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Kenny Const. Co. v. Sanitary District

AUGUST 17, 1970.

KENNY CONSTRUCTION COMPANY OF ILLINOIS, AN ILLINOIS CORPORATION, ALSO KNOWN AS KENNY CONSTRUCTION COMPANY, AN ILLINOIS CORPORATION, PLAINTIFF-APPELLEE, CROSS-APPELLANT,

v.

THE SANITARY DISTRICT OF GREATER CHICAGO, DEFENDANT-APPELLANT, CROSS-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. GEORGE FIEDLER, Judge, presiding. Reversed.

MR. PRESIDING JUSTICE BURMAN DELIVERED THE OPINION OF THE COURT.

Rehearing denied September 14, 1970.

This is an action commenced by the Kenny Construction Company (hereinafter referred to as "Kenny") against the Metropolitan Sanitary District of Greater Chicago (hereinafter referred to as "District") to recover an adjustment of the price of a sewer construction contract necessitated by allegedly unforeseen and unexpected subsurface conditions. The defendant waived a jury, and the case went to trial on May 13, 1968. Testimony was concluded on June 10th. A judgment was entered in July for the plaintiff in the amount of $131,237.71, from which defendant appeals. Plaintiff cross-appeals as to the adequacy of the amount awarded.

In 1958 the District advertised for sealed bids for the construction of a sewer in Wheeling Township, Cook County, Illinois, which was to connect with an existing intercepting sewer. All of the plans and specifications were made available to plaintiff and the other prospective bidders. The nature of the construction job was partially described as follows:

The work consists of building approximately 8,100 linear feet of concrete sewer of 4 feet 6 inches internal width and 5 feet internal height in tunnel, three junction chambers and one transition with manholes and miscellaneous structures and work collateral thereto . . . Portions of this work may require the use of compressed air due to bad soil conditions to be encountered in tunneling.

Kenny had much experience in sewer construction for the District. Before preparing its bid its personnel read the contract documents, specifications and plans. They went to the site, looked at the job from the standpoint of obstructions, reviewed the soil borings in the District's files, including information of soil samples, and made their own soil borings. They ultimately submitted a bid of $1,138,250.00 which was the lowest bid of the six interested bidders in the computation of the unit and lump sum prices set forth in the contract and their bid was accepted.

The general provisions of the contract contained the following:

Extra work.

Art. 7. The Contractor shall perform such extra work as the Engineer may direct in his written order, provided that no extra work, the total price or cost of which is in excess of Twenty Five Hundred Dollars ($2500.00), shall be performed by the Contractor until the Engineer is authorized by the Board of Trustees of said Sanitary District to issue a written order therefor, and shall have issued such written order. . . .

The provision further requires that all claims for extra labor, rental of equipment or material furnished must in any event be presented to the engineer and to the Trustees' committee on engineering within thirty days after the end of the month during which such extra work was done. Under the heading of "Estimating Extra Work" appears the following:

RENEGOTIATING: Where unforeseen or not anticipated conditions develop in the construction of this project so that there is a variation of 15 percent in quantities of materials required (either more or less than the original estimates), then either the Metropolitan Sanitary District of Greater Chicago or the contractor shall have the right to demand an examination of the site and immediate renegotiation as to the quantities and amounts.

CHANGED CONDITIONS: Should the Contractor encounter during the progress of the work subsurface conditions at the site materially differing from any shown on the contract drawings or indicated in the specifications or such conditions as could not reasonably have been anticipated by either the Metropolitan Sanitary District of Greater Chicago or the contractor which conditions will materially affect the cost of the work to be done under the contract, the attention of the Chief Engineer must be immediately called to such conditions before they are disturbed. The Chief Engineer shall thereupon promptly investigate the conditions and if he finds that they do so materially differ, the contract may with his written approval be modified to provide for increase or decrease of cost and/or differences in time resulting from such changed conditions. Any increase in costs resulting therefrom should be subject to approval by the Board of Trustees.

The major item in the contract was Item I, providing a price of $109.50 per lineal foot for excavation, the unit price for each item, complete in place. Approximately 3,093 linear feet were completed without any problem by using a method of mining and removing material in free air, then placing steel ribs and hard wood lagging to hold back the earth and finally pouring the concrete. Payments were made by the District as the work progressed.

At another portion of the work, Kenny subsequently encountered bad soil conditions and a cave-in occurred on August 4, when the miners unearthed running sand and silt, i.e. underground water bearing quantities of fine unstable particles of soil. Kenny's engineer testified that the job called for both free air and compressed air and that they knew they would need compressed air for ...


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