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ENVIRONMENTAL UTILS. CORP. v. LANCASTER AREA SEWER

July 7, 1978

ENVIRONMENTAL UTILITIES CORP.
v.
LANCASTER AREA SEWER AUTHORITY



The opinion of the court was delivered by: TROUTMAN

 TROUTMAN, District Judge.

 This is an action for alleged breach of construction contracts, in which plaintiff cites six grounds for recovery of damages. Three deal with claims for balances due on the three separate construction contracts. The other three deal with claims for "additional and extra work" and/or "change order work" resulting from work performed on each of the three contracts. Defendant moves for partial summary judgment as to the second set of claims mentioned above.

 Defendant is a municipal authority which developed, in the late 1960's, a plan for an extensive and interconnected sewer system throughout the various townships and boroughs in the Lancaster area. Huth Engineers, Inc. (Huth) was retained to prepare the plans and specifications for the project and to supervise its construction. Huth divided the system into several distinct parts for each of which a separate contract was awarded and executed. Plaintiff was first awarded Contract 10, in the area of the Borough of Mountville. Four months after plaintiff commenced working on this project, Samuel Berlanti, a Vice President of plaintiff, took charge of it. He also prepared bids on Contracts 20 and 21, in the area of West Hempfield Township, while plaintiff was performing the work on Contract 10.

 The terms of the three contracts are identical in most material respects, especially in the areas designated as Information for Bidders, Technical Provisions (Standard) and Technical Provisions (Detailed). The contracts also consisted of two major parts: the plans and the specifications. The specifications provided for payment on a unit price basis, in which the total contract price would depend on the amount of work performed by the contractor. Thus, the contractor was to be paid by the linear foot for the installation of pipe, by the cubic yard for the installation of backfill and by the square yard for the replacement of paving. Furthermore, in the last two categories there were constraints known as "pay widths" which limited the amount of backfill replaced and the amount of paving replaced to certain pay widths. Thus, when eight inch pipe was laid, the backfill pay width was limited to two feet, the paving restoration of non-state highways was limited to thirty-eight inches and the restoration of pavement of state highways was limited to forty-eight inches.

 The specifications in the contracts also provided that if extra work became necessary a prescribed procedure was to be followed. Thus, for example, Section 17 of the Supplemental General Conditions of the Specifications of Contract 10 reads in pertinent part as follows:

 
"Without invalidating the contract, the Owner may order extra work or make changes by altering, adding to or deducting from the work, the contract sum being adjusted accordingly. All the work of the kind bid upon shall be paid for at the price stipulated in the proposal, and no claims for any extra work or materials shall be allowed unless the work is ordered in writing by the Owner or its Engineer, acting officially for the Owner, and the price is stated in such order."

 Section 22 of the General Conditions of the Specifications of Contract 10 reads as follows:

 
"22. Claims for Extra Cost
 
No claim for extra work or cost shall be allowed unless the same was done in pursuance of a written order of the Architect/Engineer approved by the Owner, as aforesaid, and the claim presented with the first estimate after the change or extra work is done. When work is performed under the terms of sub-paragraph 17(c) of the General Conditions, the Contractor shall furnish satisfactory bills, pay-rolls and vouchers covering all items of cost and when requested by the Owner, give the Owner access to accounts relating thereto."

 There are also a series of provisions in the Standard General Conditions of Contracts 20 and 21 which are identical to those in Contract 10 and which read as follows:

 
"ARTICLE 10 - CHANGES IN THE WORK
 
10.1 Without invalidating the Agreement, the OWNER may, at any time or from time to time, order additions, deletions or revisions in the Work; these will be authorized by Change Orders. Upon receipt of a Change Order, the CONTRACTOR will proceed with the Work involved. All such Work shall be executed under the applicable conditions of the Contract Documents. If any Change Order causes an increase or decrease in the Contract Price or an extension or shortening of the Contract Time, an equitable adjustment will be made as provided in Article 12."
 
"ARTICLE 1 - DEFINITIONS
 
Wherever used in these General Conditions or in the other Contract Documents, the following terms shall have the meanings indicated which shall be applicable to both the singular and plural thereof:
 
* * *
 
Change Order - A written order to the CONTRACTOR signed by the OWNER authorizing an addition, deletion or revision in the Work, or an adjustment in the Contract Price or the Contract Time issued after execution of the Agreement.
 
* * *
 
"ARTICLE 11 - CHANGE OF CONTRACT PRICE
 
11.1 The Contract Price constitutes the total compensation payable to the CONTRACTOR for performing the Work. All duties, responsibilities and obligations assigned to or undertaken by the CONTRACTOR shall be at his expense without change in the Contract Price.
 
11.2 The Contract Price may only be changed by a Change Order. Any claim for an increase in the Contract Price, shall be in writing delivered to the OWNER and the ENGINEER within 15 days of the occurrence of the event giving rise to the claim. All claims for adjustments in the Contract Price shall be determined by the ENGINEER if the OWNER and CONTRACTOR cannot otherwise agree on the amount involved. Any change in the Contract Price resulting from any such claim shall be incorporated in a Change Order.
 
* * *"

 In addition to this language regarding alteration of work and payment therefor, there is language regarding the conditions of the work sites. The language of all three contracts is contained in the "Information for ...


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