LiRo/HAKS, J.V. v. Dep t of Design & Construction OATH Index No. 1466/14, mem. dec. (Mar. 31, 2014)
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1 LiRo/HAKS, J.V. v. Dep t of Design & Construction OATH Index No. 1466/14, mem. dec. (Mar. 31, 2014) Petition requesting additional compensation for electrical work dismissed as time-barred. NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS CONTRACT DISPUTE RESOLUTION BOARD In the Matter of LIRO/HAKS, J.V. Petitioner - against - DEPARTMENT OF DESIGN AND CONSTRUCTION Respondent MEMORANDUM DECISION KEVIN CASEY, Administrative Law Judge/Chair LISETTE CAMILO, ESQ., Deputy General Counsel, Mayor's Office of Contract Services LANA S. FLAME, ESQ., Prequalified Panel Member Pending before the Contract Dispute Resolution Board ( CDRB ) is a petition of LiRo/HAKS, J.V. ( Liro ), a joint venture of LiRo Program and Construction Management, P.C., and HAKS Engineers, Architects, and Land Surveyors, P.C., seeking additional compensation, on behalf of ATJ Electrical, Inc. ( ATJ ) under a contract entered into with the Department of Design and Construction ( DDC ). DDC moved to dismiss the petition as time-barred and Liro filed a response. For the reasons below, the Board finds that the petition is time-barred and grants DDC s motion to dismiss. FACTUAL AND PROCEDURAL HISTORY In January 2009, Liro entered into a multi-million dollar contract with DDC to construct the new 121 st Police Precinct on Staten Island. Liro later subcontracted electrical work to ATJ.
2 -2- The petition stems from a dispute concerning the location of electrical conduits. Liro claims that the contract specifically allowed for under-slab or in-slab conduits but DDC s architect insisted on above-the-slab conduits (Petition ( Pet. ) 11). As a result, Liro now seeks reimbursement of $195,321.91, for additional costs that it claims were incurred by ATJ (Pet. 51; Pet. Ex. B at Ex. 13). At a contractor s coordination meeting in early 2010, ATJ proposed installation of under-slab or in-slab conduits and there was a discussion that this might not be acceptable to the Police Department (Pet. 8). Liro sought clarification by submitting a Request for Information on March 2, 2010 (Pet. Ex. B at Ex. 5). Two days later, on March 4, 2010, the project architect responded to Liro s request by stating, NYPD would prefer that there be very limited, or no conduits placed in or under the slab (Pet. 9; Pet. Ex. B at Ex. 5). The architect added, NYPD has had bad experiences with locating conduits in or under slabs for several reasons. Id. Among other things, the architect noted that: conduits are laid out early in the process and if wall locations are changed due to various conditions the slab has to be chopped-up and repoured; placing conduits in the slab has had a deleterious effect on the slab s structural integrity; and under-slab conduits have separated after construction as a result of poor soil conditions. Id. The architect noted, If the contractor is willing to assume all responsibility for correcting any errors that result in having to relocate conduits or correct slab structural integrity, the civil engineer approves having conduits under the slab, and the structural engineer approves of having conduits in the slab, then the NYPD has no objections. Id. Shortly afterwards, ATJ submitted shop drawings for the conduits. After reviewing the drawings, the architect rejected under-slab and in-slab conduits, except as annotated (Pet. 10, 11; Pet. Ex. B at Ex. 7, item 1; Pet. Ex. D at Ex. 7, item 1). The architect cited contract specifications that set restrictions for conduits, stated that the contract drawing clearly indicates that major conduits were to be mounted overhead, noted that the contractor does not have the option of installing whatever conduits he wants underground, and conduits were not permitted in slab (Pet. Ex. B at Exs. 6, 7; Pet. Ex. D at Exs. 6, 7). By on April 12, 2010, and letter on May 6, 2010, ATJ notified Liro that it did not agree with the architect s response. ATJ maintained that the contract specifications
3 -3- cited by the architect did not specify the installation options for the conduits. And ATJ further claimed that the architect s response to the March 2010 Request for Information allowed for under-slab or in-slab conduits, with certain conditions. ATJ s project manager also told Liro, We reserve the right to submit all additional costs associated with this response within thirty days to the DDC (DDC s Motion to Dismiss ( Mot. ) at Ex. C). On July 27, 2010, ATJ submitted a Change Order Request for extra costs to Liro, seeking $201, for the installation of above-slab electrical conduits (Pet. 13; Pet. Ex. D 3). Liro submitted the Change Order Request to DDC (Pet. Ex. D at Ex. 11). On February 24, 2011, Liro met with DDC to discuss the change order for the electrical conduits. Later that day, Liro ed ATJ with the results of the meeting. According to Liro, it had a meeting with DDC to discuss your two COs and that DDC has referenced us back to the General Conditions , Part C, of the contract (Pet. Ex. D at Ex. 11). The next day, ATJ ed its disagreement to Liro. ATJ indicated that denial of the change order was contrary to the contract and specifications, and it was entitled to additional costs for contract changes (Pet. Ex. D at Ex. 10). First Notice of Dispute ATJ provided Liro with a Notice of Dispute on June 28, 2011 (Pet. 17). More than six months later, on January 11, 2012, Liro submitted the Notice of Dispute to DDC s Commissioner (Pet. 18; Pet. Ex. D). By letter dated January 23, 2012, an associate commissioner designated by DDC s Commissioner to decide this matter, notified Liro that the claim was rejected because it was untimely. The letter noted that DDC s project manager had denied the request for extra costs in February 2011, ATJ prepared the Notice of Dispute in June 2011, and Liro did not submit the Notice of Dispute to the Commissioner until January 2012, well beyond the 30- day time limit provided by the contract and Procurement Policy Board ( PPB ) Rules (Mot. Ex. F).
4 -4- Second Notice of Dispute On May 31, 2012, Liro submitted a change order for the costs associated with the exact same disputed electrical conduit work it submitted previously. ATJ again requested $201, for additional costs; however, Liro reduced the request to $195, (Pet. Ex. B at Ex. 13 at 1-2, 6). On July 18, 2012, DDC rejected the change order for additional costs claimed (Pet. 21; Pet. Ex. F). On July 23, 2012, ATJ prepared a second Notice of Dispute, which Liro submitted to DDC s Commissioner on August 2, 2012 (Pet. Ex. B). On July 18, 2013, Liro resubmitted the second Notice of Dispute, apparently because DDC misplaced the previous submission (Mot. Ex. I). On August 5, 2013, the Commissioner s designee denied the second Notice of Dispute as untimely (Mot. Ex. J). Notice of Claim Liro submitted a Notice of Claim to the City of New York Office of Comptroller on August 30, The Comptroller denied the claim on November 21, 2013 as untimely due to the failure to submit the Notice of Dispute or the Notice of Claim within the times specified by the Contract and PPB Rules (Pet. Ex. H). Motion to Dismiss On December 18, 2013, Liro filed a petition with the CDRB. DDC moved to dismiss the petition on February 18, 2014, and Liro submitted its opposition to the Motion to Dismiss on March 12, In its petition and opposition to the Motion to Dismiss, Liro contends that it acted in a timely manner because: DDC did not formally reject the extra cost proposal in February 2011; Liro s February 24, to ATJ was not an official agency determination; the first Notice of Dispute submitted to the Commissioner on January 11, 2012, was a Preliminary Notice of Dispute; and the Commissioner s January 28, 2012 rejection of that first Notice of Dispute was a nullity (Pet. 38; Liro Answer ( Ans. ) to Motion to Dismiss at 5-6).
5 -5- ANALYSIS Article 29(4)(a) of the Contract and section 4-09(d)(1) of the PPB Rules require a contractor to file a Notice of Dispute with the Agency Head within 30 days of receiving notice of the determination or action that is the subject of the dispute (Mot. at Exs. A, N). And before any dispute may be brought to the CDRB, article 27(5)(a) of the Contract and section 4-09(e)(1) of the PPB Rules require the contractor to file a Notice of Claim with the Comptroller within thirty days of receipt of a decision by the Agency Head (Mot. at Exs. A, N). Failure to comply with the time limits set forth in the contract and PPB Rules for seeking additional payment is grounds for dismissal. See Start Elevator, Inc. v. City of New York, 104 A.D.3d 488 (1st Dep t 2013) (upholding dismissal of claim for failure to comply with PBB Rules and contract provisions regarding timely filing of petition with CDRB); see also SPMP Joint Venture v. Dep t of Environmental Protection, OATH Index No. 808/06, mem. dec. (Jan. 31, 2006); D & D Mason Contractors v. Dep t of Parks and Recreation, OATH Index No. 158/01, mem. dec. (Aug. 21, 2000). Here, Liro s first Notice of Dispute claimed that DDC rejected the proposal for additional costs for the electrical conduits on February 24, Liro had 30 days to file a Notice of Dispute with DDC s Commissioner. Liro failed to do that. Instead, Liro filed its first Notice of Dispute more than 300 days later. The Commissioner denied that claim as untimely. Liro now contends that the first Notice of Dispute was merely a Preliminary Notice of Dispute and there was ambiguity regarding the initial rejection of the proposal for extra costs (Ans. at 2, 6). Those claims lack merit. To begin with, when it filed its first Notice of Dispute to DDC s Commissioner, Liro never suggested that it was Preliminary (Ans. at 2, 4, 6). It was a Notice of Dispute (Pet. Ex. D). Nor did the first Notice of Dispute suggest that there was any ambiguity concerning the timing of the rejection of the proposed extra costs. ATJ submitted the Notice of Dispute to Liro on June 28, 2011, which Liro forwarded, unchanged, to DDC s Commissioner more than six months later. In that Notice of Dispute, ATJ wrote, After numerous revisions an onsite meeting was held with LIRO/HAKS and DDC to review the costs outlined in our proposal. On February 24, 2011, DDC rejected our proposal via and referenced us
6 -6- back to the General Conditions , Part C, Exhibit 11 (Pet. at Ex. D, ATJ Letter attached to Notice of Dispute) (emphasis added). As the first Notice of Dispute and the Commissioner s January 2012 rejection of that dispute make clear, all of the parties agreed that DDC rejected the request for additional costs on February 24, Liro now claims that the determination on February 24, 2011, was ambiguous. Even were we to find that there was some ambiguity concerning the decision on February 24, 2011, there was no ambiguity in the Commissioner s Decision on January 23, The Commissioner unequivocally rejected Liro s claim as time-barred. If Liro disagreed with that determination, it had 30 days to file a Notice of Claim with the Comptroller. Liro failed to do so. Instead, Liro submitted a new change order and later submitted a second Notice of Dispute, in July 2012, for the claim that DDC had already rejected as time-barred. That, alone, is grounds for dismissal of the petition. See URS Corp. v. Dep t of Design & Construction, OATH Index No. 1448/07, mem. dec. at 3-4 (May 18, 2007) (dismissing petition as time-barred where contract required notice of claim to be filed within 20 days of agency head s decision, agency head mistakenly stated that petitioner had 30 days to do so, and notice of claim not filed with Comptroller until 55 days after agency head s decision); SPMP, OATH No. 808/06 at 2-3 (dismissing petition as timebarred where notice of claim filed with Comptroller s Office more than 14 months after Commissioner s denial of notice of dispute); see also Maracap Construction Industries, Inc. v. Dep t of Transportation, OATH Index No. 711/08, mem. dec. at 5 (May 9, 2008) (no need to resolve issue regarding timeliness of notice of dispute where petition time-barred due to untimely notice of claim). Contrary to Liro s contention, the second Notice of Dispute was nearly identical to the first. Both Notices of Dispute include the same diagrams, the same itemized list of added costs, and the same arguments in support of ATJ s claim that under-slab or in-slab conduits were permitted by the contract. The most significant difference between the first and second Notices of Dispute is that Liro reduced the amount requested by ATJ in the second Notice of Dispute by approximately 4%. Otherwise, it is the same request, arising from the same disputed interpretation of the contract, involving the same conduits.
7 -7- A contractor cannot circumvent the strict time limitations of a contract and the PPB Rules by relabeling and resubmitting untimely claims. That is what Liro seeks to do here. Liro s claim is barred because it did not file a timely Notice of Claim with the Comptroller. CONCLUSION DDC s motion is granted and the petition is dismissed. All concur. Dated: March 31, 2014 APPEARANCES: RICH, INTELISANO, & KATZ, LLP Petitioner s Attorney BY: DANIEL KATZ, ESQ. ZACHARY CARTER, ESQ. NEW YORK CITY CORPORATION COUNSEL Respondent s Attorney BY: SCOTT GLOTZER, ESQ. Kevin Casey Administrative Law Judge/Chair
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