Contractor denied additional payment

DEP required Jett Industries to clean channels at the Wards Island Wastewater Treatment Plant; Jett claimed that cleaning was extra work and sought an additional payment. Jett Industries, Inc. entered into an $116,969,000 contract with the Department of Environmental Protection to rehabilitate the settling system at the Wards Island Wastewater Treatment Plant. During the bidding process DEP, in response to bidders’ questions regarding the cleaning of tanks and channels, notified bidders that contractors were advised that “they are responsible for cleaning the tanks to a level that will allow for safe entry of their workers and for the performance of the work.” Jett thereafter submitted a bid and won the contract.

On May 18, 2018, DEP’s resident engineer directed Jett to completely clean each return sludge channel and final tank influent channel at no additional cost to the City. On May 31, 2018, Jett, relying on DEP’s pre-bid response concerning the cleaning of the tanks and channels, challenged the directive and filed a notice of dispute with the DEP Commissioner. The DEP Commissioner denied Jett’s notice of dispute, stating that if Jett found DEP’s pre-bid response unclear, Jett was responsible for requesting further clarification in writing.

On August 3, 2018, Jett filed a notice of claim with the City Comptroller. The Comptroller on February 25, 2019, denied Jett’s claim. The Comptroller stated that DEP’s pre-bid response did not address cleaning the final settling tank and that the terms “tank” and “channel” were not used interchangeably in any of the contract documents, nor were either term defined as including the other. The Comptroller ruled that bidders were required to clarify any ambiguity before bidding and, if a bidder failed to do so, the City assumed that the bidder calculated the cost according to the most expensive way of doing the work.

Jett filed a petition with the Contract Dispute Resolution Board seeking compensation of $48,421.14 in additional compensation for the extra work in cleaning each channel.

The Conflicts Dispute Resolution Board denied Jett’s claim for additional compensation. While the Board found ambiguity in DEP’s response as to whether the term “tanks” also included “channels,” the contract required Jett to seek clarification of ambiguous contract terms before bidding. Jett’s failure to request clarification from DEP before bidding bound Jett to the Department’s interpretation of the disputed term.

Jett Industries, Inc. v. Department of Environmental Protection, OATH Index No. 2087/19, OATH Trials Division (January 16, 2020).

By: Lauren Hatz (Lauren is a New York Law School graduate, Class of 2020.)


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