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Middlesex Corporation, Inc. v. Fay, Spofford & Thorndike, Inc.

Superior Court of Massachusetts, Suffolk

June 28, 2019

The MIDDLESEX CORPORATION, INC.
v.
FAY, SPOFFORD & THORNDIKE, INC.

          Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Kaplan, Mitchell H., J.

          MEMORANDUM OF DECISION ON JURY WAIVED TRIAL AND ORDER FOR THE ENTRY OF FINAL JUDGMENT

          Mitchell H. Kaplan, Justice

         This case was tried to the court, without a jury, for seven days between February 14, and March 1, 2019. Eleven witnesses testified in person and two were offered by deposition transcript. 82 Exhibits were entered in evidence. Following the close of evidence, the parties submitted post-trial memoranda. Closing arguments were heard on March 29, 2019.

         In consideration of the evidence entered and the reasonable inferences drawn from it, the court finds the following facts, by a preponderance of the evidence, and makes the following rulings. It then orders that judgment enter in the form set out below.

         FACTS

         The Project

         This case involves the construction of the Kenneth F. Burns Memorial Bridge over Lake Quinsigamond (the Bridge). The bridge connects Shrewsbury and Worcester along Route 9, replacing an existing, outmoded bridge. The construction project included both the Bridge and the roadways approaching the Bridge from the east and west (the Project). The Bridge consisted of two separate steel structures: one for eastbound traffic and the other for westbound. Each was supported by a series of steel arches. The Massachusetts Department of Transportation (DOT) was responsible for the Project, in effect its "owner." Construction began in 2012 and was completed in the Summer, 2015.

         The Parties

         The plaintiff is The Middlesex Corporation (Middlesex). Founded in 1972 as a paving contractor, by 2010 Middlesex was a civil/heavy contracting company engaged in building roadways and bridges. It operates in the Northeast states and Florida.

         The defendant is Fay, Spofford & Thorndike, Inc. (FST). FST was founded over one hundred years ago in Boston. It is an engineering and design firm. In 2015, following the period relevant to this case, FST was acquired by Stantec, Inc.

         Robert Perreira is the president of Middlesex and the son of its founder. David Socci is Middlesex’ vice president of preconstruction. He oversaw the cost estimates used to bid the Project. Robert Pine was Middlesex’ project executive directly responsible for the preparation of the bid documents, including the bid price, and then construction of the Project. He joined Middlesex as a senior project estimator in 2010; by the time of trial he was working for a different construction firm. Evan McCormick reported to Pine. He was the senior project manager, and the lead person on the Project site during construction.

         Len Dzengelewski was the principal-in-charge of the engagement for FST. He was head of the structural engineering division of FST and a member of its board. Brian Brenner was the lead design engineer for the Project. Prior to joining FST, he was a professor at Tufts School of Engineering, where he taught bridge design among other courses. He had also worked with another design firm on the Central Artery Project and other projects. Frederick Mosely is a transportation engineer for FST. His area of specialization is roadway design, and he was responsible for the design of the roadways approaching and on the Bridge.

         The Teaming Agreement, the Bid, and the Contract Award

         The DOT described the bid process for the Project as a "Best Value Design-Build Procurement process." Under this process, the DOT first selected a short list of qualified "Design-Build Entities." Those firms that were short-listed received a Request for Proposal (RFP). In response to the RFP, the bidders were to submit proposals that contained both technical responses, including further advanced preliminary design, and a fixed price bid. The DOT established a preliminary price estimate for the Project of $118 million.

         The design-build approach to bridge construction was relatively new to the DOT and part of its accelerated bridge replacement program. Under this approach, the bidders did not receive a final set of drawings and specifications on which to bid a fixed price. Rather, DOT retained a design firm, in this instance TranSystem, that prepared preliminary drawings, referred to as sketches or, sometimes, the Base Technical Concept, together with technical requirements for the project. The sketches were typically intended to be 25% complete, although that is more a conceptual description than the result of mathematical computation. The bidders then bid a fixed amount for both the design engineering work necessary to complete the design as well as the costs of construction.

         Middlesex approached FST with a view to teaming with FST in an attempt to win the contract for the Project. Middlesex understood that FST had worked on a great many DOT projects in the past, including the Big Dig, and was highly regarded by the DOT. The parties agreed to work together and entered into an Engineering Teaming Agreement (the Teaming Agreement or Agreement) to memorialize their relationship.

         The Teaming Agreement was a written contract prepared by Middlesex. The parties executed it effective July 19, 2010. In the Agreement, Middlesex was identified as the Design/Builder and FST as the Engineer. The recitals to the Agreement explained that "the Design/Builder requires the services of a qualified professional engineer to assist it in preparing the proposal and thereafter, if awarded a contract, to carry out the professional engineering services required for completion of the Project." The Agreement provided that the Engineer would be responsible for organizing, formatting text and preparing the required graphics for Middlesex’ proposal in response to the RFP. Among many other obligations, the Engineer was to provide professional services required for "additional preliminary design" sufficient to enable the Design/Builder to prepare cost estimates for the Project, but was not required to perform additional design beyond what was required under the RFP for a responsive proposal. The Engineer was to be paid at an hourly rate for its work preparing the response to the RFP up to an up-set price, regardless of whether the Design/Builder won the bid, and would receive an additional success fee, if the Design/Builder was the successful bidder.

         The Agreement contemplated the parties entering into a Subcontract for Design Services if the bid was successful. This happened in this case; however, Middlesex’ claims are all based upon an alleged breach of the Teaming Agreement.

         Certain provisions of the Teaming Agreement are central to Middlesex’ claims and are set out here:

9.... The Design/Builder acknowledges that as a design professional, the Engineer’s performance of its service both pursuant to this Agreement and with regard to any services performed as part of a Subcontract for Design Services are subject to a professional standard of care. The Design/Builder and Engineer agree that the applicable standard of care for the Engineer’s services shall be that degree of skill and care normally exercised by practicing professional engineers performing similar services on similar projects under similar conditions. No other representations or warranties, whether express or implied, shall be imputed to the Engineer’s services ...
11. The Engineer will provide its professional opinion regarding the Design/Builder’s construction estimate for quantities and comment on specific items of potential quantity growth, but the Engineer shall not have risk associated with estimate quantities and/or construction pricing. The Engineer will prepare its own independent estimate for use by the Design/Builder in making its assessment of quantities. The Design/Builder acknowledges that such estimates are based upon only limited and conceptual design development derived from the contents and requirements of the RFP. The Design/Builder shall verify quantities or other information furnished by the Engineer and shall use its knowledge and experience as a construction professional in developing its bid and pricing for the work, and shall include in such bid an appropriate degree of contingency for additional cost resulting from the post-award design development and finalization process.

         The DOT did not request that prospective bidders submit Statements of Qualifications until some time in 2011. On November 22, 2011, Middlesex received notification that it had been shortlisted and invited to submit a response to the RFP for the Project. On December 2, 2011, the DOT delivered the RFPs to the short-listed bidders, including the design sketches and technical requirements. The RFP required that the Technical and Price Proposals be delivered on January 20, 2012 at 2:00 PM. The delivery date was later extended to February 10, 2012. Both parties believed the period allotted for the RFP response was very short for such a complex Project, which the DOT and its consultants had been working on for years.

         The RFP also provided that there would be an opportunity for DOT to interview bidders to question them concerning their proposal before the bids were opened.

         The parties understood that FST could only perform additional preliminary design during the bid phase. It was paid only approximately $300, 000 for its work during this phase, in comparison to the $8.6 million it was paid to complete the work under the design subcontract. FST’s focus during the pre-bid design work was to look for areas in which cost savings could be achieved and where Middlesex’ design proposal could distinguish itself from that of the other bidders.

         The Bridge Design

         FST retained sub-consultants to assist it with certain aspects of the Bridge design. One of these firms was T.Y. Lin International (TY Lin). TY Lin is a highly regarded design firm that specializes in bridge design. It is principally located on the West Coast, but had recently opened an East Coast office. The Bridge presented unique engineering problems. The sketches called for a series of steel arches supporting the roadway; however, because the arch design was quite flat, the arches did not actually perform as true arches in resisting the lateral forces distributed to their bases. The sketches called for the Bridge to address these forces with a fixed steel column running across the arches. The design team early on determined that the approach depicted in the sketches was inadequate. The design team adopted a "post-tensioning" system to solve this problem, where tension was applied to lateral structural members during construction. TY Lin had used such an approach in the past, but the FST engineers lacked experience with it. TY Lin recommended that the Bridge deck become a part of this system through the use of stringers (sometimes referred to as drag brackets) that attached the decking to the crown of each arch. It appears that FST went back and forth about incorporating this suggestion, and that there was some question concerning the extent to which this design component had to be resolved in the preliminary drawings that would be included in the bid package. TY Lin expressed concern that this should be brought to Middlesex’ attention both because completion of this part of the design post-award could slow construction and there would be additional costs associated with it. The January 20, 2012 drawings submitted by FST to Middlesex did not include these drag brackets. This point is discussed further below.[1]

         On January 18, 2012, Pine emailed Brenner expressing some concern with the amount of time/money FST was spending on Bridge design and the need to finalize the drawings that would be included in the bid package. His email stated in relevant part:

We discussed the level of detail, particularly for the steel fabrication, at the start of the process and we think it was pretty clear what we needed to get competitive pricing. The vast majority of our requests were for details we expected. We will reconsider each request carefully for here on out and only ask the critical ones. I think the expected overrun in costs is more attributable to the number of times we have designed and redesigned elements of the structure. I could also go on and on about how many times things have changed in the design bit it is not productive nor is it our message. Our message is we need to be done with the design now. We need to draw a line, ...

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