Central Penn Industries, Inc. v. Commonwealth

358 A.2d 445, 25 Pa. Commw. 25, 1976 Pa. Commw. LEXIS 1061
CourtCommonwealth Court of Pennsylvania
DecidedJune 2, 1976
DocketAppeal, Nos. 1450 and 1461 C.D. 1975
StatusPublished
Cited by9 cases

This text of 358 A.2d 445 (Central Penn Industries, Inc. v. Commonwealth) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Penn Industries, Inc. v. Commonwealth, 358 A.2d 445, 25 Pa. Commw. 25, 1976 Pa. Commw. LEXIS 1061 (Pa. Ct. App. 1976).

Opinions

Opinion by

Judge Rogers,

Central Penn Industries, Inc. (hereinafter referred to as Central) under its former name, Central Pennsylvania Quarry, Stripping and Construction Co., entered into a contract with the Commonwealth of Pennsylvania, acting by its Department of Transportation1 (PennDOT), for the construction by Central of seven miles of a separated highway known as 1-84. The project was advertised for bidding on March 11, 1966 and for letting on April 15, 1966. Central’s bid of $4,013,528.58 was the low bid. The contract was duly awarded to Central which commenced the work on May 9, 1966 and completed it in December of 1968.

The contract was let and bids received on the unit price basis for many items of the work. After the work was completed the Department issued its Notification of Amount of Final Payment showing the total amount due Central to be $3,886,710.93, an amount arrived at by computation of the amount of work actually done with respect to unit price items. Central objected to the Department’s computations of the amount of money due with respect to two unit price items — (1) Class 1 excavation and (2) borrow excavation.

The parties were unable to resolve their differences over the disputed items and Central filed a complaint with the Board of Arbitration of Claims. The Board denied Central any recovery for its claim based upon Class 1 excavation, but awarded Central the amount of $231,240 on its claim with respect to borrow excavation. The Commonwealth has appealed from the action of the Board allowing Central’s claim for the borrow excavation, and Central has appealed from the Board’s action denying its claim with respect to Class 1 excavation. We have concluded that the Board correctly denied Central’s claim for additional compen[28]*28sation for Class 1 excavation and that it erred in awarding Central additional compensation for borrow excavation.

Central’s Appeal

PennDOT provided bidders with a Soils Profile, which included a Seismic Survey, purporting to show the hardness and elevation of rock. In doing the work Central encountered the top of rock at elevations higher than those indicated on the Soils Profile. This condition required Central to excavate about 500,000 cubic yards of rock in excess of the amount of rock the Soils Profile provided by PennDOT indicated would be present. This unanticipated work, Central says, caused its cost per cubic yard of Class 1 excavation to be 99.2 cents, 9.2 cents more than its bid price of 90 cents. Central’s claim was for $249,026.24, the product of multiplying the total of 2,706,807 cubic yards of payable Class 1 excavation times 9.2 cents. ■

The contract contains the following familiar exculpatory language:

“The contractor further covenants and warrants that he has had sufficient time to examine the site of the work; that he has examined the site of the work; that he has had sufficient time to examine the site of the work to determine the character of the subsurface material and conditions to be encountered; that he is fully aware and knows of the character of the subsurface material and conditions to be encountered; and that he has based the within contract prices on his own independent examination and investigation of the site, subsurface materials, and conditions and has not relied on any subsurface information furnished to him by the Commonwealth of Pennsylvania, Department of Highways.”

Central adduced evidence tending to show that the site location in Pike County was woody and not easily accessible and that it was, therefore, impossible to [29]*29make an independent examination of subsoil conditions during the less than one month period between the time it received the bidding documents and the date required for the submission of bids. In fact, Central made no subsoil investigation.

Central bases its case on Pennsylvania Turnpike Commission v. Smith, 350 Pa. 355, 39 A.2d 139 (1944), where it was held that the provision by the Turnpike Commission of inadequate time for investigation and of subsoil information combined with the failure of the Commission to provide subsoil information in its possession showing rock conditions to be different and less favorable for easy excavation, was constructive fraud justifying a recovery of additional costs of excavation. The facts of the instant case are crucially different. There is no evidence here that PennDOT was in possession of any information that the rock elevations were different from those shown on the Soils Profile and Seismic Survey. Furthermore, the contract language relied on by the Commission in Pennsylvania Turnpike Commission v. Smith, supra, was more to the effect that the subsoil information provided was given in good faith and was not to be construed as an agreement that the character of material had been correctly indicated, whereas by the quoted language of the contract in this case, Central expressly covenanted that it had not relied on subsoil information provided by PennDOT in making its bid.

The case is ruled by the substantially similar cases of Branna Construction Corporation v. West Allegheny Joint School Authority, 430 Pa. 214, 242 A.2d 244 (1968), and Department of Transportation v. Acchioni & Canuso, Inc., 14 Pa. Commonwealth Ct. 596, 324 A.2d 828 (1974), petition for allocatur denied December 19, 1974. In both of the cases cited, it was clearly stated that essential to the holding of Pennsyl[30]*30vania Turnpike Commission v. Smith, supra, was the fact of actual misrepresentation of adverse conditions known to the entity inviting bids. It follows that insufficiency of the time allowed for investigation by bidders, standing alone, will not support a claim for extra compensation for unanticipated subsoil conditions. As indicated by Judge Blatt in her opinion in Department of Transportation v. Acchioni & Canuso, Inc., supra, the risk of unanticipated subsoil conditions is always present in projects let on an unclassified basis and one which should be considered by contractors when formulating their bids.

PennDOT’S Appeal

The facts with respect to Central’s claim for additional cost of borrow excavation are somewhat unusual and bear a somewhat detailed description. Central’s bid for an estimated 330,594 cubic yards of borrow excavation was 68 cents per cubic yard. It claims that it should be paid at the rate of $3.52 per cubic yard for 82,000 cubic yards of granular material required by the specifications to constitute the top one foot of embankments. This granular material was to consist of natural or synthetic mineral aggregates of which at least 65 per cent would be retained in a No. 200 sieve and to be obtained from Class 1, Class 2 or borrow excavation on the project. Central started work in May of 1966. On August 23, 1966, a soil engineer of the Commonwealth reported that materials taken from one location on the site did not pass a test for suitability for use as granular topping material. This information was given to Central which, by letter dated September 26, 1966, asked PennDOT to permit it to form the top foot of embankments of soil as well as granular material. This request was refused.

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Bluebook (online)
358 A.2d 445, 25 Pa. Commw. 25, 1976 Pa. Commw. LEXIS 1061, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-penn-industries-inc-v-commonwealth-pacommwct-1976.