Question

You are the Engineer In Charge for a large paving project in New York City. There is some additional paving work being added to the mainline expressway job involving approximately 25,000 metric tons of asphalt. The additional work involves paving nine (9) ramps along the mainline expressway. Due to the Maintenance and Protection of Traffic requirements, the ramps will each be paved on their own night. The total estimated quantity is 400 Metric Tons of Superpave Top Asphalt and 500 Metric Tons of Superpave Binder Asphalt. The Contractor states that it will cost him $90.00 per metric ton to place the asphalt, which is far above his $65.00 per metric ton bid price.

1. Based on what you know, is the Contractor telling the truth and would you accept this renegotiated cost? (Night differential is an increase of 10.00% on wages only.)
2. What other considerations might you have regarding this price?

Answer 1

Given:

Total asphalt required = 25,000 metric tons

Number of ramps = 9

Ramps to be paid on their own night

Estimated Superpave top asphalt = 400 metric tons

Superpave binder asphalt = 500 metric tons

Bid price = $65.00 per metric ton

Price required = $90.00 per metric ton

Solution:

A. As given, the suggested increase in price due to night differential = 10%. The current increase in cost is $25.00 per metric ton or ($25.00 X 900 metric ton) = $22,500 in excess of the negotiated price bid which would be about a 40% increase in price.Contractor in not telling the truth, and I would not accept such an increase in price.

B. One option would be to streamline traffic during the day(with like busiest ramps on a long weekend), and if that would be possible complete the project as per the negotiated price ($65.00 per metric ton) with no increase in cost. If that would not be a feasible option, re-read the contract terms, and check the price increase for unforeseen terms, contain the price increase to 10%. If the second option also doesn't work out, it would be the best for city authorities to imply force majeure to cancel contract, and re bid including the night timing class included with the acceptable cost.