge and a liability insurance charge, plus ADPM’s fee for work performed under the Agreement. See, e.g. Ex. 364 p. 1, Trial Tr. vol. II, 113:15-114:13.

If Noresco determined that the work was outside of ADPM’s scope of work under the Agreement because it constituted a material change from the design, see Ex. 14, Art. 1.60, Noresco approved the COR and ADPM received additional payment, a portion of which it passed down to the Subcontractor. If Noresco determined that the work was already included in ADPM’s scope of work or that the necessary material or equipment was required to be provided by ADPM under the fixed-price Agreement, the COR would be disallowed. Pursuant to Article 7.5 of the Agreement, Noresco was required to provide a notice of acceptance or rejection within fifteen days after receipt of a COR. Ex. 14 p. 36, Art. 7.5. In the event the parties disagreed about the COR, either party was entitled to submit the matter to dispute resolution. Id.

IV. Testimony by Wade Carleton

Noresco’s Vice President of Construction systematically described the process of assessing whether CORs submitted by ADPM reflected work that fell within or outside of its contractual obligations. Carleton testified regarding his reasons for accepting or rejecting approximately three dozen CORs. To determine whether a particular COR reflected work included in ADPM’s scope of work, Carleton conducted a review of the Agreement, the Exhibit I documents, and the 75% complete drawings, including subsequent amendments to such drawings. Trial Tr. vol. IV, 133:20-135:12, Sept. 24, 2009.

Generally, Carleton rejected any CORs for work related to the asbestos abatement work because he determined that ADPM was responsible for abatement of all asbestos contained in the active area of the Facility and was not limited to the presence of asbestos as described in the Vortex Report. Trial Tr. vol. IV, 135:13-136:16, Exhibits 381, 338, 339, 353, 384 (Deviation Nos. 490, 32, 37, 247, 501, respectively). In a February 5, 2003 letter to then ADPM construction manager Salamon, Carleton explained his reasons for denying asbestos abatement CORs by stating that “ADPM has requested change orders for work that Noresco believes is clearly part of the base bid scope of supply.” Ex. 413. In support of Noresco’s position, the letter includes references to those sections in Exhibit I which specifically address asbestos abatement. Ex. 413, Ex. 2.

Another series of CORs rejected by Carleton was related to the early construction delay resulting from the waterline relocation. See, e.g. Exhibits 347, 374, 393, 360, 372, 372, 388 (Deviation Nos. 161, 465, 551, 378, 461, and 536, respectively). Because the submitted CORs were based on events that occurred prior to the Agreement and that were not specifically addressed at the time the Agreement was negotiated and executed, Carleton rejected ADPM’s claims. Trial Tr. vol. IV, 143:17-144:7. Carleton pointed out that Noresco was never provided with a schedule analysis regarding responsibility for the early construction delay. Id. at 144:14-20.

Carleton also rejected ADPM’s request for “general conditions for staffing and expenses,” which ADPM claimed to have incurred beyond August 2003, because it related to the early construction delay. Ex. 374 (Dev. 465), Trial Tr. vol. IV, 145:5-18. For the same reason, and because Article 8.3 of the Agreement required ADPM’s provision of builder’s risk insurance through substantial completion of the Facility, Carleton rejected ADPM’s request for extension of such coverage. Ex. 388.

Carleton further rejected ADPM’s CORs related to lowering the roofline of the prefabricated metal building that ADPM was required to provide under the Agreement. Ex. 341, Ex. 14 p. 122, Ex. 2 pp. 203, 205, 208. In rejecting these CORs, Carleton took the position that ADPM was aware of the height of the equipment to be installed in the prefabricated building and that any required field modification was ADPM’s responsibility. Trial Tr. vol. V, 26:22-32:7.

In a similar vein, Carleton rejected CORs for other work he deemed to be included in ADPM’s scope of work or that ADPM was otherwise responsible for under the Agreement, as well as items that were required for Rhode Island code compliance. see e.g. Exhibits AA, 357, 341, 349, 355, 356, 343, 375, 348, 351, 373, 386, 382, 344, 350, 366, 378 (Deviation Nos. 349, 81, 191, 273, 3326, 106, 468, 173, 227, 462, 530, 499, 147, 201, 420, and 482, respectively).

A number of CORs were rejected by Carleton for insufficient or inconsistent backup documentation that was not provided even after it had been requested by Noresco. See, e.g., Exhibits 340, 359, 365, 387, 363, 380 (Deviation Nos. 44, 361, 407, 532, 398, and 496, respectively). Carleton also rejected a COR for reimbursement for a pricing and activity proposal which Noresco and ADPM jointly provided to the State. Trial Tr. vol. V, 71:12-72:12, Ex. 367 (Deviation No. 422).

Finally, Carleton rejected several CORs submitted for additional funds to insulate Noresco provided equipment. See, e.g. Exhibits 358, 371, 377, 379, 357 (Deviations 351, 461, 474, 483, 349, respectively). Pursuant to Article 1.44 of the Agreement, Noresco was responsible to provide the equipment as described by the shop drawings in Attachment XIX, and ADPM was responsible for installing and starting up the equipment. Trial Tr. vol. V, 8:2-14:3, Ex. 14 p. 13. Although Noresco was required to supply the HRSGs and other equipment, a review of the construction drawings, the vendor manuals, and the trim/materials lists informed ADPM that certain equipment would be provided without insulation. Such insulation was necessary, however, due to the high temperatures to which the components or equipment would be exposed. Trial Tr. vol. V, 14:3-13:24, Ex. 627, Ex. RR.

V. Expert Testimony by Bradford Bright

The majority of the eight-day bench trial was spent in separately reviewing more than 65 CORs, together with the applicable background information and the various provisions of the Agreement which relate to the work details at issue. The Court declines to engage in a similar exercise in this Decision and Order. Instead, the Court will proceed to address the alleged discrepancies between ADPM’s contractual scope of work and the work for which ADPM claims additional compensation by applying the COR categories developed by Noresco’s expert witness Bradford Bright, whose testimony the Court found to be relevant, coherent, and elucidating.

Bright, who has spent almost 30 years in the construction industry, including two years as a field engineer on two separate power plant projects, was retained by Noresco to (1) analyze ADPM’s claims related to construction delays; (2) analyze deviations submitted by ADPM for work ADPM considered outside of its scope; (3) review Noresco’s claims for payment to Subcontractors for work it considered within ADPM’s scope; (4) determine the reasonableness of Noresco’s settlement payments to Subcontractors; (5) review CORs and allowance items; (6) compute liquidated damages; and (7) analyze the punch list to determine whether ADPM was responsible for unfinished items. Trial Tr. vol. VII, 65:24-67-1; Ex. WW.

In order to conduct his analyses, Bright reviewed (1) the relevant provisions in the Agreement; (2) the technical specifications of Exhibit I; (3) the vendor packages for Noresco supplied equipment; (4) the Subcontracts; (5) the 75% complete construction drawings and subsequent versions thereof; (6) and various Project records supplied to him by Noresco and ADPM. Trial Tr. vol. VII, 67:6-68:20.

Bright organized the various deviations submitted by ADPM to Noresco into six distinct categories: (1) deviations related to Noresco supplied equipment; (2) deviations resulting from the asbestos remediation and related re-insulation of abated areas; (3) deviations for work on pumps, tanks, and associated utilities; (4) a single deviation for flex connectors; (5) deviations related to the pre-engineered metal building provided by ADPM; and (6) deviations related to electrical work. Trial Tr. vol. VII, 80:23-82:14. Bright explained that he grouped the ADPM submitted deviations in their respective groups because the deviations tended to be described by referring to the same provisions in the Agreement or to other related documents. Trial Tr. vol. VII, 82:15-25. A summary of the analyses regarding the various categories was provided as part of Bright’s expert report. Ex. YY.

The first category, related to Noresco Supplied Equipment, includes deviations set forth in exhibits 357, 358, 371, 377, and 379 (Deviations Nos. 349, 351, 445, 474, and 483, respectively). Trial Tr. vol. VII, 81:8-9. Article 1.60 of the Agreement defines the work ADPM was required to perform, and the description of duct work insulation is contained in Exhibit I. Id. at 86:1-8, Ex. 14 p. 15, Ex. 2 p. 79. In addition, the manufacturer of the Noresco supplied boiler provided a “trim list” that was furnished to ADPM, together with other manuals and documentation. Trial Tr. vol. VII, 86:9-15, Ex. QQ.

Generally, vendor supplied trim lists and drawings specify which of their components are delivered with factory installed insulation. If a certain component is delivered uninsulated but, based on its function, requires insulation, the party responsible for the installation of that component was responsible to insulate it. Trial Tr. vol. VII, 88:15-89:12. At the time it entered the Agreement, ADPM had been provided with all the vendor manuals, trim lists, construction drawings and other items necessary to determine whether a particular component to be installed by ADPM would be delivered insulated or not. Id. at 89:18-90:9. Attachment II to the Agreement specifically referred ADPM to “shop-drawings describing the Noresco supplied equipment” provided as Attachment XIX. Ex. 14 p. 63.

Pursuant to Item D.8 of Exhibit I to the Agreement, the scope of work includes to “[f]urnish and install thermal insulation on equipment, piping, and ductwork.” Ex. 2 p. 79. Each of the deviations submitted by ADPM in the Noresco supplied equipment category relates to components that had to be installed by ADPM. Although those components were delivered without factory installed insulation, them intended function rendered insulation necessary. Accordingly, under the terms of the Agreement, ADPM was required to insulate the components before installing them. Ex. YY p. 2. Because the work described in this series of deviations was included in ADPM’s scope of work under the Agreement, ADPM is not entitled to additional payments for such work.

The second category, related to asbestos abatement work, includes Exhibits 338, 339, 352, 353, 381, and 384 (Deviations Nos. 32, 37, 246, 247, 498, and 501, respectively). Exhibit I to the Agreement requires that “[t]he Active Areas of the Facility shall have all asbestos removed.” Trial Tr. vol. VII, 93:1-94:4, Ex. 2 p. 15., Section 28.1. (Emphasis added). Exhibit I also provides for the delineation of the Facility into “active” and “inactive” areas and for rehabilitation of the “active” area to include “[rjemediation of all asbestos containing materials. Reinstallation of all piping, ducts and vessels to be retained.” Ex. 2 pp. 5, 72, Section 5. (Emphasis added). The Exclusions and Clarifications provision, included by ADPM in the Agreement as Attachment XX, only excluded asbestos abatement outside of the area to remain active. Trial Tr. vol. VII, 94:5-95:6, Ex. 14 p. 121. In other words, the Agreement required that ADPM undertake asbestos abatement work of all active areas of the Facility. Consequently, and notwithstanding ADPM’s stated reliance on the Vortex Report, Noresco rightfully rejected ADPM’s related CORs.

Category 3, referred to by Bright as “pads, pumps, and tanks,” includes Exhibits 364, 348, 359, 365, and 387 (Deviation Nos. 400, 173, 361, 407, and 532, respectively). These deviations primarily relate to the size and orientation of certain concrete “housekeeping” pads, on which equipment had to be installed. Trial Tr. vol. VII, 99:14-100:2. Pursuant to Section 1.09 A 2 in Exhibit I, ADPM was required to “[m]ount equipment and panels on concrete housekeeping pads.” Ex. 2 p. 82. ADPM’s Subcontractor Arden performed mechanical work related to the pads; Massachusetts Electric provided electrical work; and Iannuccillo poured the concrete pads. Trial Tr. vol. VII, 100:3-14. Bright concluded that all work detailed in the deviations were ADPM’s responsibility, primarily based on the depiction of the pads on the 75% complete construction drawings. Id. at 101:1-104:3, Ex. 123, p. M510. The drawings only show the pads’ general location and arrangement, but the actual configuration and orientation of such pads were not finalized until the particular equipment to be installed was identified. Trial Tr. vol. VII, 104:12-108:15.

As explained by Bright, a contractor working with a 75% complete drawing that shows only a general configuration of such pads is expected to anticipate where suitable placement of the pads will eventually occur. Id. at 106:10-22. By example, the 75% complete drawings show a group of four concrete pads for the installation of four separate tanks. Ex. 123 p. M510. However, as depicted on the backup information attached to Deviation 400, eventually a single concrete pad was installed to accommodate placement of five tanks. Ex. 364 p. 34. To the extent the pads were not actually installed and then removed and relocated, ADPM’s work did not constitute a material change in work. Moreover, the installation of only one larger pad instead of a configuration of four such pads actually resulted in less work. Trial Tr. vol. VII, 106:16-107:10. As long as the pad was placed in the same general location as originally depicted, neither the mechanical nor the electrical services attached to the equipment would have been affected. Id. Because ADPM was required to provide equipment pads for certain equipment, and because the work performed did not reflect a material change from the original 75% plan, the deviations related to the housekeeping pads were rightfully rejected by Noresco. Id. at 104:4-108:15.

The fourth category includes only one deviation related to flexible retrofit connectors on the soft water pumps. Trial Tr. vol. VII, 109:22-110:8, Ex. 375 (Deviation No. 468). Se