Appeal from the Order of the Board of Claims in case of John M. Lastooka, t/d/b/a Ram Construction Company v. Commonwealth of Pennsylvania, Department of Transportation, No. 582.
George D. Wenick, Assistant Attorney General, with him Paul A. Logan, Assistant Attorney General, Ward T. Williams, Chief Counsel, and Harvey Bartle, III, Acting Attorney General, for petitioner.
Richard B. Tucker, III, with him Anthony P. Picadio, Tucker, Arensberg, Very & Ferguson, for respondent.
President Judge Crumlish and Judges Rogers and Blatt, sitting as a panel of three. Opinion by Judge Rogers.
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The Commonwealth's Department of Transportation has appealed from a judgment entered against it by the Board of Claims in favor of John Lastooka, trading as Ram Construction Company, in the total amount of $106,942.05 for work performed by Lastooka additional to the work called for in the formal contract between the parties under which Lastooka agreed to construct Section 2 of a railway spur connecting a new Volkswagen automobile assembly plant at New Stanton, Westmoreland County, with the main line of the Chessie Railroad system. The Department publicly advertised the Section 2 work for competitive bidding on October 15 and 22, 1976, and proposals were required to be submitted on November 5, 1976. The work was contracted to Lastooka on November 15, 1976, at his bid of $2,356,773.95 based on unit prices for quantities of work and materials estimated by the Department of Transportation to be necessary.
The work for Section 2 consisted of the construction of about five miles of railway spur, included in
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which were a cut, an embankment and a bridge which would carry the railway over a public road. The contract was in the usual form furnished and required by the Department of Transportation and contained the usual exculpatory clauses, including the standard covenant required of the contractor that he had been given sufficient time and opportunity to make subsoil examinations.*fn1 The familiar Form 408 Specifications were incorporated by reference.
Swift, if not hurried, prosecution of the work was required as evidenced by a supplement to Form 408 Specifications, Section 108.07, Liquidated Damages,
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by which the Commonwealth informed Lastooka that the Commonwealth had represented to Volkswagen that the railway would be open to traffic by September 30, 1977. The same provision imposed liability on Lastooka to indemnify the Commonwealth for any damages it might be required to pay Volkswagen resulting from delay in finishing the work and also for the payment to the Commonwealth of the amount of tax revenues from Volkswagen which the Commonwealth should lose for the same cause -- both in addition to the Liquidated Damages called for in the contract. Further, the liquidated damages for failure to complete were fixed in at $15,000 a day, in contrast to the $300 a day provided by the unsupplemented version of Section 108.07 for contracts exceeding $2,000,000. The contract also required that all suitable materials obtained by excavation for the cut should be used in constructing the embankment.
Lastooka finished the contract work for Section 2 by May 11, 1977. However, in June, 1977, parts of the embankment failed and in the summer of 1977 movement was discovered in the railway bridge. On demand of the Department of Transportation, Lastooka corrected these conditions at a cost, he claimed, of $112,201.32 for repairing the embankment and $8,984.65 for repairing the bridge. These two items plus a claim for $35,416.80 for additional borrow constituted his total claim for $156,602.77 filed with the Board of Claims. The Board of Claims entered judgment for Lastooka in the amount of $87,916.84 for the repairs to ...