Ross Contracting, Inc. v. Frederick Cnty.

221 Md.App. 564

109 A.3d 1276

ROSS CONTRACTING, INC.

v.FREDERICK COUNTY, Maryland.

No. 977, Sept. Term, 2013.

Court of Special Appeals of Maryland.

Feb. 25, 2015.

Howard S. Stevens (Marc A. Campsen, Wright, Constable & Skeen LLP, on the brief), Baltimore, MD, for appellant.

Kathy L. Mitchell (John S. Mathias, Co. Atty., on the brief), Frederick, MD, for appellee.

Panel: BERGER, NAZARIAN and REED, JJ.

Opinion

NAZARIAN, J.

This appeal arises from a construction contract between the Board of County Commissioners of Frederick County (the “County”) and Ross Contracting, Inc. (“Ross”), for the replacement of the Bidle Road Bridge. Among other things, the Contract required Ross to remove the bridge's existing supporting abutments and excavate for new supports. In the course of excavating one of the abutments, Ross encountered subsurface conditions that differed from those it expected, so it filed a request for an equitable adjustment in the contract price to reflect the differences. The County denied Ross's request. An arbitrator appointed pursuant to the Contract¹ affirmed that denial in part, reversed it in part, and awarded Ross a smaller equitable adjustment than it had requested. The Circuit Court for Frederick County upheld the arbitration decision, finding substantial evidence in the record to support the arbitrator's decision that Ross did not encounter a materially different site condition. Ross seeks our review, but we dismiss because Ross had no right of appeal to this court.

I. BACKGROUND

A. The Contract And Its Performance

In October 2008, the County issued an Invitation to Bid (the “Invitation”) for a contract to construct the “Replacement of Bidle Road Bridge No. F03–10 over Catoctin Creek.” The Invitation called for the removal of the existing one-lane bridge structure and supporting abutments, excavation for new supports, and construction of a new two-lane bridge structure and roadway (the “Project”). Prospective bidders were also provided, among other things, with the Maryland State Highway Administration's Standard Specifications for Construction and Materials (the “Specifications”) and four soil boring logs² of the excavation area, designated B–1 through B–4, that indicated to bidders the types of subsurface materials at the excavation site.³ Soil boring logs B–1 and B–2 were from the area where Abutment A was to be constructed, and B–3 and B–4 were from the area where Abutment B was to be constructed. The soil boring logs for Abutment B indicated that the winning contractor should anticipate disintegrated rock down to a depth of 360 feet above sea level (“ASL”) at B–3 and 366.40 feet ASL at B–4. As such, the contract provided that the contractor would excavate to a depth of 382 feet ASL, where it would place the bottom of the footer for Abutment B.

Ross, a construction company based in Mount Airy, reviewed the Invitation and, as part of the bid process, examined the Project site on four separate occasions. Ross was the successful low bidder and entered into a contract with the County on February 3, 2009 (the “Contract”). The Contract incorporated, among other things, the Invitation, the Specifications, and the soil boring logs. The Specifications included specific provisions covering situations where site conditions during performance varied from the conditions set forth in the Contract:

GP–4.05 Differing Site Conditions

(a) The Contractor shall promptly, and before such conditions are disturbed, notify the procurement officer in writing of:

(1) Subsurface or latent physical conditions at the site differing materially from those indicated in this Contract; or

(2) Unknown physical conditions at the site of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this contract.

The procurement officer shall promptly investigate the conditions, and if he finds that such conditions do materially so differ and cause an increase or decrease in the Contractor's cost of, or the time required for, performance of any part of the work under this Contract, whether or not changed as a result of such conditions, an equitable adjustment shall be made and the Contract modified in writing accordingly.

(b) No claim of the Contractor under this clause shall be allowed unless the Contractor has given the notice required in (a) above; provided however, the time prescribed therefore may be extended by the State.

GP–4.06 Changes

(d) ... [I]f any change under this clause causes an increase or decrease in the Contractor's cost of, or the time required for, the performance of any part of the work under this Contract, whether or not changed by any order, an equitable adjustment shall be made and the Contract modified in writing accordingly. Provided, however, that except for claims based on defective specifications, no claim for any change under [4.06](b) above shall be allowed for any costs incurred more than 20 days before the Contractor gives written notice as therein required; and provided further, that in the case of defective Specifications for which the [County] is responsible, the equitable adjustment shall include any increased cost reasonably incurred by the Contractor in attempting to comply with such defective Specifications.

(e) If the Contractor intends to assert a claim for an equitable adjustment under this clause, he shall, within 30 days after receipt of a written change order under [4.06](a) above or the furnishing of written notice under [4.06](b) above, submit to the procurement officer a written statement setting forth the general nature and monetary extent of such claim, unless this period is extended by the State[.]

Overall, and before any adjustments, the County agreed to pay Ross in “an amount not to exceed the contract bid price of [$1,293,797.50].”

Ross first completed demolition and excavation work on Abutment A, then began excavation activities for Abutment B on April 22, 2009. Excavation continued until April 29, when Ross encountered hard rock material above the elevations indicated on the boring logs provided by the County. The following day, Ross notified the County of what it believed to be a differing site condition, as described in GP–4.05. The County suspended excavation activities on May 1.

The County directed Ross to engage a third-party quality control/inspector subcontractor, ECS, Ltd. (“ECS”), to perform three additional borings in the area of Abutment B. ECS conducted the boring operations on May 11 and 12, 2009, and on May 18, it gave Ross a report of its findings (the “ECS Report”). The ECS Report indicated that hard rock materials existed at a depth of 389 feet ASL and that these materials differed from the conditions represented on the boring logs provided by the County.

The County reviewed the ECS Report and, on May 26, 2009, informed Ross that it would issue a revised design of Abutment B. Two days later, Ross notified the County that it anticipated filing a claim for an equitable adjustment due to the differing site conditions and changed design. On June 2, the County issued a “red-lined version of the Project designed for Abutment B,” which “raised” the bottom of the Abutment B footer by three feet—from 382 feet ASL to 385 feet ASL. The County noted that the newfound hard rock material made it unnecessary to excavate the additional three feet as originally planned because those depths would ultimately have been filled with concrete.

Ross completed construction of the revised design on June 24, 2009 and, pursuant to GP–4.06(e), submitted a Proposed Change Order (the “PCO”) requesting an equitable adjustment of the Contract price in the amount of $89,971.55. Ross sought additional compensation for the added costs and time necessitated by the revised design, as well as the cost of ECS's geotechnical exploration per the County's direction.

In a letter dated July 27, 2009, the County rejected Ross's PCO, stating that Ross was “only due a reasonable amount for the Geotechnical Services provided by ECS ... and that the credit due as a result of the raising of the bottom footing elevation ... may offset the additional inconvenience caused by the time it took to excavate the harder rock.” On November 17, 2009, Ross submitted a revised claim for $124,902.64, which the County also denied. In response, Ross invoked the Contract's Arbitration provision:

Pursuant to [Art. 25 § 1A(g)], in the event of a dispute between the parties to this contract involving $10,000.00 or more regarding the terms of the contract or performance under the contract, the question involved in the dispute shall be subject to a determination of questions of fact by one of the following County Directors: Director of Public Works, Director of Utilities and Solid Waste Management, Finance Director or Director of Management Services. The County Manager, in his sole discretion, shall select one of these Directors to make this determination. The decision of the Director or other official is subject to review on the record by the Circuit Court for Frederick County.

On February 2, 2012, pursuant to this provision, the County appointed Kevin Demosky, the Director of the Frederick County Division of Utilities and Solid Waste Management, to serve as the hearing officer in this dispute (the “Hearing Officer”).

B. The Hearing Officer's Review

The Hearing Officer heard opening arguments and visited the Project Site on February 10, 2012, held evidentiary hearings on March 2 and 13, and accepted written briefs on April 5. On May 1, he issued a written decision granting in part and denying in part Ross's claim for an equitable adjustment of the Contract price. The summary of the Hearing Officer's findings, as provided by the circuit court, is helpful here:

The Agency^{[ 4 ]} concluded, in its Final Decision, that the rock encountered by Ross during the excavation did not amount to a materially different site condition pursuant to GP–4.05 of the Contract. The

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