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Resd Instructions on Ratvcrsc Side ok copy

Please paint in ink or type

BEFORE THE STATE CLAIMS COMMISSIONOf the State of Arkansas

Mr Do Not Write ta These Spsces

11—0687—CCJMs.

JMiss DUIT CONSTRUCTION CO., INC. Datnfahst 11ay 2f111

_______

matH (M.aSh( (Day) (aar)

6,556,372.43vs Arnoaaflol(buoS

State of Arkansas, Respondent j Fond AliT))AR Highway & Transportation

Breach of ContractCO M P L A I NT

Duit Construction Co., Inc. ,thho,.adChU..a,of52°Industrial Blvd. Edmond(Sired o R F D & No.)

OK 73034 (405) 340602jountyof rep nt.dbyJack East_Ill(Sian) (lip Coda) (Daytime Iliona No) (lal C.saisel, if any, for 0mm)

,, 2725 Cantrell Rd., Ste. 202 Little Rock AR 72202 501—372—3278 501—376—0949, ,(Steed and No) (City) (State) (Zap Coda) (Phone No) (Fox No)

Arkansas State H’way Couunmn andState aene tarolvad Arkansas Highway T sperta-tiom Bept. Amount 000ht ,552243

Month,dy,yearand pheeofhscWtike 2002—2006

Explanation See Complaint attached — —

*Orlgjnal CITnsfII! December 2B, 6ndAugust 31, 2007.

Order of Nonsuit entered_May7 2010. See attached - -

Aopoaisof1hiscosiIa,nt, the ctmmani makmthedatnnmts. and answmsthe Iolkmangquouiuu, an ded (I) Hood.,,,, ban_i pam Lo any Satedqaentmmt o,Yes Witham? AHTD Chief Engineer(Yea or No) (Muath) (Day) (Year) . . 4

- andth.tthefomgansanwostakozthueam Claims denied y etters dated

_g22._2OO6, September 2O,20nd_Iun22OflL_____and that $ 0 was paid thereon. (2) Has any Ihani pmscss or zorporatam an rnterou ua than daun? jQ

______

if so, Sate name and adams

(Nam (StreatorRFD&No.) (Cay) (State) (ZapCode)andthatthenaturethaeofisasfollows

—

andwssaopnredon — anthefol1msuagmuma-

THE UNDERSIGNED states on oath that he or she Is familiar with the matters and things set forth In the abexe emapiniat, and that he or she verily behaves

that they are true.

Jack East III

______

(Print ClaLmant/Represantative Name) (Signature of ClaImant/RepresentatIve)

SWORN TO and subscribed before me at I ii1€CQ L

IFFORE THE ARKANSAS STATE CLAIMS COMMISSION

I)UIT CONSTRUCTION CO., INC. CLAIMANT

V NO

________

ARKANSAS STATE HIGHWAYCOMMISSION and ARKANSASHIGHWAY AND TRANSPORTATIONDEPARTMENT RESPONDENTS

COMPLAINT

Comes now claimant, Duit Construction Co., Inc. (Duit), and for its claims against the

Arkansas State Highway Commission (ASHC) and Arkansas Highway and Transportation

Department (AHTD) state and aver as follows:

1, Duit is a corporation duly organized and existing under the laws of the State of Iowa. Duit

is, and at all relevant times was, authorized to do business in Arkansas.

2. Duit is a highway and “heavy” construction firm. It was organized in 1969 and it has

successfully completed over 20 interstate highway projects in Oklahoma, Arkansas, Texas and

elsewhere.

COUNT I

3. On or about August 19, 2002 Duit entered into a construction contract with the ASHC for

State Job No. B60 120 requiring Duit to perform the following scope of work in Saline and Pulaski

Counties, Arkansas from Log Mile 125.60 to Log Mile 129.71 on 1-30:

RECONSTRUCT TWO PAIR OF MAIN LANE BRIDGES, TWO FRONTAGEROAD BRIDGES, TWO OVERPASS BRIDGES, 4.11 MILES OF EXISTINGMAIN LANES AND AN ADDITIONAL LANE IN BOTH DIRECTIONS ON 1-30[N SOUTH LITTLE ROCK. THIS PROJECT CONSISTS OF EARTHWORK,

AG(iRE( IA IF BASE (‘Or RSE. p( ‘C PAVEMEN’I’, (‘ONCREFE BARRIIRWAI.LS. (II ARD RAIL, ASPI IAL l’CON(’RETE hOT MIX SI JRFACEC()t IRSE.FOL JR MAIN LANE (‘ONT. COMP. W-I3EAM UN! F BRIDGES (182.12 Fl’. OR0.034 Ml., 142.25 FT. OR 0.027 Ml.). DRAINAGE S’I’RtJCT(JRI3S, EROSION(‘ONI’ROL I’! EMS, MAINTENANCE OF I’RAFFIC ANt) MIS(’. I’I’FMS,

A true copy of the Contract form and Schedule of Prices is attached as Exhibit A. The remainder

of the Contract documents are not attached because they are voluminous, hut they will he made

available on request.

4. Duit also promised the ASHC and AHTI) to finish the scope of work within 226 working

days subject to such extensions as may be justified. The contract contained a Liquidated Damages

Clause imposing $2,085.00 in working day charges if Duit failed to finish on time, arid $15,000.00

per working day in Road User “Costs” in the event Duit failed to comply with Special Provision

requirements of the Contract.

5. In September 2002. Duit participated in a pre-construction meeting where it submitted all of

its plant and staging requests to ASIIC’s agent, PBS&J. which approved the requests. On September

16, 2002, Duit received a Notice to Proceed and promptly began construction. Duit substantially

completed construction of the Project on April 21, 2005.

6. Based on information represented in the Contract Documents and its extensive experience

on similar projects, Duit prepared its bid and developed its Plan to perform the work based on

ASHC’s representations in the Plans and Specifications. Specifically, AS! IC specified that the

Project be constructed in stages, with provided quantities and locations for the various pay items in

the Contract Documents. Based on Contract Document representations and in reliance thereon, Duit

hid the unit prices for the Project and planned to accomplish the work in 226 working days.

7. The bid documents were materially false and misleading because they do not indicate any

undercutting or “had” soils would be encountered.

-2-

ASHC and Ailil) knew of unsuitable soils at the Project Site, and knew the Job [360120

contractor would have to perform significant undercutting or soil stabilization. Al{I’D and ASHC

had a duty to reveal this knowledge to Job B6() I 20 bidders. Such omission was intended to mislead

bidders.

9. Throughout [)uit’s performance ofearthwork construction, it encountered site conditions that

differed materially from what had been represented in the Plans. As a result. Duit was fbrced to

perlbrm extensive undercut operations and replace the unsuitable soil with acceptable material.

10. Based on the Plans and Specifications, and material quantities stated therein, Duit could

never have anticipated the significant quantity of unsuitable soils it encountered and the substantial

undercut work it had to perform to make the subgrade suitable. None of the Contract Documents

identified unsuitable soil conditions, Additionally, Duit was forced to move significantly greater

quantities of material for roadway excavation and embankment than what was represented in the

Contract Documents.

11. Although the Contract included a pay item for 20,000 tons of’Stone Backfill,” it was an “If

and Where Directed Item.” This contingency item notwithstanding, AHTD’s Plans and

Specifications grossly understated the amount of embankment material that would be required. The

Plans also specified a soil stabilization bid item as a contingency with only 1,000 tons allocated for

the entire Project and a note stating the Engineer would determine its placement. Nonetheless,

AHTD did not identify unsuitable soil locations in the Plans and Specifications.

12. The unsuitable soils subgrade modifications and the roadway earthwork resulted in a gross

overrun in quantities of material. By the end ofconstruction, subgrade modification required 10,842

tons of stone backfill and 8,302.2 tons of soil stabilization, and the amount of excavation and

compacted embankment material exceeded 132,000 cy. The material quantities exceeded the pay

unit amounts ibr excavation, compacted embankment, and soil stabilization by the unpredictable

amounts ol I óO’o, 2O%, and 830.2% respectively. Additionally, these grading overruns

significantly changed the character of Duit’s work. In short, while the actual completed Project is

consistent with what was designed. the work necessary to construct the Project was significantly

greater than, and nothing like, the design represented.

13. lhe extra work and changes in the character of the work Duit encountered as a result of the

unsuitable soil suhgrade modifications, roadway excavation and embankment increased scope,

significantly extended the duration of construction, and severely impacted Duit’s ability to perform

the unchanged original scope of work.

14. Based on what had been represented in the Plans, Duit planned on performing the work in

a continuous flow for long stretches of roadway sections and made its bid accordingly. However,

the extra subgrade modifications, 114 undercut locations and additional roadway earthwork caused

Duit to start, stop and rework many locations. These interruptions prevented Duit from

accomplishing the work in the efficient linear method as planned.

15. Due to the fact that the Contract and bid documents failed to accurately represent the

unsuitable soils and embankment work, Duit suffered a large loss of daily production and a huge

increase in the amount of subgrade preparation, material and loads of borrow required.

16. ASHC and AHTD expressly and impliedly warranted to Duit that if the Plans, Specifications

and other Contract Documents were followed the construction work could be completed within a

reasonable time.

1 7. ASHC and AHID violated its express and implied warranties of suitability of the Plans,

Specifications and other Contract Documents by misrepresenting soil conditions. Further, ASHC

and AIITD violated the implied duty of cooperation h fulling to cooperate with Dolt during

construction to remedy soil conditions through soil stabilization or other appropriate measures.

18. ASHC and Al lTD owed Duit and other interested bidders the duty of fully disclosing and

revealing subsurface soils conditions and geotechnical reports indicating substantial undercutting

should he expected. ASHC and AlITD breached the duty of full disclosure by failing to reveal

geotechmcal reports indicating substantial undercutting should be expected. That failure to disclose

was done with the purpose of deceiving bidders concerning subsurface conditions.

19. The large amounts of unsuitable soil, and the undercutting and soil stabilization necessary

to address said unsuitable soil, was a significant change in the character of the work entitling Duit

to an upward adjustment in the contract price to compensate Duit for the additional expense relating

to the unsuitable soil.

20. Actual job conditions differed materially from those indicated in the bid documents resulting

in increased costs to Duit and, therefore, t)uit is entitled to additional compensation under the

Contract differing site conditions clause.

21. Duit gave sufficient notice of its Differing Site Condition claim to Respondents. In addition,

Respondents waived formal, specific written notice ofa changed condition regarding unsuitable soil

by their conduct indicating:

a) full and accurate knowledge of the unsuitable soil prior to any work by Duit to

remove it:

h) actual knowledge that Duit considered the unsuitable soil to be a differing site

condition for which I)uit intended to seek additional compensation; and

c) positive instructions to Duit as to how to proceed with the removal and replacement

of the unsuitable soil.

-5-

22. Flie extreme disparity between bid quantities and actual quantities - coupled with AIFUD’s

Ihilure to address those disparities in a timely, responsible fashion yet continuing to charge l)uit time

during construction - constitutes a cardinal change in the work and a breach of contract.

23. Details ofJoh events are contained in Exhibit B attached entitled Actua1 Events” and Effect

of Actual Conditions on Duit.” Exhibit B is incorporated herein by reference.

24. ASIIC and AHTD’s actions and breaches of contract proximately caused damages to Duit

as follows:

Unclassified Excavation $ 430,317,76Compacted Embankment 349,663.4714” Dowel Jointed Concrete Pavement 757,176.19Compacted Embankment Royalty 51,344.61Cement Treated Base 60,106.75Field Overhead Office 386,910.81Field Supervision and Staff 718,693.90Excessive Equipment Movements 685,975.95Schedule Consultant 40,484.63

Total $3,480,674.07

25. Duit has presented this claim to Al-lTD. It was denied. See Exhibits C & C-i.

26. All conditions precedent have occurred.

COUNT II

27. All material allegations in paragraphs one through twenty-six are restated and incorporated

by reference.

28. On or about March 28, 2002 Duit entered into a construction contract with the ASHC fbr

State Job No. B60122 requiring Duit to perform the following scope of work in Saline County,

Arkansas on 1-30:

DESCRIPTION:THE PURPOSE OF THIS PROJECT IS TO REPLACE HWY. 5/35 & CONGOROAD OVERPASS BRIDGES, RECONSTRUCT THE MAIN LANES AND ADDAN ADDITIONAL LANE IN EACH DIRECTION FOR 3.846 MILES OF 1-30 ATBENTON IN SALINE COUiTY. THIS PROJECT CONSISTS OF

-6-

EAR FIIW()RK, PCC PAVFMENI’, A(IGRF(IA FE BASE (‘OtJRSE, ASPI ILl’CONCREFE hoE MIX BASE, BINDER ANI) SURFACE (OtJRSES, A(‘ONF[NIJO[JS COMP. W-BEAM UNIT OVERPASS BRIDGE (336.18’). ACONTINUOUS COMPOSITE PLATE GIR[)ER OVERPASS BRIDGE (354.19),,\N IXl’FNSION OF A MAIN LANE R.C. BOX CULVERT (0.007 MILES),GUARD RAIL. MAINTENANCE OF FRAFFIC ITEMS, EROSION CONTROLAN[) MISC. ITEMS,

LENGIII: 3.846000 MILES

CONTRACT TIME: 365 WORKING DAYS

CONTRACR)R: DUFF CONSTR. CO., INC.AI)I)RESS: P. 0. BOX 3788

EI)MOND, OK 73083-3788

CONTRACT A MOUNT: $33,761,907.80AMOUNT FOR AWARD CONS IDERA FION: $3 9.236.907.80

LIQUIDATED I)AMAGES: $ 2.085.0() PER WORKING DAYROAD USE COST: $ 15,000.00 PER WORKING DAY

TYPE OF PROJECT: NI-IS

A true copy of the Contract form and Schedule of Prices is attached as Exhibit D. The remainder

of the Contract Documents are not attached because they are voluminous, hut they will he made

available on request.

29. On April 1, 2002 Duit participated in a pre-construction meeting where it submitted all of

its plant and staging requests to Al-I’FD’s agent, PBS&J, which approved the requests. On April 16.

2002. Duit received a Notice to Proceed and promptly began construction. On June 9, 2005 all main

line lanes and all ramps were opened to traffic. Duit completed all pay item work on August 9, 2005.

30. Based on information represented in the Contract Documents and its extensive experience

on similar projects, Duit prepared its bid and developed its Plan to perform the work based on

ASHC’s representations in the Plans and Specifications. Specifically, ASIIC stated that the Project

must be constructed in stages, with provided quantities and locations for the various pay items in the

-7-

Contract Documents. Based on Contract representations and in reliance thereon, 1)uit hid the unit

prices tor the Project and planned to accomplish the work in 365 working days, by performing the

work in a continuous flow tbr long stretches of roadway sections.

31. The hid documents were materially Ihise and misleading because they do not indicate

significant undercutting or “bad” soils would be encountered.

32. AS! IC and AHTI) knew of unsuitable soils at the Project Site, and knew the Job B60 122

contractor would have to perform significant undercutting or soil stabilization . Al-lTD and ASHC

had a duty to reveal this knowledge to Job B60 122 bidders. Such omission was intended to mislead

bidders.

33. Throughout Duit’s performance ofearthwork construction, it encountered site conditions that

differed materially from what had been represented in the Plans. As a result, Duit was forced to

perform extensive undercut operations and replace the unsuitable soil with acceptable material.

34. Based Ofl the Plans and Specifications, and material quantities stated therein, Duit could

never have anticipated the significant quantity of unsuitable soils it encountered and the substantial

undercut work it had to perform to make the subgrade suitable. None of the Contract Documents

identified the location of unsuitable soil conditions. Additionally, Duit was forced to move

significantly greater quantities of material for roadway excavation and embankment than what was

represented in the Contract Documents.

35. Although the Contract included a pay item for 20,000 tons of “Stone Backfill,” it was an “If

and Where Directed Item.” This contingency item notwithstanding, AHTD’s Plans and

Specifications grossly understated the amount of embankment material that would be required. The

Plans also specified a soil stabilization bid item as a contingency with only 1,000 tons allocated for

the entire Project and a note stating the lngineer would determine its placement. Nonetheless.

AIITD did not identify unsuitable soil locations in the Plans and Specifications.

36. ihe unsuitable soils suhgrade modifications and the roadway earthwork resulted in a gross

overrun in quantities of material, By the end of construction, suhgrade modification required

4.46707 tons of soil stabilization, and the amount of excavation and compacted embankment

material exceeded 218,361 cy. Additionally, these grading overruns significantly changed the

character of [)uit’s work. In short, while the actual completed Project is consistent with what was

designed, the work necessary to construct the Project was significantly greater than, and nothing like.

the design represented.

37. The differing site conditions and changes in the character of the work Duit encountered as

a result of the unsuitable soil subgrade modifications, roadway excavation and embankment

increased scope, significantly extended the duration of construction, and severely impacted Duit’s

ability to perlbrm the unchanged original scope of work.

38. Based on what had been represented in the Plans, Duit planned on performing the work in

a continuous flow for long stretches of roadway sections and made its bid accordingly. However,

the extra subgrade modifications, 62 undercut incidents and additional roadway earthwork caused

Duit to start, stop and rework many locations. These interruptions prevented Duit from

accomplishing the work in the efficient linear method as planned.

39. Due to the fact that the Contract and bid documents failed to accurately represent the

unsuitable soils and embankment work, Duit suffered a large loss of daily production and a huge

increase in the amount of subgrade preparation, material and loads of borrow required.

-9-

40. AS! IC and Al lTD expressly and impliedly warranted to L)uit that if the Plans, Specilications

and other Contract Documents were Ibilowed the construction work could be completed within a

reasonable time.

41 ASI IC and AlITI) violated its express and implied warranties of suitability of the Plans,

Specifications and other Contract Documents by misrepresenting soil conditions. Further, ASHC

and All-I’D violated the implied duty of cooperation by thiling to cooperate with l)uit to remedy soil

conditions through soil stabilization or other appropriate measures.

42. ASFIC and AHTD owed Duit and other interested bidders the duty of fully disclosing and

revealing subsurface soils conditions and geotechnical reports indicating substantial undercutting

should he expected. S!l’ and Al-Ill) breached the duty of hill disclosure by failing to reveal

geotechnical reports indicating substantial undercutting should be expected. That failure to disclose

was done with the purpose of deceiving bidders concerning subsurface conditions.

43. The large amounts of unsuitable soil, and the undercutting and soil stabilization necessary

to address said unsuitable soil, was a significant change in the character of the work entitling Duit

to an upward adjustment in the contract price to compensate Duit for the additional expense relating

to the unsuitable soil.

44. Actual job conditions differed materially from those indicated in the bid documents resulting

in increased costs to I)uit and, therefore, Duit is entitled to additional compensation under the

Contract differing site conditions clause.

45. Duit gave sufficient notice of its Differing Site Condition claim to Respondents. In

addition, Respondents waived formal, specific written notice of a changed condition regarding

unsuitable soil by their conduct indicating:

-10-

a) thu and accurate knowledge of the unsuitable soil prior tO any work by Duit to

remove it;

h) actual knowledge that Duit considered the unsuitable soil to be a differing site

condition for which Duit intended to seek additional compensation: and

c) positive instructions to Duit as to how to proceed with the removal and replacement

of the unsuitable soil.

46. [he extreme disparity between bid quantities and actual quantities - coupled with AHTD’s

failure to address those disparities in a timely, responsible fashion yet continuing to charge Duit time

during construction - constitutes a cardinal change in the work and a breach of contract.

47. Details of Job events are contained in Exhibit E attached entitled “Request for Equitable

Adjustment for Cost Overruns.” Exhibit F is incorporated herein by relèrence.

48. ASHC and Al-lTD’s actions and breaches of contract proximately caused damages to Duit

as follows:

ljnclassified Excavation $ 606,116.81Compacted Embankment 429,028.39Compacted Embankment Royalty 10,618.5014” Dowel Jointed Concrete Pavement 536,309.78Field Office / Overnight Expenses 480,534.50Field Supervision and Staff 702,640.80Excessive Equipment Movements 290,761.36Working Day Analysis Consultant 19,688.22

Total Amount Requested $3,075,698.36

49. Duit has presented this claim to AHTD. It was denied. See Exhibit F.

50. All conditions precedent have occurred.

51. I)uit originally presented these two claims in cases 07-0575-CC and 08-0158-CC. Duit has

voluntarily non-suited those claims one time. The Commission entered its Orders non-suiting those

claims on May 7. 2010. Duit has refiled them within one year as allowed by law and the Rules of

Civil Procedure. Blavi’ock v, 5hearson Lehman Brothers, Inc., 330 Ark. 620, 954 S.W.2d 939

1997); Rule 41 (a), ARCP; Newbern Watkins and Marshall. Civil Practice and Procedure Vol. 2 (51h

Ed., 2010), § 27:4.

52. Duit voluntarily dismissed its claims in 2010 to attempt to obtain flirther relevant evidence.

Duit has always intended to pursue these claims.

WHEREFORE, Duit Construction Co., Inc. prays it have and recover the sum of

$6,556,372.43 and for all other appropriate relief, including interest.

Respectfully Submitted,

t1II2725 Cantrell Road, Ste. 202Little Rock, AR 72202(501) 372-3278Bar ID No. 75-036

STATE OF ARKANSAS ))SS

COUNTY OF PULASKI )

SUBSCRIBED and SWORN to before me this1 day of May, 2011.

Notary Public(Seal)

,.Iv CommiionE’L,IAMAtDA DAVI*VR

PULASKI cOUNW

NOTAIri r’uuc -

I L1t CflfT1SOfl

L comrrn&on No.

C:\Users\Amanda\DocumentsDUFF - AHC\complaint dut V ashc et aI,wpd — I 2

STATE CLAIMS COMMISSION DOCKETOPINION

6,556,372.4311-0687-CCAmount of Claim $ — Claim No.

AttorneysDuit Construction Co., Inc.

Claimant Jack East, 111, Attorneyvs.

Mark Umeda AttorneyAR Highway & Transportation Dept. Michelle Davenport, AttorneyRespondent RespondentState of Arkansas

May 5. 2011 Breach of contractDate Filed Type of Claim

______________________

FINDING OF FACTS

This claim was filed for breach of contract in the amount of $6,556,372.43against Arkansas Highway & Transportation Department.

Present at a hearing October 20, 2011 was the Claimant, represented by Jack East.III. Attorney, and the Respondent, represented by Mark Umeda, Attorney, andMichelle Davenport, Attorney.

The Claims Commission hereby unanimously denies and dismisses this claim forfailure to prove by a preponderance of the evidence any liability on the part of theRespondent.

Therefore, this claim is hereby unanimously denied and dismissed.

IT IS SO ORDERED.

See Bane of Opinion PornO

CONCLUSION

Upon consideration of all the facts, as stated above, the Claims Commission herebyunanimously denied and dismissed this claim for Claimant’s failure to prove by apreponderance of the evidence any liability on the part of the Respondent.

October 20, 2011Date nf Hprinu

ji,ii,’U11 ui’W JfbU4i PAGE 2/2

JACK EAST HI, P.A.Attorney at Law

relephone (501) 372-3278 - Cantrell Valley PlazaFacsimile: (501) 376-0949 2725 Cantrell Road, Suite 202jeastw@windstream net Little Rock AR 72202

November 11, 201J

Via Facsimile (501) 682-2823 and regular mailArkansas State Claims CommissionATTN: Norman Hodges, Executive Director101 E. Capitol, Suite 410Little Rock, AR 72201

Re: Duit Construction Co., Inc. v. Arkansas State Highway Commission et at.;#11-0687-CC

Dear Mr. Hodges:

Duit Construction Co., Inc. appeals from the decision and order of the ArkansasState Claims Commission dated October 20, 2011 in the referenced cause. This appeal isto the Arkansas General Assembly as provided by A.C.A. 19-10-211.

Please advise if you need anything further from me or Duit Construction to perfectthis appeal.

Sincerely,

Jack East III

JEIII/tlh

cc: Michelle Davenport, Attorney at Law (via regular mail)Duit Construction Company, Inc. (via regular mail)ATTN; Jim Duit

1 4 Z0