Bot Construction Ltd. and subcontractors, which include Clarkson Construction, have launched a $20-million lawsuit against the Ontario Ministry of Transportation over a Highway 69 widening project near Sudbury.
The dispute centres around the source of – and responsibility for – additional rock left over at the end of the project.
Bot claims it is entitled to damages for the cost of removing the additional rock as the information it was provided when originally bidding on the contract was incorrect. However, the ministry argues Bot is responsible for the excess rock because of the methods it used on the project.
The arguments were outlined in a motion on the case that was filed in the Ontario Superior Court of Justice and heard by Madam Justice Patricia Hennessy. The ministry brought the motion to compel Bot to provide answers to questions that were not answered during examinations for discovery in the case.
The parties have a long relationship in road construction and have litigated the issue of excess rock in the past.
According to a court transcript of the latest motion, Bot claims the ministry misstated the amount of rock in the tender documents.
The province argued Bot should have to provide extensive documentation on their blasting techniques to determine whether that was the cause of the excess rock.
Lawyers for the company assert the additional rock comes from two sources, an alleged “design error” concerning the extent of rock “shatter” under the roadbed, as well as an alleged “bulking factor” error. The latter refers to the fact crushed or broken rock takes up more volume than rock that is sitting in the bank.
Bot is claiming damages for removal of rock which was in excess of their estimate and contingency and based on “intentionally and materially” misstated quantities disclosed in the tender package.
The company states the difference between their contingency of four per cent for overbreak and the ministry’s assertion that 10 per cent is a reasonable contingency is not the issue. The company indicated in oral submissions that the excess rock was about 26 times more than was estimated, resulting in 12 per cent of rock left over.
Bot argues the case is fundamentally about whether two pieces of information provided by the ministry to bidders on the contract were incorrect and, if so, was the price that the company bid for the contract artificially deflated by its reliance on that incorrect information and therefore suffered a loss.
However, lawyers for the province contend Bot is responsible for the excess rock because of the way it conducted the work on the project.
At a possible trial, the issue will be the techniques used by Bot and its subcontractors, specifically their means and methods.
The ministry maintains the quantity of rock generated on the site was within the “means and methods” of the contractor and is therefore Bot’s responsibility.
Specifically, the ministry contends, one source of additional rock would be over-blasting by the company and blasting beyond the design lines of the contract, also referred to as “overbreak.” While over-blasting is permitted, disposal of any additional rock generated by over-blasting would be Bot’s responsibility.
The ministry maintains it didn’t get answers to important questions that would provide significant information central to the issues in the action and are needed to allow it to defend the action. Bot, meanwhile, objects to answering the questions because the company contends they do not advance the purpose of discovery in the case.
The motion outlined a number of questions that Bot did not answer, such as how, if at all, Bot changed its estimating and bid practice for rock excavation and whether any concerns were raised about the size of the blast, blasting patterns and depth of the blast. The ministry also wanted to know how they’d bid the job differently and had other questions about litigation between the parties 27 years earlier.
A decision in 1994 dealt with the same parties and same issue of rock overbreak. In a decision then, the judge relied on evidence that a reasonable contractor would build a 10-per-cent contingency for overbreak into their bidding calculations.
Given the earlier decision, the ministry maintains Bot was responsible for the overbreak and they need to know if the company changed their estimating approach. According to the ministry, it is a necessary part of determining whether Bot’s estimate is a reasonable one.
Bot’s response is that the reasonableness of their estimate for rock excavation and overbreak for the contract is not an issue and further submitted that whether or not it adjusted its approach to rock excavation since 1994 is not material and not relevant.
The court document says Bot provided responses which included the actual amount of the contingency included in the bid, how the amount was calculated, and the factors taken into consideration to determine the amount of the contingency.
This problem has reoccurred many times. When I was with MTO we created an item called line drilling or something to that effect, to create a shear face with no over break. If the contract had a clause indicating “that :all blasted rock shall be the property of the contractor the responsibility is on the contractor” How he estimates is a Moot point. 10% is a std valve. If the contractor followed all the provisions of the contract and there was excess of blasted rock say 20% then he should be compensated for only the hauling of that amount to a designated location. The same would be if the provisions indicated that the blasted rock would be the property of the MTO. Compensation for the hauling of the excess rock over 10%.