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IN THE COURT OF CLAIMS OF OHIO
TRANSAMERICA BUILDING COMPANY, | Case No. 2013-00349
INC.
Referee Samuel Wampler
Plaintiff/Counter Defendant
DECISION OF THE REFEREE
V.
OHIO SCHOOL FACILITIES
COMMISSION, etc.
Defendant/Counter
Plaintiff/Third-Party Plaintiff/
Counter Defendant
Vv.
LEND LEASE (US) CONSTRUCTION,
INC. on-n
oar
Third-Party Defendant/Counter Zo
oro
Plaintiff/Fourth-Party
Plaintiff
and
STEED HAMMOND PAUL INC.., etc.
Third-Party
Defendant/Fourth-Party Plaintiff
Vv,
BERARDI PARTNERS, INC., et al.
Fourth-Party Defendants
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1, SUMMARY OF THE PROCEEDINGS
This action arises from a publicly bid contract (Contract)' entered into on
December 20, 2010 between TransAmerica Building Company, Inc. (TA) and the Ohio
School Facilities Commission (OSFC). Under the Contract TA was the general trades
contractor for partial construction of twelve dormitories (the "Dorm Project") at the Ohio
State School for the Blind (OSSB) and the Ohio School for the Deaf (OSD), collectively
referred to as the OSBD.? The public improvements consisted of six dormitories for
OSD and six dormitories for OSSB. The building types were wood frame, residential
style buildings and consisted of two basic models. One model was for high school
students (HS) and was approximately 3900 square feet. The other model was for
elementary and middle school students (ES/MS) and ranged in size from approximately
2200 to 2500 square feet, depending on the configuration. The Dorm Project was one
phase of the public improvements collectively referred to as the "OSBD Project,” and
which included site preparation and utilities, the Dorm Project, academic buildings and
what were called Campus-wide Bid Packages.?
On June 14, 2013, TA commenced this action against defendant OSFC to
recover damages for breach of contract, equitable adjustment and, breach of express
and implied warranties. OSFC answered and counterclaimed for damages for breach
‘Joint Exhibit (JX) JX-A.
*The phrase "partial construction" is based on facts explained more fully below, in that the scope
of TA's work under the Contract would result in living space that could not be occupied without additional
work to be furnished by OSFC through separate prime contracts, i.e. casework, controls and
technology/security/fire alarm system known as the Campus-wide Bid Packages. This additional work
was common to the dorms and academic buildings, and in some instances could not operate except as a
single system.
the "“Campus-Wide Bid Packages" consisted of casework, controls, technology/security/fire
alarm, and food service equipment. (Plaintiff Exhibit (TA) TA-0162/2).
‘Plaintiff amended its complaint on August 1, 2013 and included seven counts sounding in
contract and tort. Plaintiff voluntarily dismissed its claim for negligence as reflected in the court's entry
dated June 18, 2015. Plaintiff's claims for fraud, fraud in the inducement and negligent misrepresentation
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of contract. TA seeks what it alleges are wrongfully withheld liquidated damages,
unpaid contract balance, unpaid change orders and other damages arising from delay
and impacts to TA's work under the Contract caused by OSFC, its agents and other
prime contractors. By its counterclaim, OSFC seeks damages for correcting defective
roof work, increased operating costs, increased architect (A/E) and construction
manager (C/M) fees and costs, and paying claims of other prime contractors due to
delay allegedly caused by TA during construction.
Trial commenced May 18, 2015 and concluded on June 4, 2015.° Eighteen
witnesses gave sworn testimony, including six expert witnesses and three former
Executive Directors of the OSFC.° The court admitted over 200 exhibits offered jointly
by TA and OSFC, the authenticity of which was stipulated to at commencement of trial
and the majority of which were contemporaneous project records. The court also
admitted over 300 exhibits offered by TA, the majority of which were contemporaneous
project records, construction documents and written communications. And, the court
admitted over 30 exhibits offered by OSFC. All expert reports offered into evidence
were admitted except the report of Lee Martin, whose testimony was, however,
considered by the court.
The court also admitted several exhibits that, while not substantive proof of any
facts, were viewed by the court during the trial to better understand the evidence.
These exhibits were described as demonstrative or illustrative and some of them
were dismissed as reflected in the entry dated October 1, 2014 and such dismissal was confirmed by
entry dated April 9, 2015. The court does not distinguish between the remaining counts for breach of
contract, equitable adjustment and breach of express and implied warranties, but instead treats them all
as arising out of the Contract and thus as a claim for breach of contract.
By entry dated March 24, 2015, the trial of TA’s claim and OSFC's counterclaim was separated
from a trial of the claims by OSFC against its architect and construction manager by way of a third-party
complaint as well as a counterclaim and fourth-party claims by the architect against its consultants and a
counterclaim by the construction manager.
®Because he was unavailable as a witness, deposition testimony of Madison Dowlen, a project
administrator for OSFC during construction was read into the record by the attorneys for TA.
oe
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consisted of animations. Although the court did not review these exhibits in preparing
this report, it did admit them solely for a reviewing court to consider, if it decided to, how
the court might have considered testimony of witnesses as well as other evidence in
light of such demonstrative evidence.
ll. SUMMARY OF THE PROBLEMS
Many of the issues presented by TA's claim resulted from one or a combination
of the following: 1) an inadequate budget; 2) political forces; 3) OSFC's lack of
experience with residential type projects; 4) a poorly developed, unrealistic and
manipulated schedule; 5) confusing, incomplete, and unapproved design documents;’
6) slow and sometimes confusing or inadequate responses to TA's requests for
clarification or information about the drawings and specifications; 7) the architect
putting an unlicensed person in charge of contract administration;? 8) inability to
coordinate construction phases effectively; and 9) heavy-handed and sometimes
misleading conduct of the construction manager and the architect.
TA did have issues of its own, but when compared to the problems caused by
OSFC and its agents, those issues did not have a significant impact on the Dorm
Project or TA's work that was not captured in Don McCarthy's (McCarthy) analysis of
delay or otherwise carefully considered by the court in determining liability and
7As will be explained more fully below, "unapproved" means not approved by the Ohio
Department of Commerce, Division of Industrial Compliance (DIC), the agency responsible for issuing
plan approval for the Dorm Project.
®Often the slow response could be attributed to Berardi, but as the architect SHP was responsible
for the conduct of its consultants.
®Josh Predovich (Predovich) was substituted early on as the project manager for the architect
(TA-0014/1). Preodvich reported to Andrew Maletz, who was designated as the lead person for SHP (JX-
N-03/4, {| 1.1.5) and presumably a licensed architect, but who, from the evidence presented, rarely
showed up at any of the construction meetings or otherwise actively participated in the ongoing problems
with the Dorm Project during contract administration. Its contract with OSFC required SHP to furnish a
licensed architect to oversee contract administration and close-out phases during construction of the
dorms (JX-N-03/40, {| 6). From the evidence presented, this responsibility fell to Predovich who was,
admittedly, unlicensed during bidding and construction of the Dorm Project.
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damages." At the end of the day, it is clear that OSFC tried to build a project that OSD
and OSSB could not afford within the funding provided through the Capital Bill, and it
forced its contractors to achieve this task, at least with respect to the Dorm Project,
without approved or adequate construction documents.
Against the pressures of the budget and the schedule, the design and
construction of the dorms became more complex than it should have been, resulting in
poor decisions by the architect and construction manager. As it turned out, the Dorm
Project became very expensive for TA and others. Even with the damages awarded to
TA in this action, it will still have lost almost $2.5 million on the Dorm Project according
to its job cost report (JCR).’1 OSD and OSSB ended up with a compromised design
and reduced capacity for their new facilities and they were delayed in putting them into
service for their students. This was not the fault of TA. It was the fault of OSFC in its
efforts to build facilities that OSD and OSSB could not afford, and in trusting its agents
to carry out the task, agents who often acted in their own interest and not in the interest
of the OSFC, or fairly and honestly in their dealings with TA.
Il. SUMMARY OF THE FACTS”
A. Project History, Funding, Team Building and Planning
Because of its experience in the development of K-12 schools throughout Ohio;
OSFC was selected to lead the effort to plan, design and construct the OSBD Project,
‘McCarthy was TA's expert witness at trial on scheduling and damages. He also helped prepare
TA's supplemental certified claim submitted on November 7, 2012 (TA-0659).
“There were two job cost reports (JCRs) admitted at trial: a March 8, 2012 JCR submitted in
support of TA's first certified claim submitted on March 8, 2012 (TA-0592/TRANS00001 4-TRANS000087)
and a September 30, 2012 JCR submitted in support of TA’s supplemental claim submitted on November
7, 2012 (TA-0659-44 Tab C2 and TA-0659-57 Table C3, Job Cost Transaction Report). Unless indicated
otherwise, reference to the "JCR" herein means the September 30, 2012 JCR and corresponding Job
Cost Transaction Report).
‘Additional facts relevant to specific issues are set forth in more detail in the discussion of the
parties' claims, defenses and counterclaim.
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including the Dorm Project, adhering to the extent possible, to the requirements and
guidelines of the Ohio School Design Manual (TA-1300)."* This was not a typical
project for OSFC in that no school district was involved and it had never built or
administered the building of residential wood frame buildings. Several witnesses
described it as "unique" because of its wood frame residential character and limited
funding. The manner of funding differed from previous school building projects
administered by OSFC, because the funding for the OSBD Project came through the
state Capital Bill for OSD and OSSB and not through local funding by a school district in
combination with OSFC funds (TA-0022). In the event of a budget shortage, there was
no additional funding to pay for any additional costs, including contractor claims such as
TA's.*
In 2006, according to the testimony of Richard Hickman (Director Hickman), then
Executive Director of OSFC, funds for the planning, design and construction of new
school facilities for the OSSB and OSD were provided through the state Capital Bill.’
Construction of the OSBD Project was initially planned for a single campus combining
both schools on a common site and the budget was established accordingly."® This
single campus concept was advocated by Governor Taft's administration based on
other states that had done the same. When Governor Strickland took office in 2007,
‘Very little of the School Design Manual was applicable to the dorms because it did not cover
residential construction. However, what was applicable was the objective of the construction documents
phase. The manual clearly states that “These documents are submitted for agency approval for the
issuance of a building permit.” (TA-1300/000061).
“During early planning, OSFC explained that funding of the Project would not be typical of an
OSFC project and that a “second safety net" consisting of investment income accumulated during the
planning, design and construction of the project would not be available in the event of cost overruns (TA-
0014). See also, TA-0165.
"Director Hickman was Executive Director of OSFC in 2005-07 when the planning and design of
the Project began and again in 2011-14 during construction. He testified that when he returned to OSFC
as its Executive Director in 2011 he was surprised that the Project was not completed.
"at the time, OSSB and OSD were operated on separate campuses divided by an impassable
ravine and had operated like this for years.
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Officials of OSD and OSSB convinced his administration to keep the campuses
separate. However, the budget was never adjusted to accommodate a separate
campus for each school, which would, all other things being equal, be more costly and
the schools and OSFC realized this (TA-0026). During the planning, design and
construction of the OSBD Project, the budget was approximately $43-44 million, of
which approximately $8.4 million was ultimately spent on architectural and construction
management services, so-called “soft costs." (JX-H-63/21).'”
OSFC hired Bovis Lend Lease (LL) to serve as the construction manager and
Steed Hammond Paul (SHP) to serve as the architect’? LL and SHP were authorized
agents of OSFC during planning, design and construction of the Dorm Project. LL and
SHP had considerable experience working with OSFC on K-12 school facilities
throughout Ohio, but had no experience working with OSFC on a project with a fixed
budget. Neither SHP nor LL had ever designed or administered the construction of any
wood frame dormitories for OSFC. Both LL and SHP were authorized to and did
engage consultants to assist them in providing their respective services to OSFC.
Because SHP did not design wood frame residential type projects it hired Berardi +
Partners, Inc. (Berardi) to prepare the housing design/architectural drawings.'®
After the fact, OSFC, and LL in particular, are critical of TA as not being
experienced in OSFC projects and public improvements generally. However, LL
presumably satisfied itself that TA was qualified to build the dorms through the post-bid
interview process and recommended that OSFC award it the general trades contract.
"By June 20, 2013, only $32.3 million had been spent for construction costs of the original
bid/estimate of $37 million. On the other hand, almost $8.4 million had been spent on architectural and
construction management services when the original estimate for such services was $6.5 million.
Remaining funds amounted to $2.8 million, of which a substantial portion consisted of funds wrongfully
withheld from TA. (JX-H-63/21)
*8Both LL and SHP are third-party defendants in this action.
*8SHP hired other design consultants for civil, structural, electrical, mechanical, etc., but their
services are not particularly relevant to the issues.
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TA's references included a broad range of successfully completed wood frame type
projects, including commercial projects, a dormitory for Ohio Dominican University, a
condominium complex, 12 story hi-rise apartments, and custom homes (TA-0145/6).
TA also furnished references to OSFC, confirmed by LL, which demonstrated that TA
had a good reputation as a contractor (TA-0146 and TA-0147). TA's president, William
Koniewich, had 30 years experience in construction starting as an estimator, then vice
president and ultimately as president of TA. He was on site regularly during
construction and was knowledgeable and forthright in his testimony. Among LL, SHP
and OSFC, TA was probably the most experienced entity with this type of wood frame
residential construction.2°
Robert Grinch (Grinch) was designated as the project administrator for OSFC to
oversee the OSBD Project. In Spring 2007, to facilitate the planning, design and
construction of the OSBD Project, a Core Team was formed consisting of
representatives from OSD, OSSB, OSFC, the Ohio Department of Education, Office of
Budget & Management, LL and SHP. The Core Team held its Meeting No. 1 on May 2,
2007 (JX-H-01). At this first meeting, according to witness Clay Keith ("Keith"), Michael
Shoemaker, then Executive Director of OSFC announced: "We do not want to do the
Ready, Fire, Aim. We want to be Ready, Aim, Fire" (TA-0584). Ready, Aim, Fire in
construction parlance means: Plan, Design, Build, a traditional, logical and efficient
method of construction. Ready, Fire, Aim, on the other hand, means Plan, Build,
Design, every public (and private) owner's fear. Ready, Fire, Aim probably best
describes the way the OSSB and OSD dorms were planned and built. In other words,
the Dorm Project design was completed "on the fly" after award of the contract and
?° Josh Wilhelm, TA's project manager was hired by TA to manage the construction of the dorms.
He did have experience on OSFC projects and he was well educated, trained and experienced in project
management. In addition, he worked as a carpenter during college at Bowling Green where, in 2001, he
earned a B.S. in construction management. He also was a knowledgeable and forthright witness. Smith
also had some experience with wood frame construction, but not design.
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during construction rather than being sufficiently complete and approved at the time
bids were solicited.?"
Core Team Meeting No. 1 was the first of 33 consecutive and documented
meetings of the Core Team at various intervals through July 15, 2010. Curiously, no
meeting minutes of Core Team meetings were offered by the parties as joint exhibits
reflecting meetings from July 15, 2010 until May 11, 2011.7 Thereafter, the Core Team
met at least another 20 times at various intervals through June 20, 2013. TA did submit
the minutes from an executive partnering session held on March 10, 2011, which
reflected serious problems with the budget. This meeting appears to have been
attended by the some of the members of the Core Team.
Budget constraints shaped the OSBD Project almost immediately and heavily
influenced decision making by OSFC, LL and SHP during the planning, design, bidding
and construction processes of both the dorms and academic facilities, as well as the
Campus-wide Bid Packages. The OSBD Project was fragmented and constructed in
several phases, due in part to budget constraints, design issues and poor scheduling.
Many of these issues were brought about by competing interests between the OSD and
OSSB as to what each school wanted from their new facilities and led to the scheduling
problems.
B. Dorm Project Bidding.
In or about Spring 2010, site work was underway by separate prime contractor(s)
to assure that building pads and underground utilities would be available for
construction of the dorms and academic buildings. In June 2010, SHP submitted plans
for sixteen dorms (eight on each campus) for review and approval by the Ohio
"Approved means an unconditional certificate of plan approval in hand from DIC.
2vhile it is not clear why the minutes between July 15, 2010 and May 11, 2011 were not
available, these minutes would have shed more light on why OSFC went out to bid in October with plans
that had not been approved by DIC. They also would have been helpful in better understanding the
schedule pressures that OSFC was dealing with at the time.
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Department of Commerce, Division of Industrial Compliance (DIC).?7 On these plans
the “Construction Type" was shown as V-A (also sometimes shown as 5A on related
documents) and the design included one-hour fire rated exterior and interior walls (TA-
0900, Sheet LS101). Knowing that it did not yet have plan approval for the dorms or
academic buildings, OSFC nevertheless solicited bids by issuing the unapproved plans
for construction of the dorms and academic buildings for bid opening on July 22, 2010
(Bid #1) based on assurances from SHP that plan approval was forthcoming and that
SHP would take steps to promptly address any issues presented by DIC in the approval
process (TA-0084). However, because the bids came in at almost 40% over the
advertised estimate they could not be accepted as a matter of law and OSFC did not
have such funds in its Budget to award contracts that were 40% over the advertised
estimate (TA-0129/3).
On July 29, 2010, DIC issued its first partial plan approval for the dorms that was
contingent on a complete and adequate response to 13 items outlined in Correction
Letter No. 1 accompanying the approval (TA-0091/7). Correction Letter No. 1 listed a
compliance date of August 28, 2010. SHP never responded to Correction Letter No. 1
prior to the re-bid of the Dorm Project on October 28, 2010 (Dorm Bid #2).2* Notably,
each sheet on the approved plans had the red DIC partial approval stamp and limitation
language on it (TA-0900). OSFC/LL did not issue these partially approved plans when
bids were solicited for Dorm Bid #2, nor were they disclosed to the bidders. Instead,
bidders were issued altered plans that had not been approved by DIC as explained
below.
The plans were dated 12/15/09 for "Permit and Review" and 4/16/2010 for "Permit and Bid” and
yet from the evidence, it appears they were not submitted to DIC until June 1, 2010 for "Permit and
Review." There was no explanation of why there was a 6 month delay in submitting the plans.
SUP did respond later in December 2010, and additional drawings for the dorms were
submitted to DIC during 2011 and 2012 for approval.
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After Bid #1, the academic buildings required considerable redesign and
refinement before they could go out for bid again, and given the budget pressure at the
time, OSFC decided to proceed with Dorm Bid #2 separately in order to more accurately
evaluate its impact on the budget for the academic buildings. As with bids for the
academic buildings, the Campus-wide Bid Packages common to both the dorms and
the academic buildings were not solicited until long after construction began on the
dorms, and were delayed several times due to design/budget issues. It was generally
understood by SHP and LL that any delay in the award of contracts for the Campus-
wide Bid Packages would adversely impact the contractors’ ability to complete the
dorms on schedule (TA-0162/2).
In order to better manage the budget, OSFC/SHP/LL took at least three steps
before soliciting bids for Dorm Bid #2:
1) They decided to bid the dorms only and see how much money would
remain in the budget for the two remaining phases, the academic buildings and
the Campus-wide Bid Packages;
2) They reconfigured the base bid to provide for six dorms on each campus
for a total of twelve dorms rather than sixteen as with Bid #1.> This eliminated a
total of four dorms (and their attendant costs) from the base bid, potentially
reducing the pressure on the budget. The four deleted dorms (OSSB4, OSSB8,
OSD4 and OSD8) were instead bid as alternates so the OSFC could see what
they would cost separately, and if the cost was within the budget OSFC could
accept them, but if not it could at least proceed with construction of the twelve
?5Each campus consisted of three elementary/middle school dorms and three high school dorms.
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dorms without further delay. Ultimately, the bid alternates for the four dorms
were not accepted;”6
3) They "value engineered" the design of the dorms.?” While SHP may have
implemented other opportunities during this process, the one identifiable action it
took was to substantially alter the plans for which it had obtained approval from
DIC on July 29, 2010. This alteration changed the fire-resistance construction
type from V-A to V-B. (The building type V-A was noted on the original
Certificate of Partial Plan Approval as 5A, [TA-0091], and as V-A on the plans
(TA-0900, Sheet LS100), but when the plans were altered the building type was
noted as V-B on the bid set (TA-0901, Sheet LS101). This was a significant and
material deviation from the partial plan approval issued by DIC on July 29, 2010.
Not only was the fire-resistance construction type changed, but this change
permitted SHP/Berardi to delete the one-hour fire rated exterior and interior walls
approved by DIC in July. These changes become apparent when sheets
LS101, LS101a and A002 of the plans for Dorm Bid #2 are compared with the
July 29, 2010 partially approved plans (TA-0901 and TA-0900, respectively).”°
The alteration is represented in TA-1421, TA-1422 and TA-1423. Such alteration
©The four deleted dorms, OSD4, OSD8, OSSB4 and OSSB8 remained on the bid schedule and
all recovery schedules during construction, which, according to TA's expert, Don McCarthy was confusing
and not a good practice from a scheduling standpoint.
?7According to the U.S. General Services Administration "[vjalue engineering can be defined as
an organized effort directed at analyzing designed building features, systems, equipment, and material
selections for the purpose of achieving essential functions at the lowest life cycle cost consistent with
required performance, quality, reliability, and safety." http:/Awww.gsa.gov/portal/category/21589. In other
words, acceptably less expensive.
28aithough it was not mentioned at trial, this seemed particularly disconcerting considering these
dorms were being constructed as living quarters for deaf and blind children who, in the case of a fire,
would be at a disadvantage that in some instances only time could protect them from. To the court, this is
an example of how unrealistic budget pressures led to poor decision making on this project by OSFC,
SHP and LL.
?8it is apparent to the court, but would not have been apparent to TA at the time it submitted its
bid or during construction, because TA did not know about the partial approval by DIC in July 2010.
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was not disclosed to TA at or before Dorm Bid #2 or when TA entered into the
Contract with OSFC and the alteration was not submitted or disclosed to DIC for
approval prior to Dorm Bid #2. The fact that SHP did not include DIC's stamped
plan sheets in the bid set that were not changed is evidence of an intent to
conceal the fact that there was only partial approval for the plans or that the
plans had been altered.
Consequently, when it solicited bids for Dorm Bid #2, OSFC issued plans to the
bidders that had not been approved by DIC. The fire-resistance changes were more
akin to "bid engineering" than "value engineering" because ultimately DIC caught SHP
in this scheme and required one-hour fire rated walls between the dorm rooms as well
as other fire protection components.*° These altered plans also resulted in a protracted,
confusing and expensive series of events for OSFC and TA and it led to dimensional
framing issues, extensive reworking and unnecessary confusion for TA during
construction, much of which could not be fully realized in the scope of any change
orders.*"
Not knowing about the altered plans for Dorm Bid #2 and that OSFC did not have
plan approval at bid time, TA submitted its bid for the general trades contract for the
Dorm Project.2_ TA was the apparent second low bidder and its bid was within 2% of
the published estimate. TA's overall bid was reasonable according to Keith and other
By “bid engineering" it is meant that SHP and its consultant, Berardi, made a change to the
drawings that would help to reduce the bid estimate and therefore the bids, but in the end it was nothing
more than a ruse because it led to almost $100,000 in change orders (JX-F-25 and JX-F-26) as well as
other costly life-safety requirements.
“It is hard to appreciate just how confusing the plans were, but a good example is revealed in an
email from LL/Keith to SHP/Predovich on July 27, 2011, over three months after TA had mobilized to the
job site (TA-0410), referring to a recent inspection, "[hJe is not going to sign off or approve any further
inspection requests until revised/updated/stamped drawings are available for review." This was in
reference to the DIC inspector's confusion over the drawings.
2The partial plan approval by DIC was useless to OSFC at the time of the second bid opening
because of unapproved changes made to the plans by SHP. There was no evidence that DIC was made
aware of these material changes or approved of them at the time bids were solicited for Dorm Bid #2.
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witnesses. The apparent low bidder was allowed to withdraw its bid based on a mistake
it claimed it made when preparing its bid. TA was then selected as the next low bidder
and after completing post-bid interviews with LL, and receiving the recommendation of
LL, OSFC awarded TA the Contract for the general trades work, which was executed on
December 20, 2010 (JX-A).
C. Dorm Project Construction Drawings.
Weeks before TA signed the Contract it requested revised and complete
drawings and SHP/Berardi promised to issue such drawings including all changes to
date (TA-0164). These changes were extensive and consisted of well over 100 specific
changes to the drawings, substantial changes to the technical specifications and over
150 pre-bid RFls, many of which affected the drawings.** While the bid set of plans
may have been sufficient upon which to submit a bid, they were not full and accurate
nor were the details easily understood so as to be sufficient for construction. To the
contrary, the drawings were described by various witnesses, including representatives
of OSFC, SHP and LL, as flawed, useless, worthless, trash, confusing and any number
of other adjectives, none of which are synonymous with unambiguous, full, accurate or
easily understood.
58 more detailed explanation is set forth below in "Problems with the Drawings."
SRF] (Request For Information) is a process to obtain clarification or interpretation of the Contract
Documents (JX-B/14, General Conditions (GC) 2.2.2). The inquirer (usually a bidder, contractor or the
construction manager) submits a specific form (RFI) setting forth the question, the date a response is
needed and any suggested solution. On this project, RFls were submitted through LL's construction
management software, Prolog Manager. Once the contract is awarded and executed, the architect then
is required to answer an RFI within three business days of receipt as provided in GC 2.2.2.2 (JX-B/15).
As can be seen from a review of the RFI Log (JX-L), SHP rarely responded to RFls within three business
Preview
Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R59 ao _ IN THE COURT OF CLAIMS OF OHIO TRANSAMERICA BUILDING COMPANY, | Case No. 2013-00349 INC. Referee Samuel Wampler Plaintiff/Counter Defendant DECISION OF THE REFEREE V. OHIO SCHOOL FACILITIES COMMISSION, etc. Defendant/Counter Plaintiff/Third-Party Plaintiff/ Counter Defendant Vv. LEND LEASE (US) CONSTRUCTION, INC. on-n oar Third-Party Defendant/Counter Zo oro Plaintiff/Fourth-Party Plaintiff and STEED HAMMOND PAUL INC.., etc. Third-Party Defendant/Fourth-Party Plaintiff Vv, BERARDI PARTNERS, INC., et al. Fourth-Party Defendants EXHIBIT C (Page 1 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R6 WISSEP 17 PH yeigg Case No. 201 3-00349 -2- DECISION 1, SUMMARY OF THE PROCEEDINGS This action arises from a publicly bid contract (Contract)' entered into on December 20, 2010 between TransAmerica Building Company, Inc. (TA) and the Ohio School Facilities Commission (OSFC). Under the Contract TA was the general trades contractor for partial construction of twelve dormitories (the "Dorm Project") at the Ohio State School for the Blind (OSSB) and the Ohio School for the Deaf (OSD), collectively referred to as the OSBD.? The public improvements consisted of six dormitories for OSD and six dormitories for OSSB. The building types were wood frame, residential style buildings and consisted of two basic models. One model was for high school students (HS) and was approximately 3900 square feet. The other model was for elementary and middle school students (ES/MS) and ranged in size from approximately 2200 to 2500 square feet, depending on the configuration. The Dorm Project was one phase of the public improvements collectively referred to as the "OSBD Project,” and which included site preparation and utilities, the Dorm Project, academic buildings and what were called Campus-wide Bid Packages.? On June 14, 2013, TA commenced this action against defendant OSFC to recover damages for breach of contract, equitable adjustment and, breach of express and implied warranties. OSFC answered and counterclaimed for damages for breach ‘Joint Exhibit (JX) JX-A. *The phrase "partial construction" is based on facts explained more fully below, in that the scope of TA's work under the Contract would result in living space that could not be occupied without additional work to be furnished by OSFC through separate prime contracts, i.e. casework, controls and technology/security/fire alarm system known as the Campus-wide Bid Packages. This additional work was common to the dorms and academic buildings, and in some instances could not operate except as a single system. the "“Campus-Wide Bid Packages" consisted of casework, controls, technology/security/fire alarm, and food service equipment. (Plaintiff Exhibit (TA) TA-0162/2). ‘Plaintiff amended its complaint on August 1, 2013 and included seven counts sounding in contract and tort. Plaintiff voluntarily dismissed its claim for negligence as reflected in the court's entry dated June 18, 2015. Plaintiff's claims for fraud, fraud in the inducement and negligent misrepresentation EXHIBIT C (Page 2 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 R6 oo ! courts ED FG LAINS OF OHI 22015 SEP; ET: PHL GeiD Case No. 2013-00349 -3- DECISION of contract. TA seeks what it alleges are wrongfully withheld liquidated damages, unpaid contract balance, unpaid change orders and other damages arising from delay and impacts to TA's work under the Contract caused by OSFC, its agents and other prime contractors. By its counterclaim, OSFC seeks damages for correcting defective roof work, increased operating costs, increased architect (A/E) and construction manager (C/M) fees and costs, and paying claims of other prime contractors due to delay allegedly caused by TA during construction. Trial commenced May 18, 2015 and concluded on June 4, 2015.° Eighteen witnesses gave sworn testimony, including six expert witnesses and three former Executive Directors of the OSFC.° The court admitted over 200 exhibits offered jointly by TA and OSFC, the authenticity of which was stipulated to at commencement of trial and the majority of which were contemporaneous project records. The court also admitted over 300 exhibits offered by TA, the majority of which were contemporaneous project records, construction documents and written communications. And, the court admitted over 30 exhibits offered by OSFC. All expert reports offered into evidence were admitted except the report of Lee Martin, whose testimony was, however, considered by the court. The court also admitted several exhibits that, while not substantive proof of any facts, were viewed by the court during the trial to better understand the evidence. These exhibits were described as demonstrative or illustrative and some of them were dismissed as reflected in the entry dated October 1, 2014 and such dismissal was confirmed by entry dated April 9, 2015. The court does not distinguish between the remaining counts for breach of contract, equitable adjustment and breach of express and implied warranties, but instead treats them all as arising out of the Contract and thus as a claim for breach of contract. By entry dated March 24, 2015, the trial of TA’s claim and OSFC's counterclaim was separated from a trial of the claims by OSFC against its architect and construction manager by way of a third-party complaint as well as a counterclaim and fourth-party claims by the architect against its consultants and a counterclaim by the construction manager. ®Because he was unavailable as a witness, deposition testimony of Madison Dowlen, a project administrator for OSFC during construction was read into the record by the attorneys for TA. oe EXHIBIT C (Page 3 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R6 _ ee — COURS OF CLAIns QISSEP 17 PH We he : Case No. 2013-00349 -4- DECISION consisted of animations. Although the court did not review these exhibits in preparing this report, it did admit them solely for a reviewing court to consider, if it decided to, how the court might have considered testimony of witnesses as well as other evidence in light of such demonstrative evidence. ll. SUMMARY OF THE PROBLEMS Many of the issues presented by TA's claim resulted from one or a combination of the following: 1) an inadequate budget; 2) political forces; 3) OSFC's lack of experience with residential type projects; 4) a poorly developed, unrealistic and manipulated schedule; 5) confusing, incomplete, and unapproved design documents;’ 6) slow and sometimes confusing or inadequate responses to TA's requests for clarification or information about the drawings and specifications; 7) the architect putting an unlicensed person in charge of contract administration;? 8) inability to coordinate construction phases effectively; and 9) heavy-handed and sometimes misleading conduct of the construction manager and the architect. TA did have issues of its own, but when compared to the problems caused by OSFC and its agents, those issues did not have a significant impact on the Dorm Project or TA's work that was not captured in Don McCarthy's (McCarthy) analysis of delay or otherwise carefully considered by the court in determining liability and 7As will be explained more fully below, "unapproved" means not approved by the Ohio Department of Commerce, Division of Industrial Compliance (DIC), the agency responsible for issuing plan approval for the Dorm Project. ®Often the slow response could be attributed to Berardi, but as the architect SHP was responsible for the conduct of its consultants. ®Josh Predovich (Predovich) was substituted early on as the project manager for the architect (TA-0014/1). Preodvich reported to Andrew Maletz, who was designated as the lead person for SHP (JX- N-03/4, {| 1.1.5) and presumably a licensed architect, but who, from the evidence presented, rarely showed up at any of the construction meetings or otherwise actively participated in the ongoing problems with the Dorm Project during contract administration. Its contract with OSFC required SHP to furnish a licensed architect to oversee contract administration and close-out phases during construction of the dorms (JX-N-03/40, {| 6). From the evidence presented, this responsibility fell to Predovich who was, admittedly, unlicensed during bidding and construction of the Dorm Project. EXHIBIT C (Page 4 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R63 - COURT OF CLAIMS Q0I5SEP 17 PM Wi 42 Case No. 2013-00349 -5- DECISION damages." At the end of the day, it is clear that OSFC tried to build a project that OSD and OSSB could not afford within the funding provided through the Capital Bill, and it forced its contractors to achieve this task, at least with respect to the Dorm Project, without approved or adequate construction documents. Against the pressures of the budget and the schedule, the design and construction of the dorms became more complex than it should have been, resulting in poor decisions by the architect and construction manager. As it turned out, the Dorm Project became very expensive for TA and others. Even with the damages awarded to TA in this action, it will still have lost almost $2.5 million on the Dorm Project according to its job cost report (JCR).’1 OSD and OSSB ended up with a compromised design and reduced capacity for their new facilities and they were delayed in putting them into service for their students. This was not the fault of TA. It was the fault of OSFC in its efforts to build facilities that OSD and OSSB could not afford, and in trusting its agents to carry out the task, agents who often acted in their own interest and not in the interest of the OSFC, or fairly and honestly in their dealings with TA. Il. SUMMARY OF THE FACTS” A. Project History, Funding, Team Building and Planning Because of its experience in the development of K-12 schools throughout Ohio; OSFC was selected to lead the effort to plan, design and construct the OSBD Project, ‘McCarthy was TA's expert witness at trial on scheduling and damages. He also helped prepare TA's supplemental certified claim submitted on November 7, 2012 (TA-0659). “There were two job cost reports (JCRs) admitted at trial: a March 8, 2012 JCR submitted in support of TA's first certified claim submitted on March 8, 2012 (TA-0592/TRANS00001 4-TRANS000087) and a September 30, 2012 JCR submitted in support of TA’s supplemental claim submitted on November 7, 2012 (TA-0659-44 Tab C2 and TA-0659-57 Table C3, Job Cost Transaction Report). Unless indicated otherwise, reference to the "JCR" herein means the September 30, 2012 JCR and corresponding Job Cost Transaction Report). ‘Additional facts relevant to specific issues are set forth in more detail in the discussion of the parties' claims, defenses and counterclaim. EXHIBIT C (Page 5 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 08232 - R6 —_- || COURT OF CLAIMS 205 SEP 17 PH G42 Case No. 2013-00349 -6- DECISION including the Dorm Project, adhering to the extent possible, to the requirements and guidelines of the Ohio School Design Manual (TA-1300)."* This was not a typical project for OSFC in that no school district was involved and it had never built or administered the building of residential wood frame buildings. Several witnesses described it as "unique" because of its wood frame residential character and limited funding. The manner of funding differed from previous school building projects administered by OSFC, because the funding for the OSBD Project came through the state Capital Bill for OSD and OSSB and not through local funding by a school district in combination with OSFC funds (TA-0022). In the event of a budget shortage, there was no additional funding to pay for any additional costs, including contractor claims such as TA's.* In 2006, according to the testimony of Richard Hickman (Director Hickman), then Executive Director of OSFC, funds for the planning, design and construction of new school facilities for the OSSB and OSD were provided through the state Capital Bill.’ Construction of the OSBD Project was initially planned for a single campus combining both schools on a common site and the budget was established accordingly."® This single campus concept was advocated by Governor Taft's administration based on other states that had done the same. When Governor Strickland took office in 2007, ‘Very little of the School Design Manual was applicable to the dorms because it did not cover residential construction. However, what was applicable was the objective of the construction documents phase. The manual clearly states that “These documents are submitted for agency approval for the issuance of a building permit.” (TA-1300/000061). “During early planning, OSFC explained that funding of the Project would not be typical of an OSFC project and that a “second safety net" consisting of investment income accumulated during the planning, design and construction of the project would not be available in the event of cost overruns (TA- 0014). See also, TA-0165. "Director Hickman was Executive Director of OSFC in 2005-07 when the planning and design of the Project began and again in 2011-14 during construction. He testified that when he returned to OSFC as its Executive Director in 2011 he was surprised that the Project was not completed. "at the time, OSSB and OSD were operated on separate campuses divided by an impassable ravine and had operated like this for years. EXHIBIT C (Page 6 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R65 COURT i GLAIMS —IMISSEP 17 PH Ueu2 Case No. 2013-00349 -7- DECISION Officials of OSD and OSSB convinced his administration to keep the campuses separate. However, the budget was never adjusted to accommodate a separate campus for each school, which would, all other things being equal, be more costly and the schools and OSFC realized this (TA-0026). During the planning, design and construction of the OSBD Project, the budget was approximately $43-44 million, of which approximately $8.4 million was ultimately spent on architectural and construction management services, so-called “soft costs." (JX-H-63/21).'” OSFC hired Bovis Lend Lease (LL) to serve as the construction manager and Steed Hammond Paul (SHP) to serve as the architect’? LL and SHP were authorized agents of OSFC during planning, design and construction of the Dorm Project. LL and SHP had considerable experience working with OSFC on K-12 school facilities throughout Ohio, but had no experience working with OSFC on a project with a fixed budget. Neither SHP nor LL had ever designed or administered the construction of any wood frame dormitories for OSFC. Both LL and SHP were authorized to and did engage consultants to assist them in providing their respective services to OSFC. Because SHP did not design wood frame residential type projects it hired Berardi + Partners, Inc. (Berardi) to prepare the housing design/architectural drawings.'® After the fact, OSFC, and LL in particular, are critical of TA as not being experienced in OSFC projects and public improvements generally. However, LL presumably satisfied itself that TA was qualified to build the dorms through the post-bid interview process and recommended that OSFC award it the general trades contract. "By June 20, 2013, only $32.3 million had been spent for construction costs of the original bid/estimate of $37 million. On the other hand, almost $8.4 million had been spent on architectural and construction management services when the original estimate for such services was $6.5 million. Remaining funds amounted to $2.8 million, of which a substantial portion consisted of funds wrongfully withheld from TA. (JX-H-63/21) *8Both LL and SHP are third-party defendants in this action. *8SHP hired other design consultants for civil, structural, electrical, mechanical, etc., but their services are not particularly relevant to the issues. EXHIBIT C (Page 7 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R66 COURT OF CLAIMS TutS SEP 17 PMG h2 Case No. 2013-00349 -8- DECISION TA's references included a broad range of successfully completed wood frame type projects, including commercial projects, a dormitory for Ohio Dominican University, a condominium complex, 12 story hi-rise apartments, and custom homes (TA-0145/6). TA also furnished references to OSFC, confirmed by LL, which demonstrated that TA had a good reputation as a contractor (TA-0146 and TA-0147). TA's president, William Koniewich, had 30 years experience in construction starting as an estimator, then vice president and ultimately as president of TA. He was on site regularly during construction and was knowledgeable and forthright in his testimony. Among LL, SHP and OSFC, TA was probably the most experienced entity with this type of wood frame residential construction.2° Robert Grinch (Grinch) was designated as the project administrator for OSFC to oversee the OSBD Project. In Spring 2007, to facilitate the planning, design and construction of the OSBD Project, a Core Team was formed consisting of representatives from OSD, OSSB, OSFC, the Ohio Department of Education, Office of Budget & Management, LL and SHP. The Core Team held its Meeting No. 1 on May 2, 2007 (JX-H-01). At this first meeting, according to witness Clay Keith ("Keith"), Michael Shoemaker, then Executive Director of OSFC announced: "We do not want to do the Ready, Fire, Aim. We want to be Ready, Aim, Fire" (TA-0584). Ready, Aim, Fire in construction parlance means: Plan, Design, Build, a traditional, logical and efficient method of construction. Ready, Fire, Aim, on the other hand, means Plan, Build, Design, every public (and private) owner's fear. Ready, Fire, Aim probably best describes the way the OSSB and OSD dorms were planned and built. In other words, the Dorm Project design was completed "on the fly" after award of the contract and ?° Josh Wilhelm, TA's project manager was hired by TA to manage the construction of the dorms. He did have experience on OSFC projects and he was well educated, trained and experienced in project management. In addition, he worked as a carpenter during college at Bowling Green where, in 2001, he earned a B.S. in construction management. He also was a knowledgeable and forthright witness. Smith also had some experience with wood frame construction, but not design. EXHIBIT C (Page 8 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R6 _ cou OF ans 2ISSEP 17 PM 42 42 Case No. 2013-00349 -9- DECISION during construction rather than being sufficiently complete and approved at the time bids were solicited.?" Core Team Meeting No. 1 was the first of 33 consecutive and documented meetings of the Core Team at various intervals through July 15, 2010. Curiously, no meeting minutes of Core Team meetings were offered by the parties as joint exhibits reflecting meetings from July 15, 2010 until May 11, 2011.7 Thereafter, the Core Team met at least another 20 times at various intervals through June 20, 2013. TA did submit the minutes from an executive partnering session held on March 10, 2011, which reflected serious problems with the budget. This meeting appears to have been attended by the some of the members of the Core Team. Budget constraints shaped the OSBD Project almost immediately and heavily influenced decision making by OSFC, LL and SHP during the planning, design, bidding and construction processes of both the dorms and academic facilities, as well as the Campus-wide Bid Packages. The OSBD Project was fragmented and constructed in several phases, due in part to budget constraints, design issues and poor scheduling. Many of these issues were brought about by competing interests between the OSD and OSSB as to what each school wanted from their new facilities and led to the scheduling problems. B. Dorm Project Bidding. In or about Spring 2010, site work was underway by separate prime contractor(s) to assure that building pads and underground utilities would be available for construction of the dorms and academic buildings. In June 2010, SHP submitted plans for sixteen dorms (eight on each campus) for review and approval by the Ohio "Approved means an unconditional certificate of plan approval in hand from DIC. 2vhile it is not clear why the minutes between July 15, 2010 and May 11, 2011 were not available, these minutes would have shed more light on why OSFC went out to bid in October with plans that had not been approved by DIC. They also would have been helpful in better understanding the schedule pressures that OSFC was dealing with at the time. EXHIBIT C (Page 9 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R6 - _. _ COURT OF CL Ais 21S SEP 17 PH Uz 42 Case No. 2013-00349 -10- DECISION Department of Commerce, Division of Industrial Compliance (DIC).?7 On these plans the “Construction Type" was shown as V-A (also sometimes shown as 5A on related documents) and the design included one-hour fire rated exterior and interior walls (TA- 0900, Sheet LS101). Knowing that it did not yet have plan approval for the dorms or academic buildings, OSFC nevertheless solicited bids by issuing the unapproved plans for construction of the dorms and academic buildings for bid opening on July 22, 2010 (Bid #1) based on assurances from SHP that plan approval was forthcoming and that SHP would take steps to promptly address any issues presented by DIC in the approval process (TA-0084). However, because the bids came in at almost 40% over the advertised estimate they could not be accepted as a matter of law and OSFC did not have such funds in its Budget to award contracts that were 40% over the advertised estimate (TA-0129/3). On July 29, 2010, DIC issued its first partial plan approval for the dorms that was contingent on a complete and adequate response to 13 items outlined in Correction Letter No. 1 accompanying the approval (TA-0091/7). Correction Letter No. 1 listed a compliance date of August 28, 2010. SHP never responded to Correction Letter No. 1 prior to the re-bid of the Dorm Project on October 28, 2010 (Dorm Bid #2).2* Notably, each sheet on the approved plans had the red DIC partial approval stamp and limitation language on it (TA-0900). OSFC/LL did not issue these partially approved plans when bids were solicited for Dorm Bid #2, nor were they disclosed to the bidders. Instead, bidders were issued altered plans that had not been approved by DIC as explained below. The plans were dated 12/15/09 for "Permit and Review" and 4/16/2010 for "Permit and Bid” and yet from the evidence, it appears they were not submitted to DIC until June 1, 2010 for "Permit and Review." There was no explanation of why there was a 6 month delay in submitting the plans. SUP did respond later in December 2010, and additional drawings for the dorms were submitted to DIC during 2011 and 2012 for approval. EXHIBIT C (Page 10 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R69 count OF Lats “ms SEP 17 PH G42 Case No. 2013-00349 -11- DECISION After Bid #1, the academic buildings required considerable redesign and refinement before they could go out for bid again, and given the budget pressure at the time, OSFC decided to proceed with Dorm Bid #2 separately in order to more accurately evaluate its impact on the budget for the academic buildings. As with bids for the academic buildings, the Campus-wide Bid Packages common to both the dorms and the academic buildings were not solicited until long after construction began on the dorms, and were delayed several times due to design/budget issues. It was generally understood by SHP and LL that any delay in the award of contracts for the Campus- wide Bid Packages would adversely impact the contractors’ ability to complete the dorms on schedule (TA-0162/2). In order to better manage the budget, OSFC/SHP/LL took at least three steps before soliciting bids for Dorm Bid #2: 1) They decided to bid the dorms only and see how much money would remain in the budget for the two remaining phases, the academic buildings and the Campus-wide Bid Packages; 2) They reconfigured the base bid to provide for six dorms on each campus for a total of twelve dorms rather than sixteen as with Bid #1.> This eliminated a total of four dorms (and their attendant costs) from the base bid, potentially reducing the pressure on the budget. The four deleted dorms (OSSB4, OSSB8, OSD4 and OSD8) were instead bid as alternates so the OSFC could see what they would cost separately, and if the cost was within the budget OSFC could accept them, but if not it could at least proceed with construction of the twelve ?5Each campus consisted of three elementary/middle school dorms and three high school dorms. EXHIBIT C (Page 11 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R7 QUIS SEP 17 PM Us 42 Case No. 2013-00349 -12- DECISION dorms without further delay. Ultimately, the bid alternates for the four dorms were not accepted;”6 3) They "value engineered" the design of the dorms.?” While SHP may have implemented other opportunities during this process, the one identifiable action it took was to substantially alter the plans for which it had obtained approval from DIC on July 29, 2010. This alteration changed the fire-resistance construction type from V-A to V-B. (The building type V-A was noted on the original Certificate of Partial Plan Approval as 5A, [TA-0091], and as V-A on the plans (TA-0900, Sheet LS100), but when the plans were altered the building type was noted as V-B on the bid set (TA-0901, Sheet LS101). This was a significant and material deviation from the partial plan approval issued by DIC on July 29, 2010. Not only was the fire-resistance construction type changed, but this change permitted SHP/Berardi to delete the one-hour fire rated exterior and interior walls approved by DIC in July. These changes become apparent when sheets LS101, LS101a and A002 of the plans for Dorm Bid #2 are compared with the July 29, 2010 partially approved plans (TA-0901 and TA-0900, respectively).”° The alteration is represented in TA-1421, TA-1422 and TA-1423. Such alteration ©The four deleted dorms, OSD4, OSD8, OSSB4 and OSSB8 remained on the bid schedule and all recovery schedules during construction, which, according to TA's expert, Don McCarthy was confusing and not a good practice from a scheduling standpoint. ?7According to the U.S. General Services Administration "[vjalue engineering can be defined as an organized effort directed at analyzing designed building features, systems, equipment, and material selections for the purpose of achieving essential functions at the lowest life cycle cost consistent with required performance, quality, reliability, and safety." http:/Awww.gsa.gov/portal/category/21589. In other words, acceptably less expensive. 28aithough it was not mentioned at trial, this seemed particularly disconcerting considering these dorms were being constructed as living quarters for deaf and blind children who, in the case of a fire, would be at a disadvantage that in some instances only time could protect them from. To the court, this is an example of how unrealistic budget pressures led to poor decision making on this project by OSFC, SHP and LL. ?8it is apparent to the court, but would not have been apparent to TA at the time it submitted its bid or during construction, because TA did not know about the partial approval by DIC in July 2010. EXHIBIT C (Page 12 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R7 __ ma 2015 SEP 17 PH Ut 42 Case No. 2013-00349 -13- DECISION was not disclosed to TA at or before Dorm Bid #2 or when TA entered into the Contract with OSFC and the alteration was not submitted or disclosed to DIC for approval prior to Dorm Bid #2. The fact that SHP did not include DIC's stamped plan sheets in the bid set that were not changed is evidence of an intent to conceal the fact that there was only partial approval for the plans or that the plans had been altered. Consequently, when it solicited bids for Dorm Bid #2, OSFC issued plans to the bidders that had not been approved by DIC. The fire-resistance changes were more akin to "bid engineering" than "value engineering" because ultimately DIC caught SHP in this scheme and required one-hour fire rated walls between the dorm rooms as well as other fire protection components.*° These altered plans also resulted in a protracted, confusing and expensive series of events for OSFC and TA and it led to dimensional framing issues, extensive reworking and unnecessary confusion for TA during construction, much of which could not be fully realized in the scope of any change orders.*" Not knowing about the altered plans for Dorm Bid #2 and that OSFC did not have plan approval at bid time, TA submitted its bid for the general trades contract for the Dorm Project.2_ TA was the apparent second low bidder and its bid was within 2% of the published estimate. TA's overall bid was reasonable according to Keith and other By “bid engineering" it is meant that SHP and its consultant, Berardi, made a change to the drawings that would help to reduce the bid estimate and therefore the bids, but in the end it was nothing more than a ruse because it led to almost $100,000 in change orders (JX-F-25 and JX-F-26) as well as other costly life-safety requirements. “It is hard to appreciate just how confusing the plans were, but a good example is revealed in an email from LL/Keith to SHP/Predovich on July 27, 2011, over three months after TA had mobilized to the job site (TA-0410), referring to a recent inspection, "[hJe is not going to sign off or approve any further inspection requests until revised/updated/stamped drawings are available for review." This was in reference to the DIC inspector's confusion over the drawings. 2The partial plan approval by DIC was useless to OSFC at the time of the second bid opening because of unapproved changes made to the plans by SHP. There was no evidence that DIC was made aware of these material changes or approved of them at the time bids were solicited for Dorm Bid #2. EXHIBIT C (Page 13 of 140) Franklin County Ohio Clerk of Courts of the Common Pleas- 2018 Jul 13 9:44 AM-17CV001032 0E232 - R7 COURT OF CLAIMS 2015 SEP 17 PM Ge h2 Case No. 2013-00349 -14- DECISION witnesses. The apparent low bidder was allowed to withdraw its bid based on a mistake it claimed it made when preparing its bid. TA was then selected as the next low bidder and after completing post-bid interviews with LL, and receiving the recommendation of LL, OSFC awarded TA the Contract for the general trades work, which was executed on December 20, 2010 (JX-A). C. Dorm Project Construction Drawings. Weeks before TA signed the Contract it requested revised and complete drawings and SHP/Berardi promised to issue such drawings including all changes to date (TA-0164). These changes were extensive and consisted of well over 100 specific changes to the drawings, substantial changes to the technical specifications and over 150 pre-bid RFls, many of which affected the drawings.** While the bid set of plans may have been sufficient upon which to submit a bid, they were not full and accurate nor were the details easily understood so as to be sufficient for construction. To the contrary, the drawings were described by various witnesses, including representatives of OSFC, SHP and LL, as flawed, useless, worthless, trash, confusing and any number of other adjectives, none of which are synonymous with unambiguous, full, accurate or easily understood. 58 more detailed explanation is set forth below in "Problems with the Drawings." SRF] (Request For Information) is a process to obtain clarification or interpretation of the Contract Documents (JX-B/14, General Conditions (GC) 2.2.2). The inquirer (usually a bidder, contractor or the construction manager) submits a specific form (RFI) setting forth the question, the date a response is needed and any suggested solution. On this project, RFls were submitted through LL's construction management software, Prolog Manager. Once the contract is awarded and executed, the architect then is required to answer an RFI within three business days of receipt as provided in GC 2.2.2.2 (JX-B/15). As can be seen from a review of the RFI Log (JX-L), SHP rarely responded to RFls within three business