Opinion
Civil Action 09-0795 09-1080 09-1214 09-2940 11-1593 11-2863 12-1113 12-2469 12-3778 13-0079
06-03-2014
PERINI CORPORATION, KIEWIT CONSTRUCTION CO., INC., JAY CASHMAN, INC. d/b/a PERINI-KIEWUT-CASHMAN JOINT VENTURE v. MASSACHUSETTS DEPARTMENT OF TRANSPORTATION
MEMORANDUM AND ORDER ON PLAINTIFFS' MOTION FOR JUDGMENT ON THE PLEADINGS
Thomas P. Billings, Justice of the Superior Court.
INTRODUCTION
The short version is this. Plaintiff Perini-Kiewit-Cashman Joint Venture (" PKC") is an enterprise in which three large construction firms combined to act as general contractor on one of three major prime contracts awarded in 1995 for the Central Artery Tunnel Project, or " Big Dig." As the project proceeded there were changes in the scope of work, resulting in Change Proposals (" CPs").
The 1995 contract had constituted a three-member Dispute Resolution Board (" DRB") to make an advisory recommendation on each CP, with final decisionmaking authority residing in the Project Director. By the end of 1998, however, there was a serious backlog of unaddressed CPs. To address it, the parties reached a new agreement in 1999. Under the 1999 agreement, the DRB would serve as a binding arbitration panel to adjudicate an agreed list of " claims by the Parties related to events which occurred prior to January 1, 1999."
As detailed below (¶ ¶ 195-229), there have been five DRBs, the body being reconstituted each time a member (or, in the case of DRB1 and DRB2, all three members) is replaced.
These ten consolidated cases arise out of disagreements over whether certain claims were arbitrable; i.e., were properly submitted to and acted on by the DRBs in their role as binding arbitrator. The DRBs ruled these claims arbitrable, but two successive Project Managers -- each, an engineer employed by MassDOT and appointed to this position pursuant to a specific grant of authority set forth in a CA/T Project Management Agreement dated July 1, 1997 and amendments thereto - ruled that they, not the DRB, were charged with determining arbitrability. They therefore treated the DRBs' awards as advisory recommendations, accepting some and rejecting others. In each rejection, the Project Director's contrary decision invariably favored the owner over the contractor, sometimes in the millions of dollars.
The above-captioned consolidated actions are also consolidated with the following actions involving the same parties: SUCV2008-05300, 08-5564, 10-3879, 11-0626, and 11-2351. The leading case is SUCV2008-05300.
The decisions are titled " Chief Engineer's Decision" or simply, " Engineer's Decision. The person signing as Chief Engineer for most of the period in question (the latter part of 2008 into the first half of 2011) was Helmut Ernst, P.E. At some point between May and December 2011, Ernst was replaced by Walter P. Heller, P.E.
[5]Section 39J, applicable to public works projects in Massachusetts, permits a decision by a contracting agency or its representative to be set aside if it is " made in bad faith, fraudulently, capriciously, or arbitrarily, is unsupported by substantial evidence, or is based upon error of law." The Massachusetts Highway Department was the state agency that executed the contract with PKC; the Project was managed by both the Highway Department and the Massachusetts Turnpike Authority. In the 2009 reorganization of the Commonwealth's transportation agencies, the Highway Department was merged into Massachusetts Department of Transportation (" MassDOT"), and the Turnpike Authority was abolished and its functions absorbed into MassDOT. Acknowledging the anachronism, this decision will refer throughout to the contracting party on the state side as " MassDOT."
Last year, the issue finally reached the Appeals Court, which held that the Project Director decides arbitrability, subject to review by this Court pursuant to the arbitrary-or-capricious (etc.) standard of G.L. c. 30, § 39J. Massachusetts Hwy. Dept. v. Perini Corp. , 83 Mass.App.Ct. 96, 981 N.E.2d 721 (2013). PKC's Motion for Judgment on the Pleadings seeks a ruling that the DRB was empowered to arbitrate each of the claims in issue, and an order vacating the Project Managers' decisions to the contrary and remanding the awards in question to the DRBs to eliminate any arbitrability determinations (i.e., to take arbitrability as a given) and reissue the awards on the merits. MassDOT, on the other hand, asserts that the Project Manager correctly determined that the claims were non-arbitrable, and seeks a ruling that his determinations should stand.
Because the Project Director's arbitrability decisions challenged here were premised on errors of law and on factual findings that were unsupported by substantial evidence, PKC's Motion for Judgment on the Pleadings is ALLOWED in its entirety.
A NOTE ON PROCEDURE, THE RECORD, AND CITATION FORMAT
Following the procedure set forth in a Scheduling Order entered by the Court (Kaplan, J.; SUCV2008-05300, Paper #77), PKC seeks resolution of the dispute by way of a Motion for Judgment on the Pleadings, much as in an administrative appeal under Chapter 30A of the General Laws. See Superior Court Standing Order 1-96(4). With its Motion, PKC filed a nearly 11, 000-page record on disc. Each of the pages was labeled using the following format: R.00001, et seq. Both PKC and MassDOT have cited copiously from this record in their submissions, and MassDOT submitted an additional 1500 pages or so, numbered " MASS00001, " et seq., on which it has also relied.
This is an analogy with a substantive, as well as a procedural, foundation. As discussed in greater detail below (Findings of Fact, ¶ ¶ 17-20), the 1995 Contract expressly provided that decisions of the project Director are to be reviewed under G.L. c. 30, § 39J, whose standard of review (examining whether " decision is made in bad faith, fraudulently, capriciously, or arbitrarily is unsupported by substantial evidence, or is based upon error of law") has been likened to that for review of agency decisions under the similarly worded G.L. c. 30A, § 14(7). Massachusetts Hwy. Dept. v. Perini Corp., 2001 WL 1249793 (Mass. Super. 2001; van Gestel, J.) at *6.
Unfortunately, a large part of MassDOT's submission (and much smaller portions of PKC's) consisted of materials recycled from PowerPoint presentations made in the DRB proceedings. In these, the referenced primary source documents were often obscured, in whole or substantial part, by overlays containing excerpts, summaries, and argument, displayed in such a manner that the document underneath could not be read.
On March 7, 2014 I entered an order requiring that MassDOT re-do its record submission to correct this, and update the hyperlinks in its proposed findings of facts. MassDOT complied with the request, and submitted a table cross-referencing the original record citations to the new files.
I have disregarded, for present purposes, both sides' PowerPoint slides, except where they include a primary-source document with sufficient completeness to read and evaluate the quoted portions fairly and in context (or, in a very limited number of instances, where offered simply to make the point that a particular issue was presented to a DRB). The following is a key to citation formats.
Citation Form
Source
R.00001 (PKC submission)
Some appear on: CD-ROM titled " Hyperlinked and Word Versions of PKC's Proposed Findings of Fact and Rulings of Law, SUCV2009-0795, et al."
Others appear on: CD-ROM titled " MassDOT's Request for Findings of Fact and Rulings of Law With Respect to PKC's Motion for Judgment on the Pleadings on the Issue of Arbitrability" (also includes some " R.00001" documents).
MASS00001 (MassDOT original submission)
On: CD-ROM titled " MassDOT's Request for Findings of
Fact and Rulings of Law With Respect to PKC's Motion for Judgment on the Pleadings on the Issue of Arbitrability" (also includes some " R.00001" documents).
Also on: Flash drive titled " Non Business Data, " folder titled MassDOT FOF-ROL, creation date 4/11/14 (also includes some " R.00001" documents).
And on: Flash drive titled " Lexar"
MASS00001 01.001 (MassDOT supplemental submission)
Flash drive titled " MassDot" (has two folders, " Record 1" with original exhibits and " Record2" with cleaned-up copies). Each has a file titled " Index" with cross-references between original and " clean" files.
FINDINGS OF FACT
A. What Is In Issue. 1. These consolidated cases arise out of PKC's work as a general contractor on the Central Artery/Tunnel Project (the " Big Dig" or the " Project") under Public Construction Contract No. C11A1 (the " C11A1 Contract") with Massachusetts Highway Department (the " CA/T" or " MassDOT"). R.05113. 2. Pursuant to Subsection 7.16(G)(10) of the C11A1 Contract, PKC has timely appealed nine decisions of the authorized representative of MassDOT's Project Director by filing civil actions in this Court. R.06152-06160; see SUCV09-0795, 09-1080, 09-1214, 09-2940, 11-1593, 11-2863, 12-1113, 12-3778 and 13-0079; R.06110-R.06234; R.06235-R.06256; R.06257-R.06297; R.06298-R.06369; R.06473-06643; R.06644-R.06767; R.06981-R.07005; R.07333-R.07350; R.07231-R.07243. 3. As depicted in the chart below, each of the nine Project Director decisions corresponds to an earlier decision by a three-member disputes review board (" DRB") appointed by the parties to hear disputes and issue findings and recommendations in addition to binding arbitration awards on claims:
4. Pursuant to the Court's (Kaplan, J.) April 17, 2013 Scheduling Order (see SUCV2008-05300, Paper No. 77), PKC has moved for judgment on the pleadings challenging the Project Director's determinations concerning the arbitrability of certain of PKC's claims (the " Motion"). 5. As noted above (p.2), the Appeals Court has previously held that the dispute concerning the arbitrability of PKC's claims must be resolved under Subsection 7.16 of the C11A1 Contract (" Section 7.16, " reproduced at R.06152-06160). Section 7.16 requires (1) a written request for a meeting with the DRB accompanied by a written position statement together with supporting documentation; (2) hearings before the DRB; (3) the issuance of findings and recommendations by the DRB; (4) after receipt of the DRB's findings and recommendations, a decision by MassDOT's Project Director; and (5) ultimate review by the Superior Court. See Mass. Hwy Dept. v. Perini Corp. , 83 Mass.App.Ct. 96, 981 N.E.2d 721 (2013). 6. In its Motion, PKC challenges the Project Director's arbitrability decisions rejecting:
#
DRB Determination
Project Director Decision Appealed by PKC
1
DRB3's " Determination Regarding PKC's Mainline Impact Claim for the Period Subsequent to May 1, 1999" dated October 24, 2008 (" DRB3's Mainline Decision"). R.05112-R.05215.
November 28, 2008 " Chief Engineer's Decision" concerning DRB3's Mainline Decision (" Mainline PDD"). R.06110-R.06234. Civil Action No. 2009-0795 is PKC's appeal of the Mainline PDD.
2
DRB3's " Determination Regarding Which Claims in the Time Portion of the Omnibus Claim are Subject to the Parties' Binding Agreement" dated November 14, 2008 (" DRB3's Binding/NonBhiding Decision"). R.05274-R.05305.
December 17, 2008 " Chief Engineer's Decision" concerning DRB3's Binding/NonBinding Decision (" Binding/NonBinding PDD"). R.06235-R.06256. Civil Action No. 2009-1080 is PKC's appeal of the Binding/NonBinding PDD.
3
DRB3's " Determination Regarding PKC's Time Impact Claim for the Period May 1, 1999 Through December 31, 2001 (The 76Bs Period)" dated November 14, 2008 (" DRB3's Time II Decision"). R.05216-R.05273.
January 6, 2009 " Chief Engineer's Decision" concerning DRB3's Time II Decision " (Time II PDD"). R.06257- R.06297. Civil Action No. 2009-1214 is PKC's appeal of the Time II PDD.
4
DRB3's " Determination Regarding PKC's Time Impact Claim for the Period January 1, 2002 Through January 23, 2004" dated March 20, 2009 (" DRB3's Time III Decision"). R.05312-R.05336.
April 22, 2009 " Chief Engineer's Decision" concerning DRB3's Time III Decision (" Time III PDD"). R.06298- R.06369. Civil Action No. 2009-2940 is PKC's appeal of the Time III PDD.
5
DRB4's " Determination Regarding PKC's MBTA Impact Claim" dated September 3, 2010 (" DRB4's MBTA Decision"). R.05356-R.05595.
January 28, 2011 " Engineer's Decision" concerning DRB4's MBTA Decision (" MBTA PDD"). R.06473- R.06643. Civil Action No. 2011-1593 is PKC's appeal of the Mainline PDD.
6
DRB4's " Determination Regarding PKC's Site Restoration Claim" dated January 15, 2011 (" DRB4's Site Restoration Decision"). R.05596-R.05741.
May 13, 2011 " Engineer's Decision" concerning DRB4's Site Restoration Decision (" Site Restoration PDD"). R.06644- R.06767. Civil Action No. 2011-2863 is PKC's appeal of the Site Restoration PDD.
7
DRB4's " Determination Regarding PKC's Traffic Impact Claim" dated May 21, 2011 (" DRB4's Traffic Decision"). R.05806-R.05878.
December 22, 2011 " Engineer's Decision" concerning DRB4's Traffic Decision (" Traffic PDD"). R.06981- R.07005. Civil Action No. 2012-1113 is PKC's appeal of the Traffic PDD.
8
DRB5's " Interim Determination Regarding Interest Dispute" dated April 30, 2012 " DRB5's Interest Decision"). R.06097-R.06109.
October 12, 2012 " Engineer's Decision" concerning DRB5's Interest Decision (" Interest PDD"). R.07333- R.07350. Civil Action No. 2013-0079 is PKC's appeal of the Interest PDD.
9
DRB5's " Interim Determination Regarding Overhead Overlap Dispute" dated March 19, 2012 (" DRB5's Overhead/Overlap Decision"). R.05942-R.05953.
July 20, 2012 " Engineer's Decision" concerning DRB5's Overhead/Overlap Decision (" Overhead/Overlap PDD"). R.07231- R.07243. Civil Action No. 2012-03778 is PKC's appeal of the Overhead/Overlap PDD.
a. The arbitrability of 23 claims, which PKC refers to as the Atlantic Avenue Bypass Claims, including direct costs as well as impact and constructive acceleration costs. These claims are identified by the following " Change Proposal" (" CP") numbers: 869, 915, 934, 936, 947, 952, 950, 959, 951/974/974A-D, 950A, 950B, 966, 996, 1015; 1032, 986, 1016, 1026, 1027, 1028, 1126; b. The arbitrability of five non-Atlantic Avenue Bypass claims (including direct costs and impact costs) that were assigned CP numbers 611A, 622A, 900, 906 and 976; and c. The arbitrability of PKC's impact costs, including constructive acceleration costs, resulting from claims which are included on the Exhibit 1 list of claims subject to the parties' arbitration agreement.7. PKC contends that the 23 Atlantic Avenue Bypass claims, including their direct costs as well as impact and constructive acceleration costs, are part of " CP 575 - Atlantic Ave. By-Pass, " which is on the " Exhibit 1" list of arbitrable claims attached to the parties' March 25, 1999 Dispute Resolution Agreement (the " 1999 Agreement"). 8. PKC contends that the five non-Atlantic Avenue Bypass claims, including direct costs and impact costs, are part of other claims which are listed on Exhibit 1 and are therefore arbitrable. 9. PKC also contends that its impact costs, including constructive acceleration costs, are arbitrable if they result from arbitrable claims. 10. PKC therefore asserts that the Court should overturn or vacate the Project Director's arbitrability determinations because they are based upon error of law and/or are unsupported by substantial evidence. Cf. G.L. c. 30, § 39J; c. 30A, § 14. 11. MassDOT's position is that the Project Director's determination that CPs not listed by number on Exhibit 1 were, for that reason alone, non-arbitrable was not " made in bad faith, fraudulently, capriciously, or arbitrarily, [or] unsupported by substantial evidence, or ... based upon error of law, " and should be upheld. 12. The Court heard arguments on PKC's Motion on September 26, 2013. B. The Big Dig and the 1995 C11A1 Contract. 13. The Big Dig was one of the largest and most complex construction projects in American history, compared at times (on the Project website, at least) to the Panama Canal, the English Channel Tunnel (" Chunnel"), and the Trans-Alaska Pipeline. R.09626; R.02177-R.02178. The centerpiece of the Project was the replacement of the existing elevated portion of Interstate 93 separating the North End from the rest of downtown Boston, with a tunnel within the same footprint. R.09435. This new mainline tunnel was divided into several separate contracts with six major " reaches" of construction. R.09443. 14. The most southerly mainline reach, known as " C11A1 -- Atlantic Avenue" started at the new southerly portal (tunnel entrance) to a termination point about 2, 000 feet to the north, approximately under the intersection of Atlantic Avenue and Congress Street. R.09444-R.09447. The C11A1 Contract was the first downtown mainline contract let for Id. With a price of $378 million, it was at the time the largest public works contract ever awarded in the Commonwealth of Massachusetts. R.09444; R.09449; see Massachusetts Hwy. Dept. v. Perini Corp., 444 Mass. 366, 367, 828 N.E.2d 34 (2005). 15. MassDOT awarded the C11A1 Contract to PKC in February of 1995. R.05113. It encompassed five major work components: (1) relocation of existing utilities; (2) excavation and construction of approximately 2, 000 feet of highway tunnel (the " Mainline Tunnel") under Atlantic Avenue from Kneeland Street to Congress Street; (3) the reconstruction and underpinning of the MBTA Redline Station; (4) the construction of the MBTA Silverline Transitway box tunnel; and (5) final site restoration. R.05113; R.09448; Massachusetts Hwy. Dept. v. Perini Corp., 444 Mass. at 367. 16. A major concern for MassDOT - which it impressed upon the contractor in the General Notes to the construction plans - was its ability to complete the Project with as little impact on the city as possible. R.02295; R.05199. The C11A1 Contract prescribed a multitude of detailed requirements for the phasing and sequencing of the work, lane closures, temporary roadways, signals, and the like, all with the goal of minimizing the impact of the project on the traffic flow through the city. R.05199; R.09627-R.09629; R.02294. Fully one third of the construction drawings were Traffic Management Plans (" TMPs") and Construction Sequence Plans (" CSP") on the Project prescribing how the contractor was to sequence construction and manage traffic. R.05199; see R.09658-R.09671.
[8]PKC's Proposed Findings of Fact frequently make factual assertions on the merits of the dispute, citing DRB decisions in support. These, although they have every appearance of having been thoroughly and carefully considered, are secondary sources, and would be subject to judicial review should they be properly challenged on the merits. Sometimes, the factual assertions concern matters which do not appear to be in dispute, and I have accepted them as such; other times, however, the DRB has accepted a PKC position and rejected MassDOT's contrary position as to a particular claim. It is of course the subject matter of the claim - not its merit - that matters to the arbitrability issue. See Local Union No. 1710, Int'l Ass'n of Fire Fighters v. City of Chicopee , 430 Mass. 417, 421, 721 N.E.2d 378 (1999). Often, however, the claimant's position on the merits is what best delineates the subject matter of the dispute, which bears directly on its arbitrability. I have therefore, from time to time, recounted a " fact" by describing a PKC position (often, one with which a DRB agreed), and left it at that. While such comparisons may strike some as immodest, the Big Dig was the only one of these four projects to be recognized locally with a Brigham's ice cream flavor named after it. (Brigham's, not the CA/T project, then laid claim to the iconic sobriquet as its own intellectual property, registering it on March 2, 1998 as U.S. Trademark No. 75442847.) All kidding aside, this was a truly vast project, whose intrinsic complexity was amplified manyfold by the necessity of keeping traffic flowing, as well as could be, through the heart of downtown Boston.
C. The Original Claim Resolution Process. 17. The C11A1 Contract also included a process for claim resolution. This mandatory dispute resolution procedure, contained in Section 7.16 of Division I of the Contract, provides for the presentation of claims to a Dispute Review Board (" DRB"), which issues a non-binding recommendation. R.06152-160; see MASS.01414; Mass. Highway Department v. Perini Corp., No. 004096BLS, 2001 WL 1249793 at *1 (Mass. Super. Aug. 13, 2001). Within thirty days following receipt of the Dispute Review Board's recommendation, the Project Director is required either to issue a decision or to notify the parties in writing of the date by which a decision will be issued. R.06157. 18. Section 7.16 provided that the DRB would consist of three members, one selected by each party from a list provided by the other and the third - the Chairperson - to be selected by the first two. R.06152-R.06153. DRB members were required to be disinterested (unaffiliated with any party to the Contract), qualified (in the engineering or construction field), and experienced (at least ten years; fifteen for the Chairperson). R.06152-R.06153. The result was a panel that was " highly qualified and [with] substantial experience in the type of construction involved in the contract, in the interpretation of similar contracts, and in the resolution of construction claims." Massachusetts Hwy. Dept. v. Perini Corp., 444 Mass. at 367. 19. Section 7.16(G)(6) required that the DRB's findings and recommendations be " base[d] ... on the Contract provisions and the Contract Documents, established principles of law, statutes and regulations deemed by the DRB to be applicable, and the facts and circumstances of the Dispute as found by the DRB, and the information provided by the parties." R.06156. 20. Pursuant to Contract Subsections 5.01 and 7.16(G)(10), the Project Director's decision was final and binding on the contractor unless the contractor exercised its right to appeal the decision within ninety (90) days to the MHD Board of Contract Appeals or the Superior Court. The standard of review in the case of any such appeal is that set forth in G.L. c. 30, § 39J. R.06157.
D. The 1999 Binding Dispute Resolution Agreement. 21. The scope of PKC's work evolved substantially as a result of major changes initiated by MassDOT. R.08847; R.07471; R.05186, R.05200; R.05847. By 1999, these changes had given rise to hundreds of unresolved PKC claims for direct costs, impact costs, and hundreds of days of delay. See Mass. Hwy Dept. v. Perini Corp. , 83 Mass.App.Ct. at 98. 22. In order to address these unresolved PKC claims, the CA/T and PKC on March 25, 1999 entered into a Binding Dispute Resolution Agreement (the " 1999 Agreement"). This modified and partially supplanted Section 7.16 of the 1995 contract in that the DRB, until then solely an advisory body, would now engage in binding arbitration of PKC claims which were related to events occurring prior to January 1, 1999. R.07471; R.06184-06234; R.06243; see Massachusetts Hwy. Dept. v. Perini Corp., 444 Mass. at 367-69. 23. Titled " Dispute Resolution Agreement Regarding Massachusetts Highway Department Public Contract No. C11A1, " the body of the 1999 Agreement read, in its totality, as follows:
This Agreement is made this 25 day of March, 1999, by and between the Massachusetts Highway Department (" MHD") and Perini/Kiewit/Cashman, a Joint Venture (" PKC"). 1. The MHD and PKC (" Parties") have entered into MHD Public Construction Contract No. C11A1 (" Contract") which concerns the construction of a portion of the Central Artery/Third Harbor Tunnel Construction Project. 2. In conjunction with the work under the Contract, PKC is seeking to recover from the MHD compensation for additional costs allegedly incurred by PKC during the performance of the work including, but not limited to, delay, inefficiency, and/or other overall impact costs, and the MHD is seeking to recover from PKC credits against the Contract price for cost decreases allegedly incurred by PKC during the performance of the work. 3. In an effort to resolve any and all claims for additional compensation or credits (" claims"), which are related to events which occurred prior to January 1, 1999 the Parties agree on the following binding dispute resolution process which will supersede and/or supplement, where appropriate, the dispute resolution process set out in Division I, Subsection 7.16 et seq., of the Contract. 4. The Parties have compiled a list of claims which, subject to the provisions of Paragraph Seven (7) below, includes any and all claims by the Parties related to events which occurred prior to January 1, 1999 and which the Parties intend to submit to the following dispute resolution process. A copy of the list is attached hereto as Exhibit 1. 5. The Parties intend to resolve any and all disputes concerning the claims listed on Exhibit 1 through agreement. However, if the Parties cannot resolve a dispute by agreement, the Parties grant to the existing Disputes Review Board and/or, any Supplemental Disputes Review Board established by agreement of the Parties (" DRB"), the exclusive authority to adjudicate any and all such disputes including, but not limited to, any dispute concerning PKC's claim for delay, inefficiency and/or other overall impact costs. 6. The DRB shall adjudicate any disputes between the Parties concerning the claims listed on Exhibit I pursuant to the procedures set forth in the " Amended Meeting Rules", a copy of which is attached to this Agreement as Exhibit 2. 7. Subject to further agreement of the Parties, Exhibit 1 may be amended to include any additional claim (s) brought against PKC by any subcontractor and/or supplier to PKC which relate to events which occurred prior to January 1, 1999. 8. The DRB and/or any supplemental DRB acting under the provisions of this Agreement, shall have the authority to act upon the majority vote of the members of the DRB and, any Order and/or Award issued by the DRB pursuant to a majority vote of its members, shall be valid, final and binding upon the Parties and shall be enforceable by the Superior Court of the Commonwealth of Massachusetts.R.06184-R.06185 (emphasis supplied).
E. The Evolution of Exhibits 1 and 2 to the 1999 Agreement. 24. The 1999 Agreement, in addition to the body quoted above, had two Exhibits. Exhibit 1 was titled " C11A1 DRB Issues, " and was actually three lists in spreadsheet format of the same information. The first two of these, dated 3/28/00, sorted claims by Item number and by CP number, respectively, while the third (dated 4/13/00) sorted them by " Phase" (i.e., where the claim stood in the DRB dispute resolution process). R.06186-R.06228. 25. Although the CA/T and PKC executed the 1999 Agreement on March 25, 1999, they had not yet agreed upon the Exhibit 1 list of claims that would define the scope of the 1999 Agreement. During the summer of 1999, however, the parties negotiated a specific list of CPs - short for " change proposals" - to be included on Exhibit 1. The list was finalized at last in the spring of 2000, a year after the 1999 Agreement was executed. MASS.00005-MASS.00006, MASS.00008, R.06186. 26. Early on, by letter dated June 17, 1999, PKC proposed that the CA/T agree to add twelve January 1999 CPs to the Exhibit 1 list, remove sixteen claims that had been resolved, and make changes or deletions to eight more. MASS.00005-00008. In the final version of Exhibit 1 all of the requested additions, and some but not all of the deletions and changes, were made. R.06184-R.06228; R.08948-R.08949. 27. The CPs that are the subject of the instant dispute - CPs 869, 915, 934, 936, 947, 952, 950, 959, 951/974/974A-D, 950A-950B, 966, 996, 1015, 1032, 986, 1016, 1026, 1027, 1028, 1126, 900, 906, 975, 611A, and 622A - are not specifically enumerated on the final Exhibit 1, but they are related to others that are, as discussed at length below (¶ ¶ 36-190). Id. 28. Even while Exhibit 1 remained a work in progress, the parties and the DRB were working on resolving the pre-1999 claims, and were tracking how far along in the arbitration process each arbitrable CP had advanced. In fact, when it was finalized at last, the Exhibit 1 list included a notation for each claim of what stage the arbitration process was then in, as follows:
Stage # 1 Initiate Process Stage # 2 Submit Info/Documents Stage # 3 Meet Stage # 4 Agree or Disagree Stage # 5 Field Negotiation Stage # 8 PKC Appeal Stage # 11 DRB Meeting Stage #13 DRB Decision Stage # 14 Issue Resolved - Full & Final Stage # 15 Issue Resolved - With Reservations Stage #16 Issue Resolved - PKC Dropped Stage # 17 Issue Resolved - Full & Final with SubmitR.06217 - R.06228. 29. On February 29, 2000 Bechtel/Parsons Brinkerhoff (" BPB"), an alliance of firms serving as the Project's construction manager, sent PKC a list of CPs to be included on Exhibit 1. PKC responded by letter dated March 22, 2000. It noted that the additions PKC had requested in its letter of June 17, 1999 were included in the list; observed that its suggestions for deletion were still on the list but it didn't matter, since these items had been resolved; and reiterated a prior request for additional deletions.
Assuming with the deletions noted above, PKC agrees the remaining CP numbers on BPB's list are the appropriate CPs for " Exhibit 1" of the Revised Claim Resolution 1999 Agreement dated March 25, 1999. For clarification, this agreement is limited to the CP numbers which are on BPB's list and not CP descriptions and the remaining BPB data with which PKC is not in agreement. PKC expects these differences will continue to be resolved during negotiations and any remaining differences will be resolved by the DRB.R.08949. 30. As it happened, this latent disagreement remained unresolved, and in fact lies at the heart of the present dispute. The issue was compounded by the facts that the descriptions are often cryptic at best; some entries bore no description at all, e.g., R.06190 (CP #344, 347, 357, 362, 363); R.06194 (#511, 512-512A-E, 513A, 514, 515, 532B); R.06198 (#668, 675, 675A, 676, 678, 685, 691); and others were embellished with conclusory and sometimes partisan notations such as " NO MERIT, " or " NO RECORD" or " CLOSED." E.g., R.06197 (#627); R.06198 (#667, 679, 683); R.06199 (#710, 717). 31. Importantly, Exhibit 1 included CPs which constituted broad claims for relief and which sometimes encompassed numerous additional CPs, including some which were not separately listed on Exhibit 1. See Massachusetts Hwy. Dept. v. Perini Corp. , 444 Mass. at 369-370 (discussing PKC's underpinning impact claim - listed on Exhibit 1 as CP 578C - as encompassing 33 additional CPs all of which were determined to be arbitrable); R.10667 (MassDOT's final determination letter listing individual CPs which are part of CP 578C, including 5 CPs which are not separately listed on Exhibit 1); PKC's 9-26-13 Hearing Binder, Tab 15, Slide No. 4. 32. By letter dated March 28, 2000, the CA/T forwarded the first two spreadsheets - one sorted by CP number, the other by Item Number - listing the CPs that would constitute Exhibit 1 to the 1999 Agreement. It stated, " These lists are both dated 3/28/00 and reflect the corrections reflected in PKC's [March 22, 2000] letter." R.06186-R.06228. The third list, sorted by Phase, must have arrived about two weeks later. These lists, both sides agree, are the final version of Exhibit 1. 33. Exhibit 2 was titled " Disputes Review Board Amended Meeting Rules and Procedures Regarding Binding Adjudication." R06229-34. In contrast to Exhibit 1, neither side has called to my attention any evidence suggesting when Exhibit 2 was finalized - whether at the same time as the main body of the Agreement, or (as with Exhibit 1) after further negotiation. I can and do draw an inference, however: it seems probable, and I find, that the Agreement and Exhibit 2 were negotiated together, and that the finalization of Exhibit 1 was delayed (likely, far longer than either side anticipated) by the complexity of assembling, fact-checking, and attempting to agree on the considerable amount of data that appears on it. 34. Exhibit 2, after reiterating the DRB's agreed power to render " valid, final and binding" awards which " shall be enforceable by the Superior Court of the Commonwealth of Massachusetts, " predictably dealt almost entirely with procedural matters unrelated to which claims were arbitrable. Rule 3.0, however, which specified in depth the manner and schedule for bringing and litigating a claim to the DRB, also made one allusion to the DRB's subject matter jurisdiction. Subsection B provided:
Within forty-five (45) calendar after the receipt of a Final Determination on a claim, the claiming party shall file with the DRB and serve upon the responding party a written statement setting forth the factual and legal basis for recovery for such claim along with copies of documents which the claiming party intends to submit to the DRB in support of such claim. Where appropriate, the documentary support will include contract claim certifications. However, nothing in the language of any claim certification shall limit PKC's ability to present to the DRB, as part of these proceedings, an omnibus claim for a compensable time extension and/or for additional compensation from the MHD for impact costs arising out of and/or related to the performance of the work identified in Exhibit 1.R.06230 (emphasis supplied). 35. The DRBs and the Project Directors have both addressed - repeatedly, at length, and in detail - the issue of whether or not particular claims, including those at issue here, are arbitrable. As explored in detail below (¶ ¶ 195-240), the two authorities have employed quite different approaches and have frequently reached different conclusions on this issue. The result is these ten cases. Although the question of which administrative authority is to decide (subject to judicial review) questions of arbitrability under the 1999 Agreement is now settled, the actual arbitrability of the claims at issue here is before a court for the first time.
F. The Atlantic Avenue Bypass Initiative and Related Mods and CPs. 36. Under the original scope of the C11A1 Contract, PKC was required to maintain a minimum of two lanes of Atlantic Avenue open to through traffic during construction. R.02296; R.02297 (" The contractor shall maintain two lanes of traffic along Atlantic Avenue at all times while installing traffic decking. Traffic decking may be installed one half side at a time, always maintaining two lanes open"); R.10657; R.05288-R.05291. 37. By early 1998, however, MassDOT had concluded that it could achieve worthwhile efficiencies in the construction process by closing Atlantic Avenue to through traffic during construction, diverting traffic onto neighboring city streets, and then reopening Atlantic Avenue to full traffic at substantial completion, thus expanding available work areas and reducing traffic congestion. R.04799; R.02234; R.10657-R.10658. 38. MassDOT believed that the cost savings from implementation of the Atlantic Avenue Bypass Initiative should result in a net credit to MassDOT. R.02287; R.10658-R.10660. It nonetheless contended, long after the fact, that PKC was the moving force behind the initiative, and that the contract modifications related to it were only labeled " unilateral" because PKC " would not agree on " commercial terms" (which I interpret to mean that the two sides did not agree on the direction and/or the amount of a resulting price adjustment). R.02340-R.02378. There is record evidence that seems to suggesting that the initiative came from MassDOT, but perhaps it was a dialogue; in any event, the issue of who actually initiated the Initiative is irrelevant to the outcome of this Motion. 39. The first Modification (Mod A297IA) specified that " the Department shall receive an equitable adjustment in Price and Contract Time in amounts to be determined in subsequent Parts to this Modification." R.00229. Thereafter, each included the following language or a slight variation on it:
This is a no cost Contract Modification, issued unilaterally for the purpose of issuing Contract Drawings and Specifications associated with the Atlantic Ave. initiative. Any costs associated with this initiative are to be included in a separate part to this Modification.For a few months between March and July, 2001 (Mods A297IH through A297IK), PKC registered its impatience with this by crossing out the language just quoted and adding, " SHOULD BE SEPARATE MOD NOW, " and similar comments. R.00475; R.00466; R.00460. Thereafter, the annotations ceased. 40. It has been and still is PKC's position that the Atlantic Avenue Bypass caused more disruption, delay and expense than it saved and that it, not MassDOT, is owed money for it. See, e.g., R.03082; R.01453; R.05184. (The members of DRB3, to whom this claim was presented, largely agreed with PKC on this point. R.05112-R.05215. The issue before the Court, of course, is not who is right about this, but whether the issue was or wasn't subject to binding arbitration.)
1. Modification A297IA. 41. The Atlantic Avenue Bypass became reality on February 26, 1998, with MassDOT's issuance of a unilateral contract modification known as Contract Modification 297 Part IA (" Mod 297IA"), titled " Atlantic Avenue By-Pass." R.00227-R.00232; R.02339-R.02378. Under Mod 297IA, to fully implement the Atlantic Avenue Bypass, MassDOT " permit[ted] and require[d]" the stepped closure of Atlantic Avenue to through traffic and associated restaging of PKC's work, beginning " immediately." R.00229. 42. Mod 297IA specified that the Atlantic Avenue Bypass would be implemented over the course of the entire job and that additional details, drawings, and specifications implementing the Atlantic Avenue Bypass would be required. R.00229 (providing for determination of equitable adjustment " in amounts to be determined in subsequent Parts to this Modification"); R.02345; R.02343. It effectively extended the Atlantic Avenue Bypass through the end of the job by requiring that " [a]ll lanes of Atlantic Avenue within the C11A1 limits of work shall be fully reopened to traffic no later than the date of Milestone 2, 'Substantial Completion.'" R.00229. 43. To divert traffic from Atlantic Avenue, Mod 297IA required improvements and modifications to the neighboring streets (the Surface Artery, Kneeland Street, Lincoln Street, Essex Street, East Street, Beech Street, and Summer Street) as well as preparatory work on Atlantic Avenue. R.00229. Mod297IA also widened the existing/parallel Surface Artery Roadway to accept more vehicles, reversed Atlantic Avenue traffic flow from one-way northbound to one-way southbound, and reduced Atlantic Avenue to one lane (plus parking) for local traffic only. R.00229; R.05816-R.05818. 44. Mod 297IA required PKC to provide an initial analysis of the impacts of the modification on its " sequence of work for the balance of the work and the time to complete the balance of the work.'" R.00229 (emphasis supplied). 45. Under the Mod 297IA section titled " ADJUSTMENT IN PRICE AND TIME, " MassDOT further required PKC to keep detailed and thorough cost records sufficient to permit a determination of the costs incurred to perform the work of the C11A1 Contract:
With respect to all other work hereunder, and the Work affected by this Modification, the Contractor shall keep detailed and thorough cost records to permit determination of the costs incurred to perform the Work of this Contract... to assist the Department in identifying any differential in cost between the original staging plans and the revised staging, as well as any and all resulting impacts on the cost of the performance of the Contract Work.R.00230 (emphasis supplied). The directive that PKC track costs of the Atlantic Avenue Bypass was reiterated in separate correspondence. R.00381 (" Work for this effort should be tracked in accordance with Contract Modification A2097, the Atlantic Ave. Initiative."). 46. Mod 297IA did not specify an end date for this directive to track costs and did not prescribe the manner by which PKC was to track its costs. R.00229; R.05290. 47. In Mod 297IA, MassDOT also required a determination of the " differential in cost between the reasonable and efficient cost of performance of the Work as changed versus what it would have cost the Contractor to perform the Work prior to the changes made by this Modification." R.00230. 48. Mod 297IA further provided that MassDOT " shall receive an equitable adjustment in Price and Contract Time in amounts to be determined in subsequent Parts to this Modification." R.00229. 49. Although Mod 297IA required major changes to the remainder of the C11A1 Contract work, MassDOT included with it only a few of the hundreds of revised contract drawings needed to implement the Bypass. Drawings and plans for the subsequent steps or sequences of the Atlantic Avenue Bypass phase-in (closure of Atlantic Avenue) or phase-out (reopening of Atlantic Avenue) were left for another day. R.00227-00232; R.05290; R.05523. 50. As discussed below (¶ ¶ 55-152), MassDOT provided the remaining phase-in and phase-out Traffic Management Plans and Construction Sequence Plans piecemeal in twelve subparts to Mod 297IA issued over the course of the next 4 1/2 years. R.02339-R.02378; R.05290; R.05523. 51. On March 3, 1998, five days after MassDOT's issuance of Mod 297IA, PKC responded with a " [n]otice of claim." R.00233. It assigned the claim the number " CP575, " and it would be one of those listed on Exhibit 1 to the 1999 Agreement. In the notice letter, PKC
t[ook] issue with the Modification for reasons including, but not limited to, insufficient cost, insufficient time and noncompliance with the terms and conditions of the C11A1 Contract. As such, PKC reserves its rights to full compensation for all costs and time associated with this Modification. Given the extensive revision to the remainder of the contract, a more thorough review of the changed aspects of the work shall be better known after a complete review of the Project schedule and cost. PKC shall advise [MassDOT] as the details of this substantial revision are determined.R.00233. 52. Although Mod 297IA explicitly required that PKC track its " work hereunder" and its costs, it did not specify how PKC was to report these to MassDOT. The method PKC selected was to assign a CP number (sometimes an old CP number with a letter attached, such as " 950A, " much as MassDOT denoted its 297-series Mods; sometimes a new number) to identify and track costs associated with new claims, events, or issues as they arose with the ever-evolving Atlantic Avenue Bypass Initiative. Ultimately, DRB3 would
conclude that CPs relating to costs incurred in implementing the Atlantic Avenue Bypass directive are related to an event that occurred prior to January 1, 1999, namely the CA/T direction to implement its version of the Atlantic Avenue Bypass and to maintain records of all costs incurred indefinitely thereafter in implementing that directive. Therefore, this DRB3's decisions on these CPs are subject to the Binding Agreement: when rendering decisions regarding Modifications 297IA through 297IN, inclusive, and the CPs that they spawned, this DRB3 is functioning as an arbitral panel and rendering binding decisions.R.05290-R.05291. 53. The parties frequently treated certain CPs as encompassing others. See R.10667 (MassDOT final determination listing individual CPs which are part of CP 578C, including 5 CPs which are not separately listed on Exhibit 1); R.06198 (in Exhibit 1, CP 677B " to be included in CP #704"); R.06200 (CP 740 referencing CP 716 and CP 757 referencing CP 692); R.06201 (CP 9993 referencing CP 469); Massachusetts Hwy. Dept. v. Perini Corp. , 444 Mass. at 369-370 (discussing PKC's underpinning impact claim -- listed on Exhibit 1 as CP 578C -- as encompassing 33 additional CPs). 54. By letter dated April 29, 1998, PKC provided " [a]dditional information" to MassDOT concerning its claims regarding Mod 2971A. Among other things, PKC objected to " the unilateral change of contract terms and conditions that go to the essence of the contract, " " the expansion of this contract beyond its present contract limits, " and " the administrative burden, without promise of compensation, " of making the changes,
re-pricing and re-scheduling the whole of the work, tracking the remaining cost pof the project in some unknown manner sufficient to satisfy BPB's stated objective of settling future cost, and the entanglement and blurring of cost accounting between the contract and change order performance.There were additional concerns, notably " no inclusion or reference to drawings, leaving scope indeterminate" and " the unspecified schedule of unilaterally deductive payments by BPB against this contract." Nonetheless, the letter reiterated PKC's promise to apply its best efforts to the task at hand, and to " advise of the effect bon Contract Cost and Time when known." R.00282-R.00283.
2. The Remainder of the Atlantic Bypass Modifications. 55. As matters unfolded, the Atlantic Avenue Bypass Initiative and Contract Modification 297 would dribble out over the next four and one-half years in thirteen increments, beginning with the just-discussed Mod A297IA and continuing through A297IN (there was no A297II), each usually accompanied by a new set of drawings finalized between February 26, 1998 and September 6, 2002. R.00227-00232; R.00288-R.00291; R.00321-R.00324; R.00402-R.00405; R.00439-R.00442; R.00443-R.00446; R.00452-R.00455; R.00458-R.00461; R.00464-R.00467; R.00473-R.00476; R.00479-R.00482; R.00483-R.00486; R.00486; R.10996-R. 10999; R.02339-02378; R.10657. 56. Each of these subparts to Mod A297I announced prominently that it was part of the " Atlantic Avenue Bypass" or " Atlantic Ave Initiative Modification." As detailed below (¶ ¶ 70-152), beginning with Mod A297IB, every one of these modifications, prepared unilaterally by MassDOT, also referenced " CP 575" explicitly, usually in both the subject line of the covering letter and in the " Summary Description" or the " Description" portions of the Mod itself. 57. These subparts typically incorporated the terms of prior parts of Mod 297, including Mod 297IA and its directive to track costs, and added new drawings in connection with the implementation of the Atlantic Avenue Bypass. R.00227-00232; R.00288-R.00291; R.00321-R.00324; R.00402-R.00405; R.00439-R.00442; R.00443-R.00446; R.00452-R.00455; R.00458-R.00461; R.00464-R.00467; R.00473-R.00476; R.00479-R.00486; R.10996-R.10999. 58. MassDOT also issued a series of letters transmitting plans and drawings and notifying PKC that the plans/drawings would be incorporated into the C11A1 Contract as part of the Atlantic Avenue Bypass and/or Mod 297. R.10358-R.10362; R.10952-R.10962; R.10963-R.10974; R.10975-R.10991. 59. MassDOT issued Contract Modification 297IB (" Mod 297IB") on May 8, 1998, incorporating new contract drawings associated with the Atlantic Avenue Initiative (i.e., specifications and signage for implementation of the Atlantic Avenue Bypass). R.00288-R.00291. 60. In its cover letter transmitting Mod 297IB, MassDOT referenced " Atlantic Ave Initiative Modification / MHD Issue #A0297IB CP-575" in the subject line and referenced " File Nos." " CN-9.11 A1.26.297" and " CN-9.11A1.26.575." R.00288. 61. PKC submitted a notice of claim on May 20, 1998, and reserved its right to full compensation for all costs and time. R.00307. 62. On June 15, 1998, MassDOT issued Contract Modification 297IC (" Mod 297IC") " for the purpose of issuing Contract Drawings associated with the Atlantic Ave Initiative" and more specifically, for " provid[ing] direction concerning certain revisions to signage, traffic control devices and barrier medians." R.00321-R.00324. 63. In its cover letter transmitting Mod 297IC, MassDOT referenced " Modification A0297, Part IC, " Atlantic Ave Initiative" ' and " File No." " CN-9.11A1.26.297." R.00321 (emphasis supplied). MassDOT informed PKC that " [a]ny cost or time impact will be addressed in a subsequent modification." R.00321. In Mod 297IC itself, MassDOT described the modification as " CP 575 Atlantic Avenue By-Pass." R.00323. 64. Although the Atlantic Avenue Bypass had completely changed the original traffic conditions, alignments, and construction phasing through the Atlantic Avenue Bypass, MassDOT had not yet replaced the original 530 sheets of Traffic Management Plans in Volume 7 of the C11A1 Contract Drawings with new drawings. R.05186. MassDOT unilaterally and intermittently issued new replacement drawings via Modifications 297ID to 297IN over the following three years, while PKC completed the contract work and maneuvered traffic along the Atlantic Avenue corridor. R.05289-R.05291. 65. After PKC completed the phase-in of Atlantic Avenue Bypass, there were still additional traffic changes needed in order to provide PKC with access to the work. R.05816-R.05818; R.05520-R.05523. MassDOT took city streets that were not originally part of the C11A1 contract and added them to it as part of the Atlantic Avenue Bypass. According to PKC and DRB4, the approval process for both minor and major traffic changes became cumbersome and hampered PKC's ability to progress the work. R.05816-R.05818; R.05520-R.05523. 66. As MassDOT had directed, PKC tracked its costs associated with the various subparts to Mod 297IA. PKC typically did this by opening new CP numbers to track the individual issues created by the Atlantic Avenue Bypass and their costs (direct costs and impact costs, including constructive acceleration costs). R.05816-05818; R.05520-R.05523. 67. When it promulgated Mod 297IA, MassDOT had not yet developed TMPs for the " phase-out" of the Atlantic Avenue Bypass (the phased reopening of Atlantic Avenue to traffic). Eventually, though, MassDOT issued new TMPs. R.05816-R.05818; R.05520-R.05523. 68. MassDOT believed that the Atlantic Avenue Bypass would provide PKC with greater work space by diverting through traffic off Atlantic Avenue and reducing the remaining local traffic to one lane, and assumed that the maintenance of traffic effort as well as the traffic-related work items would be easier. PKC maintains, however, and DRB4 agreed, that the phase-out of the Atlantic Avenue Bypass did not proceed as had been anticipated. R.05816-R.05818; R.05520-R.05523. 69. MassDOT eventually directed that Atlantic Avenue be opened to full traffic early, prior to Substantial Completion. This required PKC to accelerate and complete its work predominantly within the active city streets using temporary street closures during off-peak hours, which PKC says (and DRB4 agreed) substantially increased its costs to complete the work. R.05816-R.05818.
Mod A279IA, of course, did not reference CP575, because the Mod predated the CP by a week; the CP was submitted in response to MassDOT's unilateral imposition of the Atlantic Bypass Initiative.
3. The 23 Atlantic Avenue Bypass CPs. 70. In all, PKC opened 23 CP numbers (in addition to CP 575) to track its costs associated with the Atlantic Avenue Bypass, as summarized in the following chart:
Neither the Project Director nor MassDOT disputed that the Atlantic Avenue Bypass CPs are all in fact related to its Atlantic Avenue Bypass Initiative before either the DRB or in opposition to PKC's Motion. R.05288. 71. These twenty-three CPs are described, in chronological order, as follows:
Change Description
Add'l CP Nos.
Canceled Traffic Alerts for Mainline Excavation
869
Revisions to Atlantic Avenue and Kneeland Street Roadway Relocation
915
Stop Work Order on Planned Pedestrian Switch for Seq 4
934
Cancellation of Existing Traffic Alerts and Advisories
936
Mod 297ID - CP 575 - Atlantic Avenue Bypass - Summer Street Phase 3 Realignment for the Transitway Station Sequence 4
947
Mod 297IE - CP 575 - Atlantic Avenue Bypass - Summer Street Relocation
950
Mod 297IL-IM - CP 575 - Atlantic Avenue Bypass - Kneeland Street Cul-de-Sac
950A; 950B
Mod 297IF-IK - CP 575 - Atlantic Avenue Bypass - Kneeland Street Cul-de-Sac
951; 974; 974A-D
Steel Erection Delays Due to Traffic Repeal
952
Contingency Pedestrian Walkway Through Work Zone Between South Station and OFC
959
Repair Traffic Signal at Surface Street and Lincoln Street
966
North Transitway Construction Sequence Modification
986
Repair Post at Surface Street and Beach Street Due to Vehicle Accident (Added Scope in AAB)
996
Pedestrian Signal Repair at Kneeland Street/Mass Pike On-Ramp/Surface Artery
1015
Interim Road on Atlantic Avenue from Summer Street to Congress Street
1016
FRB Reconstruction Delays, Acceleration, and Mitigation
1026
Accelerate Opening of Interim Roadway for C18A2 Contractor
1027
Accelerate Opening of Ramp A and Atlantic Avenue
1028
Signal Maintenance at Kneeland Street and Surface Street
1032
Accelerated in Inefficient Installation of Crosswalks
1126
a. Canceled Traffic Alerts for Mainline Excavation (CP 869) 72. Alerts and advisories are temporary measures to close a sidewalk or traffic lane to facilitate construction. R.05817. The Atlantic Avenue Bypass necessitated added alerts and advisories which, PKC says, impacted the cost and time needed to complete the work. R.04071. 73. In CP 869, PKC claimed that it had an approved traffic alert and was ready to commence its work shift at 3:00 PM on November 24, 1999, the day before Thanksgiving. Per the C11A1 Contract and prior to MassDOT's issuance of the Atlantic Avenue Bypass, PKC was allowed to work the day before Thanksgiving. R.05163-R.05164; R.09898-R.09933. However, MassDOT canceled existing traffic alerts at 2:30 PM that day. This cancellation caused a work stoppage of all trucking/hauling in support of the Mainline excavation. R.05163-R.05165; R.09898-R.09933. PKC's crews were reassigned to other tasks, contributing to loss of productivity. R.05163-R.05165; R.09898-R.09933. But for the Atlantic Avenue Bypass Initiative, the traffic alert would not have been required. See, e.g., R.09904 (pertaining to work on Surface Street, which was outside the geographic limits of the original C11A1 Contract (R.05816)). 74. CP 869 was opened for cost tracking purposes. R.09907; R.09909. DRB3 found this claim to be arbitrable, awarded $19,491 to PKC for its direct costs, and additionally awarded substantial impact costs as part of a larger award for impact costs relating to a number of CPs. R.05288-R.05291; R.05163-R.05165; R.05195-R.05198. 75. The Project Director's decision ruled that CP 869 was not subject to arbitration because was is not separately listed on Exhibit 1, and rejected PKC's claim to compensation as to both direct and impact costs. R.06115; R.06130, R.06138-R.06139.
[11]This MBTA Impact award was substantial. As detailed below (¶ ¶ 96-203), DRB2 entered it as an arbitral award; MassDOT filed an action to vacate the award because the claim was not listed on Exhibit 1; it later sought a voluntary dismissal, and the court entered an order confirming the award. The Project Director maintained that the City of Boston cancelled the traffic alert, and that PKC had notice as early as November 15 that the City would have the right to do this. R.06130.
b. Revisions to Atlantic Avenue and Kneeland Street Roadway Relocation (CP 915) 76. On April 28, 2000, the night before a scheduled relocation of Kneeland Street and Atlantic Avenue, MassDOT changed the plans and realignment which, PKC alleges, resulted in additional costs to it. This relocation was a necessary part of the Atlantic Avenue Bypass. The revised roadway relocation was delayed and implemented the following day. This relocation was a necessary part of the Atlantic Avenue Bypass Initiative; otherwise, it would not have been required. R.05834-R.05835; R.09970-R.10017; R.10063-R.10067. 77. CP 915 was opened to separately track the costs, and PKC reserved the right to impact damages. R.09971. DRB4 found this claim to be arbitrable because it was part of the Atlantic Avenue Bypass and awarded PKC $4,092 in direct costs (less than the $13,309 sought) and rejected PKC's claim for impact costs. R.05834-R.05835. 78. The Project Director's decision ruled that CP 869 was not subject to arbitration because it was not separately listed on Exhibit 1, but treating the DRB award as advisory and noting that MassDOT had at the hearing agreed PKC was due the $4,092, accepted " only" this figure. R.06986; R.06988.
c. Stop Work Order on Planned Pedestrian Switch for Sequence 4 (CP 934) 79. CP 934 claims that in preparation for a traffic switch as part of the Atlantic Avenue Bypass, PKC presented the plan for a pedestrian walkway and temporary traffic switch to MassDOT on July 20, 2000, the work to commence the next day, July 21. PKC was informed by MassDOT that the planned work was approved and direction was given to proceed. PKC proceeded to set up labor crews and additional equipment for the traffic change, pedestrian walkway switch, partial street removal, temporary bridge removal and work zone reconfiguration. Additional work was scheduled by PKC to complete work zone reconfiguration, refabricate temporary bridges, place bituminous concrete and move the pedestrian cross walk signal to its revised temporary location. On July 21, 2000, however, MassDOT verbally (with subsequent written verification) directed PKC to stop work on the planned pedestrian walkway and temporary traffic switch and the planned operation shutdown. R.10029. 80. All of this work was a necessary part of the Atlantic Avenue Bypass, without which it would have been unnecessary. R.10018- R.10035; R.10063-R.10067. 81. CP 934 was opened to track the costs, and PKC reserved the right to impact costs. R.10018; R.10029. MassDOT referred to CP 934 in conjunction with the Atlantic Avenue Bypass. R.10024-R.10026. DRB4 found this claim to be arbitrable as part of the Atlantic Avenue Bypass Initiative, rejected most of PKC's claimed costs, and and awarded just $434 in damages. R.05509-R.05510; R.05835-R.05838; see R.05288-R.05291. 82. The Project Director's decision ruled that CP 869 was not subject to arbitration because it was not separately listed on Exhibit 1, but he accepted the DRB's modest award (its advisory award, in the PD's view) of $434. R.06477-R.06478; R.06503; R.06985-R.06986; R.06988.
d. Cancellation of Existing Traffic Alerts and Advisories (CP 936) 83. In CP 936, PKC claims that on August 3, 2000, MassDOT rescinded existing traffic alerts and advisories and unilaterally issued new traffic procedures the next day. PKC immediately placed MassDOT on notice that the cancellation of previously approved Traffic Alerts and Advisories was negatively impacting PKC's work, and opened CP 936 to track the costs. R.10038. 84. In related correspondence, MassDOT referred to CP 936 in conjunction with the Atlantic Avenue Bypass Initiative. R.10070-10072. 85. DRB4 found this claim to be arbitrable as part of the Atlantic Avenue Bypass. " As a binding arbitral award, DRB4 determine[d] that PKC is entitled to no further compensation for this CP, beyond what was awarded in the MBTA Impact Decision." R.05510-R.05512; R.05647-R.05648; R.05838-05839; see R.05288-R.05291. 86. The Project Director's decision concluded that CP 936 was not subject to arbitration because CP 936 was not separately listed on Exhibit 1, but " accept[ed] [the DRB's] finding and conclude[d] that no additional compensation is due PKC for claimed damages associated with CP 936." R.06477-R.06478; R.06503-R.06504; R.06649; R.06655; R.06985-R.06986; R.06988.
e. Mod 297 ID - " CP 575 - Atlantic Avenue Bypass" - Summer Street Phase 3 Realignment for the Transitway Station Sequence 4 (CP 947) 87. On September 28, 2000, MassDOT issued another subpart to Mod 297 called " Modification A297 ID, CPs 575 & 947 'Atlantic Avenue By-Pass'" incorporating 13 new drawings into the C11A1 Contract work. R.00402-R.00405. This time, the title of the modification itself was " CP575 Atlantic Avenue By-Pass" and MassDOT's letter transmitting the modification referenced File Nos. " CN-9.11A1.26.297, " " CN-9.11A1.26.575, " and " CN-9.11A1.26.947. " R.00402 (emphasis supplied). 88. MassDOT referenced " 947" because PKC on September 19, 2000 had opened CP947 to track the specific costs associated with this portion of the Atlantic Avenue Bypass work - in this case the Summer Street Phase 3 Realignment for the Transitway Station Sequence 4. R.10074; R.05843-R.05844. 89. In fact, Mod 297ID itself referred to CP 947. R.00404 (" The scope of work for this Modification 297 Part ID includes installing the work described in Project Letter No. C11A1-6608, dated 09/14/00 ... previously transmitted to PKC and referenced by PKC under CP No. 947 (PKC Letter No, 6664, dated September 19, 2000)"). 90. DRB3 and DRB4 both found that CP 947 was arbitrable as part of the Atlantic Avenue Bypass Initiative, and DRB4 awarded PKC $16,017 in direct costs while denying any compensation for impact. R.05288-R.05291; R.05297; R.05385; R.05515-R.05516; R.05843-R.05844. 91. The Project Director's decision concluded that CP 947 was not subject to arbitration because was is not separately listed on Exhibit 1, but noting that " [t]he CA/T agreed that PKC is entitled to compensation for proven direct costs, " accepted the $16,017 number. R.06477-R.06478; R.06505; R.06985-R.06986; R.06989.
f. Steel Erection Delays due to Traffic Repeal (CP 952) 92. The day that Transitway turnaround steel work was to start, MassDOT rescinded the traffic plans which were part of the Atlantic Avenue Bypass. The revised MassDOT traffic management procedures prohibited PKC from removing temporary deck stones at the Transitway turnaround and from using its street level crane in performing this work. R.10275; R.10279-R.10281. 93. The result, PKC claims in CP952, was that it was forced to install the structural steel from below, utilizing smaller cranes, resulting in a significant increase in manual labor, creating a far less efficient operation. PKC opened CP 952 to track the costs, reserving its right to impact damages. R.10275; R.10279-R.10281; R.10283. 94. CP 952 arose because of MassDOT's change to the pre-approved TMPs as part of the Atlantic Avenue Bypass, then the rescission of related traffic plans. R.10279-R.10281. MassDOT recognized at the time that CP 952 was an offshoot of the Atlantic Avenue Bypass. R.10277-R.10278; R.05523-R.05525. 95. DRB4 concluded:
[13]There were various " Omnibus" claims during the life of the project. The one referenced here had been submitted by PKC in 2006, and concerned both direct and impact costs resulting from arising out of work on the Red Line station and the Transitway. R.05362. DRB4's decision on it awarded PKC $4,587,775 on claims (including the CPs referenced in the text) that it deemed subject to binding arbitration, and recommended further compensation to PKC of $2,867,360 on claims it deemed non-arbitrable. [14]" Included in the scope of this change were removals of C11A1 finishes including hung ceilings and painting. CA/T also issued revisions to the electrical and mechanical drawings to meet the Finish contract's granite floor, granite wall panels, and drop ceilings. PKC then priced the changes to C11A1 needed to support Finishes work, some of which were additive and some deductive." R.05430. The term " Transitway" (or " South Boston Piers Transitway") refers to Silver Line Phase II, by which the existing MBTA system was connected, via trackless trollies and low-pollution fuel buses running under- and above-ground, with the World Trade Center and the South Boston Piers area. Construction of the Silver Line box tunnel was Phase 4 of the C11A1 contract.
1091. [CP 952] is another of the CPs that flows from the cancellation of existing approvals that was discussed in connection with CP 936 et seq., above. PKC had an approval in hand which was cancelled. As noted in the discussion on CP 936, DRB4 sees no impropriety in the City, through [MassDOT], moving towards stricter enforcement of existing contractually-established procedures. As also noted in that discussion, DRB4 does have pause when already-issued permissions are involved and are being rescinded. In such instance, a contractor would have made some preparations in reliance upon the receipt of the approval. DRB4 therefore concludes that PKC is entitled to compensation for the direct costs and impact that resulted from the rescission.
1095. This CP is subject to Binding Agreement, because it is involved in the cost of implementing the Atlantic Avenue Bypass.R.05525. The DRB awarded PKC $40,778 in compensation. Id. 96. The Project Director's decision concluded that CP 952 was not subject to arbitration because CP 952 was not separately listed on Exhibit 1. Treating the DRB's award as advisory, he rejected it and " conclude[d] that $0 is due PKC for claimed damages associated with CP 952." R.06477-R.06478; R.06506-R.06507.
g. Mod 297 IE - " CP 575 - Atlantic Avenue Bypass" - Summer Street Relocation (CP 950) 97. MassDOT issued Modification 297 IE unilaterally on January 26, 2001 with the reference " Contract Modification A297 Part IE CP 575 - Atlantic Avenue Bypass" and file references " CN-9.11A1.26.575" and " CN-9.11A1.26.297." R.00439-00442 (emphasis supplied). As it had with previous Mod 297 subparts, MassDOT titled this subpart " CP575 Atlantic Ave By-Pass" and further detailed the next phase of Summer Street relocation plans via the issuance of 17 new contract drawings. R.00441. 98. PKC opened file CP 950 to track changes associated with this part of the Atlantic Avenue Bypass, referencing the Atlantic Avenue Bypass Directive and registering its " vehement[] objection] to the Project's continued issuance of zero cost Modifications i.e., 297ID, 297IE, 297IF." It proposed $269,965 for the direct costs of the Summer Street relocation work. R.10230-R.10231; R.10236. 99. MassDOT, too, referred to CP 950 in conjunction with the Atlantic Avenue Bypass Initiative. R.10202-R.10204. Both DRB3 and DRB4 determined that CP 950 was arbitrable because it was part of the Atlantic Avenue Bypass. R.05288-R.05291; R.05297; R.05517-R.05520; R.05844-R.05846. 100. DRB3 awarded PKC a time extension for this CP and DRB4, in a 2-1 decision, awarded damages of $230,240 in direct costs. R.05247-R.05251; R.05517-R.05520; R.05844-R.05846. 101. The Project Director's decision concluded that CP 950 was not subject to arbitration because CP 950 was not separately listed on Exhibit 1. He sided with the minority member of DRB4, and awarded $0 in damages. R.06262-R.06263; R.06270-R.06272; R.06477-R.06478; R.06506; R.06985-R.06986; R.06989-R.06991.
h. Contingency Pedestrian Walkway Through Work Zone Between South Station and OFC (CP 959) 102. As part of the Phase 3 Summer Street Alignment (part of CP 950), the City of Boston required that MassDOT have a contingency plan to accommodate the Atlantic Avenue Bypass and peak pedestrian flows at the Summer Street crosswalk if the current area proved to be inadequate. On October 26, 2000, CA/T issued Mod 848 in the sum of $25,000 to cover the cost of this work. R.05848-R.05850. 103. MassDOT then directed PKC to install a contingency overflow walkway from the South Station head house corner to the One Financial Center corner of Dewey Square through PKC's work zone. R.05848-R.05850. 104. On June 21, 2002, PKC proposed $36,061 for the direct costs of the work, reserving impacts and consequential damages to other work. PKC had been paid $19,224 out of the $25,000 originally authorized under Mod 848. R.05848-R.05850. 105. The Phase 3 Summer Street Alignment work was an integral part of the Atlantic Avenue Bypass. Specifically, the overflow walkway would not have been required in the absence of the Atlantic Avenue Bypass. R.05848-R.05850; see R.10295. 106. PKC opened CP 959 to track the costs of this issue and PKC reserved its right to impact damages. R.10290. 107. The DRB found that this CP was arbitrable because it was part of the Atlantic Avenue Bypass and awarded damages to PKC in the amount of $4,596 for its direct costs. R.05848-R.05850. 108. The Project Director's decision concluded that CP 959 was not subject to arbitration because it was not separately listed on Exhibit 1, but agreed that PKC was owed $4,596 for its direct costs (as MassDOT had conceded to the DRB). R.06985-R.06986; R.06993.
i. Mod 297s IF through IM - " CP 575 - Atlantic Avenue Bypass" - Kneeland Street Cul-de-Sac (CPs 950A, 950B, & 951/974/974A-D) 109. MassDOT issued Modification 297 IF (" Mod 297IF") unilaterally on January 26, 2001. Mod 297IF incorporated an additional 12 traffic management drawings into the C11A1 Contract, referenced " CP575 Atlantic Ave By-Pass" and continued the filing number " CN-9.11A1.26.575" and " CN-9.11A1.26.297." This portion of the work (called the " Kneeland Street Cul-de-sac") detailed the traffic management associated with the next phase-out of MassDOT's Atlantic Avenue Bypass Initiative. R.00443-R.00446. 110. PKC opened CP 974 to track its costs associated with this part of the Atlantic Avenue Bypass Initiative. R.10230-R.10231; R.05852-R.05855. 111. MassDOT issued Modification 297IG (" Mod 297IG") unilaterally on February 28, 2001. R.00452-R.00455. This subpart incorporated an additional four traffic management drawings into the C11A1 Contract, referenced " CP575 Atlantic Ave By-Pass" and continued using the filing numbers " CN-9.11A1.26.575" and " CN-9.11A1.26.297." The work detailed the traffic management plans for the next step of the phasing out of the Atlantic Avenue Bypass known as the " Kneeland Street Cul-de-sac/Phase 2 Traffic Management plans (Surface Restoration Step 2B)." R.00452-R.00455. 112. PKC, in its March 9, 2001 letter in response to the unilateral modification, asserted that this modification caused added expense to PKC as a result of changes to traffic schemes and construction sequencing. PKC therefore opened CP 974A to track these costs associated with the Atlantic Avenue Bypass Initiative. R.00456-R.00457; R.05852-R.05855. 113. On March 21, 2001 the CA/T issued Modification 297 IH (" Mod 297IF") " CP 575 - Atlantic Avenue Bypass" unilaterally to PKC including four new contract traffic management plans for Step 2C of the Atlantic Avenue Bypass phase-out. MassDOT continued using the filing numbers " CN-9.11A1.26.575" and " CN-9.11A1.26.297" in its correspondence as well as " CP 575 - Atlantic Avenue Bypass" in its letter reference heading and modification heading. R.00458-R.00461. 114. PKC objected to Mod 297IH and opened CP 974B to track this portion of the added costs associated with the Atlantic Avenue Bypass Initiative. R.00462-R.00463; R.05852-R.05855. 115. On May 1, 2001 the CA/T issued Modification 297 IJ (" Mod 297IJ") " CP 575 - Atlantic Avenue Bypass" unilaterally to PKC including ten new contract drawings for Step 3 A of the Atlantic Avenue Bypass phase-out. MassDOT continued using the filing numbers " CN-9.11A1.26.575" and " CN-9.11A1.26.297" in its correspondence as well as " CP 575 - Atlantic Avenue By-Pass" in its letter reference heading and modification heading. R.00464-R.00467. 116. PKC objected to Mod 297IH and opened CP 974C to track this portion of the added costs associated with the Atlantic Avenue Bypass Initiative. R.00468-R.00469; R.05852-R.05855. 117. As it had in prior letters objecting to CA/T's various subparts of Mod 297, PKC again " reiterate[d] [its] strong objection to the Project's continued issuance of zero cost Modifications" and continued to cite the original change - the Atlantic Avenue Bypass, CP 575. R.00468-R.00469. 118. On July 3, 2001, CA/T issued Modification 297 IK (" Mod 297IK") " CP 575 - Atlantic Avenue By-Pass" unilaterally to PKC including 17 new contract drawings for Step 4A of the Atlantic Avenue Bypass phase-out. MassDOT continued using the filing numbers " CN-9.11A1.26.575" and " CN-9.11A1.26.297" in its correspondence as well as " CP 575 - Atlantic Avenue By-Pass" in its letter reference heading and modification heading. R.00473-R.00476. 119. PKC continued to object to the various subparts of CA/T's unilateral modification and opened CP 974D to track this portion of the change associated with the Atlantic Avenue Bypass - CP 575. R.00477-R.00478; R.05852-R.05855. 120. On September 6, 2001, CA/T issued Modification 297 IL (" Mod 297IL") " CP 575 - Atlantic Avenue By-Pass" unilaterally to PKC including 20 new contract drawings for Step 5A, Stages 1-3, and Step 5B, Stage 1 of the Atlantic Avenue Bypass phase-out. On September 13, 2001, CA/T issued Modification 297 IM (" Mod 297IM") " CP 575 - Atlantic Avenue By-Pass" unilaterally to PKC including 36 new contract drawings for Step 5C, Stages 1& 2, and Step 5D, Stage 1-3 of the Atlantic Avenue Bypass phase-out. R.00479-R.00486. 121. This work detailed the traffic management plans at the Summer Street crossing of Atlantic Avenue. MassDOT continued using the filing numbers " CN-9.11A1.26.575" and " CN-9.11A1.26.297" in its correspondence as well as " CP 575 - Atlantic Avenue By-Pass" in its letter reference heading and modification heading. R.00479; R.00483. 122. PKC continued to object to the various subparts of Mod 297 and opened CP 950A and CP950B to track these portions of the change associated with the Atlantic Avenue Bypass - CP 575. R.00487-R.00488. 123. PKC additionally used CP 951 to track direct and impact costs associated with Mods 297IE-IM. R.05520. 124. MassDOT associated CP 951 with the Atlantic Avenue Bypass. R.10340 (referring to File No. " CN-9.11A1.24.951" in conjunction with " Atlantic Avenue Initiative"). 125. Both DRB3 and DRB4 found that CPs 951, 974, 974A, 974B, 974C, 974D, 950A and 950B were arbitrable as part of the Atlantic Avenue Bypass Initiative and the DRBs awarded time extensions and damages (at least, $27,487 on CP 951) to PKC. R.05184-R.05187; R.05189-R.05191; R.05197; R.05251-R.5255; R.05288-R.05291; R.05297; R.05520-R.05523; R.05528-R.05532; R.05652-R.05661; R.05847-R.05848; R.05852-R.05855; R.05259. 126. The Project Director concluded that these CPs were not subject to arbitration because they were not separately listed on Exhibit 1, and overturned the DRB's $27,487 award on CP 951. R.06115; R.06135-R.06136; R.06262-R.06263; R.06273-R.06275; R.06477-R.06478; R.06506; R.06508-R.06509; R.06985-R.06986; R.06992; R.06994; R.06649; R.06656-R.06657.
j. Repair Traffic Signal at Surface Street and Lincoln Street (CP 966)
Repair Post at Surface Street and Beach Street Due to Vehicle Accident (Added Scope in AAB) (CP 996)
Pedestrian Signal Repair at Kneeland Street/Mass Pike On-Ramp/Surface Artery (CP 1015)
Signal Maintenance at Kneeland Street and Surface Street (CP 1032) 127. In order to implement the Atlantic Avenue Bypass, MassDOT added work on streets and sections of streets that were outside the contract limits. R.02345 (MassDOT acknowledging that the Atlantic Avenue Bypass required PKC to perform " improvements to streets outside the existing Contract limits to be utilized by the bypass"); R.05816. 128. MassDOT directed PKC to perform emergency repair of the traffic signals located in these new areas that were added to the geographic limits of C11Al. The costs of maintaining and repairing these traffic signals are therefore costs related to implementing the Atlantic Avenue Bypass. R.05851-R.05852; R.05855; R.05858-R.05859; R.05865-R.05866. 129. PKC opened CP numbers 966, 996, 1015 and 1032 to track these costs. R.10331; R.10446; R.10449-R.10450; R.10459-R.10467; R.10607-R.10630; R.05851-R.05852; R.05855; R.05858-R.05859; R.05865-R.05866. 130. DRB4 found that CPs 966, 996, 1015 and 1032 were arbitrable because they were part of the Atlantic Avenue Bypass and awarded damages of $3,500, $1,150, $4,205 and $4,746, respectively, to PKC. R.05851-R.05852; R.05855; R.05858-R.05859; R.05865-R.05866. 131. The Project Director's decision concluded that these CPs were not subject to arbitration because they were not separately listed on Exhibit 1. He accepted the DRB awards of $3,500 and $1,150 on CPs 966 and 996, but rejected or reduced the awards on CP 1015 ($4,205 reduced to $0) and CP 1032 ($4,746 reduced to $2,263). R.06985-R.06986; R.06993; R.06995; R.06996.
k. North Transitway Construction Sequence Modification (CP 986)
Interim Road on Atlantic Avenue from Summer Street to Congress Street (CP 1016)
FRB Reconstruction Delays, Acceleration, and Mitigation (CP 1026)
Accelerate Opening of Interim Roadway for C18A2 Contractor (CP 1027) 132. As part of the Atlantic Avenue Bypass Initiative, PKC was directed by MassDOT to vacate a portion of the north end of the C11A1 Contract, in support of adjacent CA/T Contract C18A2 and in response to deadlines set by the Federal Reserve Bank (" FRB"). PKC was also directed to install an interim roadway for Atlantic Avenue traffic from Summer Street to Congress Street by December 31, 2001 - an area that should have been completely devoid of traffic until substantial completion, in accordance with the Atlantic Avenue Bypass as issued by MassDOT in Mod 297IA. R.05534-05538; R.05859-R.05860; R.05557-R.05560; R.05860-R.05861. 133. In addition to the added work for the roadway, PKC was forced to accelerate and/or resequence all remaining work in the area to meet the directive. Because PKC's work area and laydown area were eliminated, PKC was forced to perform more work outside of fixed work areas, including material deliveries, by setting up temporary road closures during off-peak hours. But for the Atlantic Avenue Bypass, the work and the related delays and impacts would not have taken place. R.05534-R.05538; R.05859-R.05860; R.05557-R.05560; R.05860-R.05861. 134. PKC opened CPs 986, 1016, 1026 and 1027 to track these costs. R.10437; R.10564; R.10502-10504; R.10550. 135. Both DRB3 and DRB4 found that CPs 986, 1016, 1026 and 1027 were arbitrable as part of the Atlantic Avenue Bypass. For these four CPs plus CP 1028, DRB declined to award separate compensation, but included it in an award on PKC's Omnibus Impact Claim. R.05288-R.05291; R.05297; R.05255-R.05256; R.05534-R.05538; R.05859-R.05860; R.05557-R.05560; R.05860-R.05861; R.05259; R.05425; R.05591-R.05595. 136. The Project Director's decision concluded that these CPs were not subject to arbitration because they were not separately listed on Exhibit 1. He agreed with DRB4's determination that there would be no separate compensation on these CPs or on CP 1028. R.06262-R.06263; R.06275-R.06276; R.06477-R.06478; R.06510; R.06513; R.06514.
l. Accelerate Opening of Ramp A and Atlantic Avenue (CP 1028) 137. When it implemented the Atlantic Avenue Bypass initiative with Mod 297IA, MassDOT had stated that " all lanes of Atlantic Avenue within the C11A1 limits of work shall be fully reopened to traffic no later than the date of Milestone 2, Substantial Completion." The contract schedule did not provide that Atlantic Avenue would be reopened to full traffic, especially in its final condition, until after all the contract work was complete or substantial completion attained. R.05562-R.05564; R.05862-R.05865. 138. In a letter dated November 9, 2001 in connection with the Atlantic Avenue Bypass, however, MassDOT directed PKC to complete all work necessary to make Atlantic Avenue fully ready to receive vehicular traffic on June 1, 2002. R.10577; R.05862-R.05865; R.10580. 139. PKC opened CP 1028 to track anticipated costs connected to the early opening. R.10576; R.10580. 140. Both DRB3 and DRB4 concluded that the effect of an early opening of Atlantic Avenue on PKC's operations was substantial, and found that this CP was arbitrable because it was part of the Atlantic Avenue Bypass. DRB4 awarded damages to PKC in the amount of $27,263 as compensation for direct costs incurred for traffic control incurred in connection with the early opening, and (as with CPs 986, 1016, 1026 and 1027) included additional " compensation for impacts" in its award on PKC's Omnibus Impact Claim. R.05288-R.05291; R.05297; R.05562-R.05564; R.05862-R.05865. 141. The Project Director's decision concluded that CP 1028 was not subject to arbitration because it was not separately listed on Exhibit 1, treated DRBB4's $27,263 award as a " recommendation, " rejected it, and awarded $0 instead. R.06477-R.06478; R.06514; R.06985-R.06986; R.06996.
m. Accelerated and Inefficient Installation of Crosswalks (CP 1126) 142. In CP 1126, PKC alleged that the accelerated reopening of Atlantic Avenue interrupted the logical construction sequencing for the installation of curb and paver crosswalks and that, having diverted its resources to complete the work necessary to open Atlantic Avenue by the desired date, it had to remobilize to complete the curb and crosswalk installation. This work was necessarily performed at premium cost during nights and weekends due to the lack of work zones and inability to divert traffic in the day-time work hours. R.05724; R.10648-R.10654. 143. PKC asserted, and DRB4 agreed, that these cost impacts were the direct result of the Atlantic Avenue and MassDOT's directive to open it to traffic prior to substantial completion as completed in Mod 297IA. R.05726; R.10648-R.10654. DRB4 put it thus:
CPs that relate to the implementation of the CA/T Atlantic Avenue Bypass directive and involve the aggregate final cost of such implementation through the end of the Contract work, regardless of their date, are subject to the Binding Agreement. Included in this category are CPs 575, 921, 947, 950, 950A, 950B, 951, 974, 974B, 974C, 986, 992, 1016, 1026, 1028, 1049, 1075, 1124, 1126, 1130. (This is not necessarily an all-inclusive list, as other CPs involving the Bypass, which were not involved in the Time portion of the Omnibus claim, may be presented in other portions of the Omnibus Claim.)R.05385. 144. Both DRB3 and DRB4 found that CP 1126 was arbitrable as part of the Atlantic Avenue Bypass. DRB4 awarded PKC $65,125 as compensation for its direct costs, and included impact costs as part of its award on the Omnibus Impact Claim. R.05288-R.05291; R.05297; R.05385; R.05724-R.05726. 145. The Project Director's decision concluded that CP 1126 was not subject to arbitration because it was not separately listed on Exhibit 1. He rejected the DRB " recommendation, " concluded (as the DRBs had not) that " the CP was created by PKC's own scheduling problems, " and awarded $0. R.06649; R.06668.
n. Mod 297s IN - " CP 575 - Atlantic Avenue Bypass" 146. On August 6, 2002, MassDOT issued unilateral Modification 297 IN (" Mod 297IN") " CP 575 - Atlantic Avenue By-Pass, " which included 56 new contract drawings to replace drawings issued in Mod 297 subparts IL & 297IM and incorporated all prior subparts, including Mod 297IA and its directive to track costs. R.05288-R.05289; R.10996-R.10999.
4. Relationship Between these 23 CPs and CP 575. 147. MassDOT repeatedly acknowledged that PKC, when opening the new CP numbers discussed above, was tracking costs of the Atlantic Avenue Bypass as required by Mod 297. See, e.g., R.00402; R.00404; R.00948 (MassDOT position paper to DRB3 referring to " CPs 974 thru D - Atlantic Avenue Bypass Management Plans"); R.01225 (similar, MassDOT asserting that " CP 950 relates to the CA/T's alleged failure to timely provide Traffic Management and Construction Sequence Plans (TM& CSPs) for the realignment of traffic on Summer Street. The realignment was needed to accommodate PKC's required work zones in conjunction with the Atlantic Avenue Bypass."); R.02132-R.02133 (similar, MassDOT discussing CP 947 in conjunction with Mod 297ID); R.00951 (MassDOT acknowledging that PKC initiated CP 1028 in response to MassDOT's directive to reopen Atlantic Avenue to traffic). 148. For example, in its letter transmitting Mod 297ID, MassDOT specifically referred to CP 947 and in the contract modification itself, MassDOT stated: " The scope of work for this Modification 297 Part ID includes installing the work described in Project Letter No. C11A1-6608, dated 09/14/00 ... previously transmitted to PKC and referenced by PKC under CP No. 947 (PKC Letter No, 6664, dated September 19, 2000). R.00402; R.00404. 149. MassDOT specifically referenced the additional Atlantic Avenue Bypass CP numbers in correspondence in conjunction with CP 575 and/or the Atlantic Avenue Bypass Initiative. See, e.g., R.00402; R.10070-R.10072; R.10277; R.10176; R.10374. 150. In addition, and as described above with respect to each of the 23 CPs, MassDOT continued to reference CP 575 when it released additional plans for the Atlantic Avenue Bypass. See also R.00489 (May 17, 2002 MassDOT letter issuing TMPs and stating that " [a] formal Contract Modification A297 Part I, CP 575 - Atlantic Avenue Bypass will follow shortly."). 151. MassDOT has acknowledged that the various subparts to Mod 297IA served to implement various portions of the Atlantic Avenue Bypass. R.02339-R.02378. 152. Nevertheless, the Project Director's decisions on the Atlantic Avenue Bypass CPs failed to address (1) the substance of the various subparts of Mod 297IA, or the facts (2) that in documents and correspondence relating to Modification A297I and its subparts, MassDOT continued to reference CP 575, (3) that MassDOT recognized that PKC was tracking its Atlantic Avenue Bypass costs utilizing additional CP numbers, (4) that MassDOT also referenced these additional CP numbers as part of CP 575 and the Atlantic Avenue Bypass, and (5) that these CP numbers all relate to the Atlantic Avenue Bypass, or (6) the DRBs' findings concerning the arbitrability of each of the 23 Atlantic Avenue Bypass CPs. The sole basis advanced for concluding that these CPs presented non-arbitrable claims was that the numbers given them did not appear on Exhibit 1 to the 1999 Agreement.
G. The Five Non-Atlantic Avenue Bypass Claims. 153. Other Project changes, unrelated to CP 575 or the Atlantic Avenue Bypass but related to other CPs listed on Exhibit 1, gave rise to PKC claims. PKC tracked these claims using the following CP numbers: 611A, 622A, 900, 906, and 975. PKC contends that each of these CPs is an integral part of a claim on the parties' Exhibit 1 list of claims subject to arbitration.
1. CP 611A - Salvage Value for Scaffolding at 695 Atlantic Avenue. 154. CP 611A pertains to a credit due MassDOT pursuant to Contract Modification A312 for the salvage value of scaffolding at 695 Atlantic Avenue, a building known as the " Plymouth Rock Building." R.09723; R.09724. 155. DRB4 found that Contract Modification A312 required PKC to erect, maintain, and dismantle a scaffold at the Plymouth Rock Building and that upon dismantling, PKC was to " credit any monies from the return of the scaffold system to the Department." R.05825-R.05826. 156. DRB4 found that Contract Modification A312 was issued to resolve CP 611. R.05826. CP 611, which is listed on Exhibit 1, is described as " CP #611 - Plymouth Rock Building, Scaffolding." R.06196. 157. In a January 28, 2003 letter, MassDOT requested that PKC provide a credit proposal for scaffolding at 695 Atlantic Avenue as required by Contract Modification A312 and referenced CP 611 in the file number: " CN.9.11A1.24.611." R.09723 (emphasis supplied). PKC provided the requested credit proposal in response to MassDOT's letter and tracked this issue using " CP#611A." R.09724. 158. DRB4 found that the determination of the credit due for scaffolding was part of Contract Modification 312 and therefore subject to arbitration as part of CP 611, Noting that the parties had agreed on a credit of $11,305 and that the issue therefore was " theoretically ... a moot point, " DRB4 as a housekeeping matter " award[ed] CA/T the sum of $11,305 in full 17 payment for CP 611A, and determine[ed] that nothing further is due either Party." R.05825-R.05826. 159. Despite acknowledging that CP 611A pertains to " salvage value for scaffolding at 695 Atlantic Avenue, " the Project Director's decision concluded that CP 611A is not subject to arbitration because it is not separately listed on Exhibit 1. R.06986. 160. The Project Director held that CP 611A is not subject to arbitration because it is not separately listed on Exhibit 1, but as the parties had agreed and DRB4 had ordered, " conclude[d] that a $11,305 credit is due CA/T for CP 611A." R.06986.
2. CP 622A - MBTA Structural and Mechanical Drawings/Work To Support Follow-On Finishes. 161. CP 622A pertains to station finishes in the MBTA Transitway and Red Line areas of the job. R.09727-R.09788. Although CP 622 is listed on Exhibit 1 without a written description, the record indicates that it was a claim for costs arising out of all finishes work on the job. Because this work was not included in PKC's contract, MassDOT requested that PKC submit a proposal. The proposal PKC submitted was CP 622. The parties could not agree on terms; PKC withdrew CP 622; and the job was awarded to another contractor. The contract drawings for PKC's work did not match up in all respects with the anticipated finish work, so MassDOT issued RFP A0795, " Work to Support the Finishes" and PKC, on February 24, 2000, created CP 622A. R.06197; R.09738; R.05429-R.05431. 162. DRB4 found that the CP 622A finishes work was originally within the scope of the finishes work encompassed by the now defunct CP 622. R.05429-R.05431. 163. In a March 9, 2000 letter requesting that PKC come forward with proposed pricing for CP 622A, MassDOT associated CP 622A with CP 622. R.09745-R.09747 (referring to CP 622A in conjunction with file number " CN-9.11A1.24.622") (emphasis supplied). 164. DRB4 found that CP 622A is subject to arbitration as part of CP 622, reasoning as follows:
CP 622, which was on the Binding Agreement, was for the entire finishes work. CA/T ultimately broke the work down into preparation work, which was performed by PKC, and the actual finishes work, that was performed by another. As such, the CP 622A work was a portion of what was covered by CP 622; a portion was deleted for performance by the finishes contractor. DRB4 concludes that the CP 622A work is a portion of what was encompassed by CP 622 and therefore is subject to the Binding Agreement.R.05431. DRB4 awarded PKC $4,523 in compensation. 165. The Project Director's decision acknowledged that CP 622A pertained to station finishes, but concluded that it was not subject to arbitration because it was not separately listed on Exhibit 1. R.06478 (" [a]lthough CP 622 is listed on Exhibit 1, CP 622A, PKC's dispute, is not listed on Exhibit and is therefore only subject to a non-binding recommendation [by the DRB]."). Stating that " [a]ny and all costs associated with this change had been paid by the MBTA under unilateral Modification 795IA, " he ruled that " no compensation is due PKC for CP 622A." Id. 3. CP 900 - Additional Shear Studs in Invert Slabs. 166. In October of 1998, the parties executed Contract Modification 411 for the deletion of a shear key within the tunnel base slab and for the addition of shear studs where the shear key was to be eliminated. R.05172-R.05173. PKC responded with CP 466, which is listed on Exhibit 1 with the description " CP #466 - Deletion of Base Slab Shear Keyway." R.06193. 167. In CP 900, PKC claimed that the contract drawings had omitted shear studs in certain areas included as part of Contract Modification 411 and CP 466. PKC opened CP 900 to track costs associated with adding shear studs in these areas as originally contemplated by Contract Modification 411. R.09934-R.09950; R.05172-R.05173. 168. DRB3 found that CP 900 was subject to binding arbitration because the omitted shear studs was the same work required under Modification 411 and CP 466. It awarded PKC $42,871 for the direct cost of performing the work, and additionally found the PKC was entitled to impact costs for this and other items (the " Mainline Impact Claim"), on which it made an aggregate arbitral award for the period after May 1, 1999 of $41,105,121 and recommended an additional $9,643,236 on claims it had ruled were not subject to binding arbitration. R.05172-R.05173, R.05194-R.05214. 169. The Project Director's decision concluded that CP 900 was not subject to arbitration because it was not separately listed on Exhibit 1 and sided with MassDOT on the merits, awarding no compensation for direct costs. On the Mainline Impact Claim, the PD" conclude[d] that PKC is note [sic] entitled to any additional compensation for impacts to its mainline construction or for constructive acceleration for the period after May 1, 1999." R.06132-R.06133, R.06139. 4. CP 906 - Air Flue Conflict with East & West Drift #1 Concrete. 170. PKC submitted CP 906 on April 17, 2000, asserting that there was a newly discovered physical conflict in the contract drawings between MBTA Redline Station " drift" concrete added pursuant to Contract Modification 620 (" Mod 620") and proposed air flues in the Mainline Tunnel; as drawn, the concrete and the flues were to occupy (in part) the same space. As a result of this conflict, PKC had to chip the concrete it had previously poured pursuant to Contract Modification 620 and CP 716, to make room for the flues. R.09951-R.09969; R.05173-R.05174. 171. PKC had opened CP 716 - listed on Exhibit 1 as " CP #716 - Redline Drift I" - in response to Mod 620 in order to track the costs of the " drift" concrete and other related work on a time and materials basis. R.06199; R.09951-R.09969; R.05173-R.05174. 172. In its response to CP 906, MassDOT expressly referenced CP 716 and Contract Modification 620. R.09965-R.09966. 173. Had the physical conflict been known when CP 716 was opened, the costs would have been paid in Mod 620. R.05173-R.05174; R.09963-R.09964. 174. DRB3 found that CP 906 is part of and " inextricably intertwined" with CP 716 and Contract Modification 620 and therefore subject to arbitration. It awarded PKC $14,630 in direct costs on CP 906, and included it in the award of impact costs under the aforementioned Mainline Impact Claim. R.05173-R.05174. 175. The Project Director's decision concluded that CP 906 was not subject to arbitration because it was not separately listed on Exhibit 1. He rejected the DRB's solution and awarded nothing in direct costs; impact costs, of course, went the way of the rest of the Mainline Impact Claim. R.06115; R.06133-R.06134. 5. CP 975 - Structural Modifications of Access Tunnel Slab @ 101+00. 176. CP 975 pertains to the structural modification and redesign of the north east tunnel slab in the Red Line underpinning area as a result of changes required by value engineering change proposal (" VECP") number 6. The original C11A1 Contract design called for the north east slab to be constructed on granular backfill. The parties later entered into VECP No. 6, which called instead for the slab to rest on a combination of granular soil and a concrete drift wall. Contract Modification 68 implemented VECP No. 6. R.10406-R.10421; R.05191-R.05192; R.10411-R.10413. 177. PKC opened CP 108 to track costs in connection with VECP No. 6. CP 108 is listed on Exhibit 1 as " CP #108 - VECP #6." R.06187. 178. MassDOT has acknowledged that the CP 975 structural modification work " is a direct consequence of the incorporation of PKC's VECP No. 6 redesign Work into the C11A1 Contract...." R.10418. 179. DRB3 found that in agreeing to VECP No. 6, neither party anticipated that the north east slab would have to be redesigned and if they had, they would have accounted for the associated costs in the VECP. It found that CP 975 was " direct result of a mutual error in agreeing to the Modification 68 that implemented VECP6 and to CP 108 which is in Exhibit 1" and was therefore arbitrable, and it awarded " the sum of $12,980 for direct costs, plus compensation for minor impact" under the umbrella of the Mainline Impact Claim. R.05191-R.05192. 180. The Project Director's decision concluded that CP 975 was not subject to arbitration because it was not separately listed on Exhibit 1, but accepted the DRB's recommendation of $12,980 for direct costs. R.06115; R.06136. H. PKC's Claims for Impact Costs, Including Constructive Acceleration. 181. As described above (footnote 13 and ¶ 168), PKC sought impact costs, including constructive acceleration costs, in addition to the direct costs it incurred on the Project. Acceleration costs are a form of impact costs or damages, which are incurred by a contractor as a result of increasing the pace of the work. These costs are incurred by increasing the number of workers on the project, working overtime, adding equipment and resequencing the work. Acceleration costs may be incurred when delays occur and the owner does not grant time extensions. 182. The DRBs concluded, case by case, that impact costs for arbitrable claims are also subject to arbitration, and awarded PKC impact damages in some cases. See, e.g., R.05118-R.05121; R.05195-R.05213. 183. The DRBs also concluded, again case by case, that constructive acceleration damages for arbitrable claims are subject to arbitration, and awarded PKC constructive acceleration damages in some cases. See, e.g., R.05118-R.05120; R.05198; R.05213; R.05591-R.05594. 184. The Project Director rejected the arbitrability of impact costs and constructive acceleration costs on ground that they were not separately listed on Exhibit 1. See, e.g., R.06530 (" The parties did not agree to arbitrate in a binding fashion any dispute, claim or CP not specifically listed on Exhibit 1 of the Binding DRB Agreement."); R.06115-R.06138; R.06139-R.06140 (" ... PKC's claims for impact costs and constructive acceleration are not disputes listed on Exhibit 1 of the Binding DRB Agreement."); R.06141 (" The DRB's decisions concerning all other disputes not listed on Exhibit 1 of the Binding DRB Agreement" are recommendations, not arbitration awards); R.06262-R.06278; R.06289 (" Because the dispute concerning constructive acceleration is not listed on Exhibit 1 to the Binding DRB Agreement, the DRB's Decision is subject to my review ...."); R.06477-R.06521; R.06521-R.06522 (" The DRB made decisions on PKC's claims for impacts, 'access, ' 'resequencing' and for constructive acceleration associated with its MBTA Claim - dispute that are not listed on Exhibit 1 to the Binding DRB Agreement."). 185. The Project Director rejected these costs even for CPs which were concededly listed on Exhibit 1 and which the Project Director acknowledged are subject to arbitration. For example, in its Mainline Decision, DRB3 set forth a chart of CPs for which it awarded impact costs. R.05195-R.05196. DRB3 awarded impact costs for the following CPs which are listed on Exhibit 1: CPs 229, 277, 341, 510, 615, 699, 754, 769, 795. R.05195-R.05196; cf. R.06188, R.06190, R.06194, R.06196, R.06198, R.06200.R.06201. 186. Although the Project Director acknowledged that these Exhibit 1 CPs are arbitrable and are therefore " not subject to further review by the Project Director, " he nevertheless rejected impact costs for these CPs. R.06114, R.06138-R.06139. 187. In rejecting the arbitrability of PKC's impact and constructive acceleration costs, the Project Director did not address the language of the 1999 Agreement which provides that the DRB's arbitral authority extended to " PKC's claim for delay, inefficiency and/or other overall impact costs, " and which acknowledged that PKC could " present to the DRB, as part of these proceedings, an omnibus claim for a compensable time extension and/or for additional compensation from [MassDOT] for impact costs arising out of and/or related to the performance of the work identified in Exhibit 1." R.06230. 188. In its opposition to PKC's Motion, MassDOT has denied that the reason the Project Director rejected the arbitrability of impact and constructive acceleration costs was because they are not separately listed on Exhibit 1. Instead, according to MassDOT, the reason the Project Director rejected the arbitrability of impact costs and constructive acceleration costs is because the lump sum award included a " mix" of arbitrable and non-arbitrable claims. See MassDOT Opp., pp. 37-38, section entitled " The Project Director Never Said That Impact And Constructive Acceleration Costs For Exhibit 1 CPs Were Not Arbitrable." 189. What the Project Director did say was the following:
The DRB made decisions on PKC's claims for impacts and for constructive acceleration associated with its Mainline Claim - two disputes that are not listed on Exhibit 1 to the Binding DRB Agreement. Because the disputes concerning these claims are not governed by the Binding DRB Agreement, the DRB's Decision as to impacts and constructive acceleration are subject to my decision.R.06138. There is nothing here about commingled awards. 190. The DRBs' lump sum award of impact costs and constructive acceleration costs included the 23 Atlantic Avenue Bypass CPs and the 5 non-Atlantic Avenue Bypass CPs. R.05195-R.05197; R.05591-R.05594; R.05876; R.05736-R.05738. If these claims are arbitrable, then PKC's impact costs and constructive acceleration costs for these claims are also arbitrable. The DRBs were consistently careful to segregate what they deemed binding arbitration awards from non-binding recommendations. Because the DRBs, while not empowered to determine arbitrability, nonetheless got it right as a matter of law (see Conclusions of Law, below), this issue need not be explored further. I. The DRBs and Their Decisions. 191. There have been five DRB panels to date. As noted above (¶ 18), each panel has consisted of three highly qualified individuals with substantial construction and/or engineering experience. See Massachusetts Hwy. Dept. v. Perini Corp. , 444 Mass. at 367; R.06152-R.06153. The DRB3 and DRB4 Chairman, Robert Robertory, was a seasoned construction lawyer with decades of experience as an arbitrator and as a judge of the Department of Transportation Board of Contract Appeals. 192. The DRBs' functions were similar to that of a hearing officer. The DRBs held hearings, received hundreds of days' worth of testimony and documentary evidence and other written and oral submissions from the parties, and made recommendations concerning PKC's claims. See, e.g., R.05203; R.05217; R05367; Affidavit of Daniel Larche in Support of PKC's Motion for Judgment on the Pleadings on the Issue of Arbitrability (" Larche Affidavit"). 193. The DRBs heard live testimony and presentations from the following individuals:
Larche Affidavit, 1, 6, 7. 194. The engineers who issued the Project Director decisions, by contrast, did not attend any DRB hearings, and did not hold any hearings of their own. 1. The First DRB. 195. The first DRB panel issued arbitration awards on two claims shortly after the execution of the Binding DRB Agreement, and was disbanded in 1999. Massachusetts Hwy. Dept. v. Perini Corp., C.A. No. 00-4096, Paper No. 15, pp. 3-4 (Giles, J.) (Sept. 21, 2000). These awards are not at issue. 2. The Second DRB. 196. The second panel (the " Second DRB" or " DRB2") - consisting of entirely new members - served from 2000 to the end of 2005 and issued binding arbitration awards totaling approximately $57 million on six PKC impact and delay claims. R.07469-R.07539. These arbitration awards were confirmed by the Court. See SUCV2001-4452; SUCV2002-2342; SUCV2002-3032; SUCV2005-2399; SUCV2005-5473. 197. None of these awards are directly at issue on this Motion, but one DRB2 decision - its Order 16, dated December 2, 2005 - lives on in both parties' arguments concerning the arbitrability of certain claims later presented to DRB3 and DRB4, and so warrants some consideration here. 198. DRB2 explained that Order 16 was to be
Name
Title / Description
Daniel Larche
PKC current Project Manager (and former superintendent and field engineer)
John Loftus
PKC Project Executive
Richard Melin
Former PKC Project Manager
Joe Folco
PKC Project Engineer
Gary Orlando
PKC Utility and Restoration Engineer / Cost Engineer
Matt Burnham
MBTA Field Engineer
Sherry Loftus
PKC Claims Manager
Steve Kolodko
PKC Utility and Restoration Superintendent
Bob Murphy
PKC Scheduler and Traffic Manager
Hank Kelly
Kiewit Construction Co., Inc. (lead estimator on C11A1 Contract bid)
Mark Keppeler
Kiewit Construction Co., Inc.
Bob Band
President, Tutor Perini Corporation
John Testa
Vice President, Kiewit Construction Co., Inc.
Dale Pyatt
President, Jay Cashman, Inc.
Dan Kass
Claims Expert, Jacobs Associates (for PKC)
Dan Quackenbush
Scheduling Expert, Quackenbush and Associates, Inc. (for PKC)
Laura Miller
Accounting Expert, Navigant Consulting, Inc. (for PKC)
Dennis Staats
Accounting Expert, Navigant Consulting, Inc. (for PKC)
Steven Dusseault
Resident Engineer (on behalf of MassDOT)
Edward Whelan
PMA Consultants, LLC (on behalf of MassDOT)
Patrick McGeehin
FTI Consulting, Inc. (on behalf of MassDOT)
the DRB's Binding Order relative to the following Claims: PKC Mainline Tunnel Impact Claim; PKC MBTA Redline Station, Transitway and FRB Impact Claim (MBTA Impact Claim); CA/T Atlantic Avenue Bypass Claim; and CA/T Pin-Pile Deletion Claim.R.07529.R.07530. 199. In Order 16, DRB2 made the following awards:
7.1 Mainline Impact Claim from December 2, 1996 to April 30, 1999 Amount of additional compensation to PKC: $13,457,000
7.2 MBTA Impact Claim from December 2, 1996 to April 30, 1999 Amount of additional compensation to PKC: $2,275,000 7.3 Atlantic Avenue Bypass and Deletion of Pin-Piles Credit Amount to be deducted from Contract Amount: ($3,770,000)R.0536-R.0537. 200. DRB2 began by noting that it had " previously ruled that the adjudication of the above-referenced Claims is within the jurisdiction of the Board in accordance with the Parties' Binding Agreement of March 25th, 1999." It also recognized that its own days were numbered - the decision to disband it had been made more than five years before (see note 14, below), and DRB2 was close to finishing up the business previously committed to it - and so took care to define the scope of the disputes that Order 16 would resolve and " those matters which are excluded from our Order, are still open for resolution and, if they remain disputed between the Parties, would fall under the jurisdiction of subsequent Boards/Courts." 201. Next, DRB2 addressed an argument advanced by MassDOT in that proceeding, relied upon by the Project Director in subsequent rulings, and resurrected for the present Motion: that Contract Modifications 558II and 587ID placed " temporal limitations of the impact claims that the parties intended to submit to binding resolution." See, e.g., R.06241-R.06242. On this, DRB2 had the following to say:
While there is some conflicting and/or ambiguous language in Modification 587 ID-Schedule Direction, the Board finds that the intent of the Parties in their execution of the Modification was clearly not to waive the Contractor's right to file an Impact Claim at a later date, nor to " cut off" Impact costs by any date certain.
In fact the detailed Cost Estimate which was attached to Contract Modification 558 II-Added Contract Milestones, supporting The Contract Schedule of Prices and Quantities of both Modifications 587 ID and 558 II, contains no item for the settlement of the Impact Claim which was discussed between the Parties for years prior to, and after the signing of Modification 587 ID in August, 1999. Significantly, CA/T provided no documentary evidence to demonstrate that the Parties had agreed that Modification 587 ID would supersede the Binding Agreement. The Board finds that Modification 587 ID does not bar or limit the Contractor's contractual rights to submitting an Impact Claim. In fact the Binding Agreement uses the terms: " PKC's claim for delay, inefficiency and/or overall impact costs, " and " omnibus claim for a compensable time extension and/or for additional compensation..."
The Board finds that the disputes between the Parties over the PKC Mainline Impact Claim for costs through Substantial Completion are subject to binding arbitration in accordance with the Binding DRB Agreement dated March 25, 1999.R.07530-R.07531 (emphasis in original). 202. This finding was entirely consistent with the language of the Mods themselves, which expressly preserved PKC's right to pursue a time extension and time-related costs by explicitly " excluding" from their scope: " time and time related costs, limited to the right to pursue extended performance costs, escalation, or liquidated damages, " and classified as " OPEN: Extended Performance Costs." R.02545, R.02547. 203. Following the issuance of Order 16, MassDOT commenced an action to vacate it on ground that DRB2 exceeded its authority " when it ... purported to issue binding rulings on disputes that were not listed on Exhibit 1 to the Binding Disputes Resolution Agreement." SUCV2005-5473, MassDOT Complaint, ¶ ¶ 25 and 41. MassDOT subsequently moved to dismiss its complaint voluntarily, on the ground that it had paid the award and the matter was now moot. Rather than dismiss, the Superior Court confirmed the award; MassDOT appealed; the Appeals Court affirmed; and the SJC denied further appellate review. Massachusetts Hwy. Dept. v. Perini Corp. , 79 Mass.App.Ct. 430, 947 N.E.2d 62 (2011), F.A.R. denied, 460 Mass. 1114, 954 N.E.2d 539 (2011). (The preclusive effect of Order 16 is discussed below in the Conclusions of Law.) 204. The Project Director would later rule, in his November 28, 2008 Mainline Impact Claim decision, that
CP 575 was previously argued and litigated by the Parties before DRB2. The CP was a part of the Atlantic Avenue Award issued by DRB2, which award has been paId. As a result, this CP cannot, therefore, be subject to further adjudication by DRB3.R.06143. This position was re-asserted in the PD's December 17, 2008 " Determination Regarding Which Claims In The Time Portion Of The Omnibus Claim Are Subject To The Parties' Binding Agreement":
PKC's claim concerning the Atlantic Avenue Bypass, CP 575, was previously argued and fully adjudicated by DRB2 in its Order 16. Yet, the DRB recommends that certain non-Exhibit 1 CPs are subject to binding adjudication because they " relate to" the Atlantic Avenue Bypass, and thus to CP 575. This recommendation cannot be squared with the prior DRB2 award, which adjudicated CP 575 and all disputes concerning the Atlantic Avenue Bypass with finality.R.06251. 205. This understanding evidently stemmed from the statement in Order 16 that " [t]his Award also closes out the CA/T Atlantic Avenue Bypass Claim and Pin-Pile Deletion Claim, for which further claims are barred." R.07537. It was, however, a misunderstanding, for it is clear from the whole of the decision that the just-quoted declaration was a reference only to CA/T's claim for a credit relating to the Bypass. R.07533-R.07534 (DRB has " combined" the " related" " Atlantic Avenue Bypass" and " Deletion of Pin-Pile" claims, " and has awarded a credit which accounts for both"). R.07535. In case this was unclear, DRB2 provided the following " Clarification[]":
(1) Reimbursable Costs of the Atlantic Avenue Bypass Traffic Implementation: To clarify the amount of the credit Award, the Board points out that the costs associated with the implementation of the Atlantic Avenue Bypass (additional traffic devices, signs, paving, etc. to establish and maintain the new traffic plan) are assumed to be paid by CA/T in addition to the Award.
The Atlantic Avenue Bypass Contract Modification Number 1A included an allowance of $1.5 million for these additional costs, with the understanding that the actual costs incurred plus approved markups would be reimbursed to PKC. Testimony was given that the Parties had agreed to a figure of $264,000 which is now due, in addition to the $1.5 million actually paid to-date.
In addition, the Contractor has claimed further costs of approximately $590,000, which are disputed by CA/T.
CA/T is therefore directed to pay the agreed amount of $264,000 and the Parties are urged to negotiate a settlement of the additional disputed traffic implementation costs.R.07534-R.07535 (emphasis in original). 206. Although Order 16 included an " Appendix A, " listing by number the CPs for costs relating to Mainline and MBTA impacts, CP 575 - PKC's claim for costs and time allowances relating to the Atlantic Avenue Bypass - was nowhere mentioned in the body of the Order or in Appendix A; nor were any of the 23 Atlantic Avenue Bypass CPs now under consideration. 207. As detailed below (¶ 227), DRB4 would later consider and reject the Project Director's contention that Order 16 disposed of all Atlantic Avenue Bypass claims. 3. The Third DRB. 208. The Third DRB (" DRB3") - consisting of entirely new members - served from 2005 through 2008 and issued awards and recommendations on three PKC impact and delay claims (PKC's Mainline Impact Claim and its Time II and Time III Claims). R.05112-R.05215; R.05216-R.05273; R.05312-R.05336. 209. DRB3 also addressed the arbitrability of the claims at issue in PKC's Motion and determined that all are subject to arbitration. Notably, DRB3 ruled non-arbitrable most of the claims which PKC had argued to it were subject to the 1999 Agreement. R.05195-R.05197. 210. In an August 10, 2006 decision, DRB3 concluded that it would allow presentation of evidence on the arbitrability of specific claims and " determine whether each CP is or is not subject to the Binding Agreement." R.05078. In an accompanying concurring opinion, Chairman Robertory stated that " [i]t is only through the hearing process that this DRB can determine what was the Parties' intent" in determining " which CPs come within" the scope of the Binding DRB Agreement. R.05069. 211. Chairman Robertory also indicated that DRB3 would determine, " through the hearing process, " whether PKC's claims for impact costs were subject to arbitration:
[T]his DRB cannot accept, without a hearing, [MassDOT's] contention that nothing before this DRB is subject to the Binding [DRB] Agreement, except for the conceded CPs 30, 317A, 330, 351U, 481, 527, 681, 755, and 755A and the dispute regarding the 18-day time extension that PKC requests in its pending Time Claim for CP 974. Certain of the CPs listed in Exhibit 1 included claims for impact, the amount of which could not be resolved when direct costs were being negotiated and resolved. Paragraph 5 of the Binding [DRB] Agreement, specifically includes within the scope of the Binding [DRB] Agreement disputes over delay, inefficiency, and overall impact costs related to those CPs. At the time this Binding [DRB] Agreement was executed, both Parties must have been aware that there had already been occasions on which the parties had reached partial agreement on CPs, with PKC reserving its right to pursue the impact of those CPs. Those reserved impact claims, very much a part of the CPs with which they are associated, appear to remain subject to the Binding [DRB] Agreement, regardless of whether, when eventually submitted, they bore the same or a different CP number. Whether or not specific CPs before this DRB were part of such reservations, is another matter to be determined through the hearing process.R.05070. MassDOT did not appeal DRB3's August 10, 2006 decision, and its Project Director did not issue a decision in response to it. 212. DRB3 held approximately 200 days of hearings over nearly two years on both the merits of PKC's claims and their arbitrability, DRB3 then issued a series of decisions in the fall of 2008 (including awards and recommendations on the merits of the Mainline Impact and Time Claims). R.05112-R.05215; R.05216-R.05273; R.05274-R.05305; R.05312-R.05336. 213. In its October 27, 2008 Mainline Impact Claim decision and its November 14, 2008 Time Impact Claim decision, DRB3 ruled that PKC was entitled to approximately $56 Million in the aggregate ($44 Million as an arbitral award, and $12 Million as a Section 7.16 recommendation). R.05213; R.05261. DRB3 also awarded PKC time extensions in connection with the Atlantic Avenue Bypass and for several of the 23 Atlantic Avenue Bypass CPs. R.05259. 214. Also on November 14, 2008, DRB3 issued a separate decision, titled " Determination Regarding Which Claims in the Time Portion of the Omnibus Claim Are Subject to the Parties' Binding Agreement" (the " Binding/NonBinding Decision"), specifically addressing the arbitrability of PKC's claims. R.05274-R.05305. In it, DRB3 addressed the applicable law governing arbitrability determinations, examined the language of the 1999 Agreement as well as the parties' conduct and the record evidence, and announced the criteria it would use to determine whether specific PKC claims fell within the scope of the 1999 Agreement. R.05277-R.05283. 215. DRB3 concluded that a CP listed on Exhibit 1 is subject to arbitration, and that a CP which is not listed on Exhibit 1 is not subject to arbitration " unless some specific condition exists which incorporates it into the scope of the Binding [DRB] Agreement." R.05285-R.05286. 216. In its determination of whether such conditions existed as to particular claims, DRB3 " consider[ed] two competing principles that have been laid down by the courts regarding the interpretation of an agreement to arbitrate when the issue is whether or not a particular dispute is subject to that agreement." These are:
a. " [T]hat an arbitration agreement is to be liberally construed. 'Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration ....' Moses H. Cone Memorial Hospital v. Mercury Construction Co., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)"; and
b. That " liberality does not extend to adding other items to a list of specific items which the parties have agreed are to be arbitrated. 'Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'" R.05277 (citations omitted).217. In this same decision, DRB3 addressed the Atlantic Avenue Bypass claims in particular. It examined MassDOT's Atlantic Avenue Bypass Initiative in detail, including Mod 297 and its subparts and the record evidence concerning the Atlantic Avenue Bypass. It found:
63. PKC alleges that the Binding category includes, for purposes of the Time portion of the Omnibus Claim before this DRB3, CPs 575, 921, 947, 950, 950A, 950B, 951, 974, 974A, 974B, 974C, 986, 992, 1016, 1026, 1027, 1028, 1049, 1075, 1124, 1126, 1130 and involves Modifications 297IA - 297IN. These relate to the Atlantic Avenue Bypass concept. (Ryan Slides, 55, 56, 68, 5-128). CA/T in its presentations has not refuted the PKC position that each of these CPs did in fact relate to the Atlantic Avenue Bypass.
64. The Contract initially required that, with limited short-term exceptions, two lanes along the entire length of Atlantic Avenue remain open to traffic at all times. In the Spring of 1997, as the schedule continued to fall behind, PKC suggested completely diverting traffic off Atlantic Avenue onto South Street in order to enable easier address of utility and slurry wall problems. CA/T refused to consider this a Value Engineering Change Proposal (VECP), under which it would have shared savings with PKC. By the Summer of that year, CA/T decided that such a diversion of traffic off Atlantic Avenue could result in PKC realizing substantial monetary savings, from which CA/T could benefit. Eventually, PKC dropped the idea when it became clear that CA/T wanted a substantial credit (price reduction). PKC refused to execute a bilateral agreement to effectuate the concept it had originated.
65. CA/T then determined to unilaterally direct its own version of the Atlantic Avenue Bypass, far broader than had been proposed by PKC. CA/T issued a series of unilateral Modifications, 297IA through 297IN[], each referred to by CA/T as " Parts" of a Modification (cf., the following paragraph). In these, CA/T directed PKC to take measures to switch traffic, not to South Street, but to the Surface Artery, further west and outside geographic (and possibly Project) Contract limits. The Modifications also directed PKC to make improvements to the Surface Artery. This was clearly well beyond the scope of the initial PKC Atlantic Avenue traffic diversion proposal and probably of the Contract itself.
66. In the modification numbering system used in administering this Contract, the word " Modification" includes all of the so-called " Parts" to a Modification. Thus Modification 297 is one Modification composed of several Parts, i.e., Parts 297IA through 297IN. See also the indented quotation in 72, below. The numbering system for Modifications must be described. When it was contemplated that a Modification was interim only, such as a unilateral direction or for some reason the Parties wished it to remain open for final agreement, the Modification would be issued in Parts. For the initial Part and subsequent Parts not jointly intended to be a final resolution, the Modification number was followed by the Roman numeral " I", which was in turn followed by a capital letter issued serially as various " interim" Parts were issued. When the Parties reached complete agreement and wished to close out the Modification, the Document carrying out that intent would bear a Roman " II" after the Modification, with no subsequent letter.
67. This DRB3 has examined in detail each Part of this 297 series of Modification Parts because of PKC's allegation that all CPs related to the Atlantic Avenue Bypass are subject to the Binding Agreement even if not on Exhibit 1 to that Agreement. The following paragraphs summarize our findings.
68. On February 25, 1998, CA/T issued unilateral Modification 297IA directing PKC to close Atlantic Avenue to restage the work in accordance with Atlantic Avenue Bypass Plans attached to the Part. The Modification stated that this action would " result in a credit to the Contract Price and the Contract Time, to be determined and included in a later Part of this Modification ... All lanes of Atlantic Avenue within the C11A1 limits of Work shall be fully reopened to traffic no later than the date of Milestone 2, 'Substantial Completion." '
69. Modification 297IA went on to state that the attached Bypass Plans replaced existing inconsistent Traffic Management Plans (TMPs) and Construction Sequence Plans (CSPs) [FN 12: These plans formed a substantial proportion - one-third - of the original solicitation contract provisions upon which PKC had based its initial bId.] to the extent they might be inconsistent. No effort was made by the Modification to define which Traffic Management Plans and Construction Sequence Plans were inconsistent with the new direction. The Modification then addressed adjustments to price and time:
" In consideration of this Modification, the Department shall receive an equitable adjustment in Price and Contract Time in amounts to be determined in subsequent Parts to this Modification ... " B. With respect to all other work required hereunder, and to Work affected by this Modification, the Contractor shall keep detailed and thorough cost records sufficient to permit determination of the costs incurred to perform the Work of this Contract and shall make them available to ... [CA/T] to assist the Department in identifying any differential in cost between the original staging plans and the revised staging, as well as any and all resulting impacts on the cost of performance of the Contract Work. The Contractor's actual costs may be affected by its own efficiency and other non-compensable factors. Thus, the Contractor's actual cost may be considered by the Department, but shall not be determinative of the credit due. The credit due as a result of this Modification shall be a forward price lump adjustment based upon the estimated differential in cost between the reasonable and efficient cost of performance of the Work as changed versus what it would have cost the Contractor to perform the Work prior to the changes made by this Modification ..." (Italics added). 70. ... What is significant is that [MassDOT] directed PKC to keep cost records of all costs incurred in implementing this Atlantic Avenue Bypass directive, without any limitation as to the duration for which such records were to be kept, and that such records would be utilized in the final determination of the credit due [MassDOT] or additional monies due PKC. This DRB3 concludes that this direction to maintain records was in force through the remainder of the Contract work until final completion (Milestone #1).
71. By letter of March 3, 1998, PKC filed its Notice of Claim in response to the Modification 297IA directive. PKC acknowledged that the Modification did include extra work, but claimed that the Modification allowed insufficient cost and time and did not comply with the terms of the Contract. " Given the extensive revision to the remainder of the contract, a more thorough review of the changed aspects of the work shall be better known after a complete review of Project schedule and cost." PKC assigned the CP number 575 to this claim and commenced tracking costs under this CP number. CP 575 is listed in Exhibit 1 to the Binding Agreement.
72. A series of further unilateral Parts revising 297IA followed. Between September 28, 2000 and August 6, 2002, CA/T issued twelve more Parts to this Modification 297, Parts IB through IN. Each of these Parts referred to earlier Parts, incorporating or altering them. Each Part added or altered Drawings or Plans.
73. Except for 297IA and 297IB, each Part included in its " Summary Description" the words " CP 575 Atlantic Avenue By-Pass"; 297IB and IC merely said " Atlantic Avenue By-Pass." Part IC added a line item to the contract, " CP 575 Atlantic Avenue By-Pass." Parts ID through IM each included the following provision:
" Any costs associated with this initiative (Modification A297) are to be included in a separate part to this Modification in accordance with Modification A297 Part IA, particularly the section therein entitled 'ADJUSTMENT IN PRICE AND TIME'." 74. The covering letters transmitting these Modification Parts to PKC also referenced CP 575. The fact that CA/T continued to issue Part I's without there being a Part II indicated that it was CA/T's intent that Modification 297 would remain open until all costs associated with the Atlantic Avenue Bypass work had accumulated.
75. On August 16, 2000, the [MassDOT] Project Director, John Stavola, forwarded to PKC seven drawings relating to a revision of the Summer Street realignment and appurtenant signal changes. The letter directed PKC in these words: " Work for this effort should be tracked in accordance with Contract Modification A0297, the Atlantic Ave. Initiative." This is a clear statement that, over a year after the Binding Agreement was executed, [MassDOT] was expecting changes to the Atlantic Avenue configuration to be tracked per the initial directive.
76. The original Modification 297, Part IA, as issued by [MassDOT], obligated PKC to track all costs incurred in implementation of the Atlantic Avenue Bypass concept. The subsequent Parts were intended to relate back to make revisions to the manner in which the Atlantic Avenue Bypass would be carried out. The subsequent Parts did not alter PKC's obligation to track the costs incurred in carrying out the Bypass concept and there is nothing to preclude PKC's use of different CP numbers to record incurred costs in a manner that related to specific Parts.
77. Although the Summary Description in the [MassDOT] directives was stated to be for reference only, it is an indication of [MassDOT's] thinking, namely, that these directives were a part of CP 575. The fact that PKC elected to account for the costs under a different CP number does not alter the fact that these costs are an integral part of an event that occurred prior to January 1, 1999, namely, the issuance of Modification 297IA and the accompanying directive to maintain records of all costs incurred in connection with the Atlantic Avenue Bypass, to be considered in the eventual and never forthcoming Modification 297II.
78. The CPs which are herein stated to refer back to CP 575 would be an example of CPs that are not listed on Exhibit 1 but are " related to" or " concerning" a CP (CP 575) which is listed in the Binding Agreement.R.05288-R.05291. 218. On this record evidence, DRB3 concluded:
79. These facts lead this DRB3 to apply the principle of Moses H. Cone Memorial Hospital and conclude that CPs relating to costs incurred in implementing the Atlantic Avenue Bypass directive are related to an event that occurred prior to January 1, 1999, namely the CA/T direction to implement its version of the Atlantic Avenue Bypass and to maintain records of all costs incurred indefinitely thereafter in implementing that directive. Therefore, this decisions on these CPs are subject to the Binding Agreement: when rendering decisions regarding Modifications 297IA through 297IN, inclusive, and the CPs that they spawned, this DRB3 is functioning as an arbitral panel and rendering binding decisions.R.05291. 219. As described above (¶ ¶ 72-190), DRB3 analyzed each CP underlying PKC's claims and determined its arbitrability, merit, and direct damages. Where claims fell on both sides of the arbitrability divide, DRB3 segregated damages - and also impact costs and constructive acceleration costs where these were awarded - between binding issues and non-binding issues. R.05195-R.05213. 220. Having heard the parties and examined the record evidence, DRB3 awarded PKC a total of $23,647,745 in impact costs. It determined that $19,636,420 of these impact damages is " attributable to CPs that are subject to the Binding Agreement" and $4,011,325 is " attributable to CPs that are not subject to the Binding Agreement." R.05198. 221. DRB3 also awarded PKC $23,000,000 in constructive acceleration damages, and determined that $18,000,000 of these constructive acceleration damages belong to claims which are subject to arbitration. R.05213. 222. As described above (¶ ¶ 166-180), DRB3 also examined the arbitrability of three of the five non-Atlantic Avenue Bypass CPs and concluded that they were arbitrable.
a. DRB3 determined that CP 900 is part of CP 466, which is listed on Exhibit 1. R.05172-R.05173. b. DRB3 determined that CP 906 is a part of and " inextricably intertwined" with CP 716, which is listed on Exhibit 1. R.05173-R.05174. c. DRB3 determined that CP 975 is part of CP 108, which is listed on Exhibit 1. R.05459.
Although the factual point seems to have support in the record as to one decision at least, what has been tendered is not sufficiently complete to support the generality. In any event, the standard for review under section 7.16 and G.L. c. 30, 39J " is, " in the words of Coach Belichek, " what it is." The issue at hand is to be decided on the merits of the Project Directors' arbitrability decisions, not the process by which they were generated. [16]" On October 12, 2000, the project elected not to renew the terms of the members of [DRB2]." Massachusetts Hwy. Dept. v. Perini Corp. , 444 Mass. at 370. The new members of what would now be DRB3 were Robert J. Robertory (Chair), Gerard J. Carty, and Jack J. Feller. At ¶ ¶ 47-50 of its Proposed Findings PKC asserts, based on documents MassDOT produced in discovery and a privilege log enumerating the documents withheld, that the Project Directors had little or no input into " their" decisions; rather, outside counsel drafted these and sent them to MassDOT, sometimes the day before they were signed by the Project Director and released. For this reason (and also because " there is no evidence that the Project Director has any specialized knowledge or expertise concerning questions of arbitrability"), PKC argues, the PD's decisions are entitled to little or no deference.
[18]Gerard J. Carty was replaced by John H. Duke. Jack J. Feller continued as a Member and Robert J. Robertory stayed on as Chair. [19]Members Feller and Duke remained, and Chairman Robertory was replaced by Roy S. Mitchell, Esq. PKC had provided DRB3 an allocation of claimed impact costs (including constructive acceleration costs) for CPs which it asserted were subject to arbitration as well as for CPs which it did not assert were subject to arbitration. R.02796-R.02869.
4. The Fourth DRB. 223. The fourth panel of the DRB (the " Fourth DRB" or " DRB4") - consisting of two members from DRB3 and one new member - served from 2009 through 2011 and issued awards on six PKC claims, including PKC's MBTA Impact Claim, Site Restoration Claim, and Traffic Impact Claim. R.05356-R.05595; R.05596-R.05741; R.05806-R.05878. 224. In its MBTA, Site Restoration, and Traffic Decisions, DRB4 followed the arbitrability analysis articulated by DRB3. R.05380-R.05386; R.05601-R.05604; R.05811-R.05814. In its MBTA Decision, DRB4 also considered whether the Atlantic Avenue Bypass CPs not separately listed on Exhibit 1 were part of CP 575 and the Atlantic Avenue Bypass Initiative. R.05380-R.05386.
225. DRB4 agreed with DRB3's findings on arbitrability and also found as follows:
109. In addition to the documents quoted or directly referenced by DRB3 in its consideration of CP 575 " Atlantic Avenue Bypass" in its Binding/Non-Binding Decision, DRB4's own review of the materials submitted by the Parties also discloses several additional directives by [MassDOT]: a. A January 24, 2001 letter from [MassDOT] to PKC (Third Disputes Review Board, PKC Time Claim After April 1999 Hearing, CA/T Presentation Reference Documents [Volume 1 of 2], May 21-25, 2007, Ex. 17) forwarded " a full size copy of the stamped Traffic Management Plans to implement the second phase of deck removal and backfill operations north of Beach Street .... A modification formally incorporating these drawings into the Contract as part of the Atlantic Avenue Bypass will follow shortly." (Italics added). b. A similar letter dated April 18, 2001 (Op. cit., Ex. 18) recited, " Enclosed for PKC's use are full sized copies of the mutually developed stamped Traffic Management Plans for the upcoming two phases of work that open up Atlantic Avenue southbound and establish work zones for restoration in East Street and along Atlantic Avenue. A Contract Modification formally incorporating these drawings into the Contract as part of the Atlantic Avenue Bypass is currently in process." (Italics added). c. A [MassDOT] letter of May 25, 2001 (Op. cit., Ex. 19) forwarded 11 drawings, the " Traffic Management Plans - 5A series" and recited, " A formal Contract Modification A297 Part IL, CP 575 - Atlantic Avenue Bypass will follow shortly." d. A [MassDOT] letter of July 6, 2001 (Op. cit., Ex. 20) forwarded 16 drawings, the " Traffic Management Plans - 5C series" and recited, " A formal Contract Modification A297 Part IM, CP 575 - Atlantic Avenue Bypass will follow shortly." 110. These four letters, postdating Modifications 558II and 587ID and postdating the Binding Agreement, make abundantly clear that [MassDOT] considered work related to the Atlantic Avenue Bypass to be work for which it had directed PKC to maintain records of costs through the end of the Project - in short, that it considered the Atlantic Avenue Bypass work and CP 575 to be a continuing and ongoing effort. Although PKC assigned other CP numbers to subsequent issues arising out of the Atlantic Avenue Bypass, they are closely related to CP 575 within the meaning of paragraph 3 of the Binding Agreement-they are " related to events which occurred prior to January 1, 1999, " namely, the direction to effectuate the Atlantic Avenue Bypass. This is just as DRB3 determined.R.05384-R.05385. DRB4 then summarized findings concerning the arbitrability of PKC's claims, including claims which DRB3 held were not subject to arbitration. R.05385.
226. DRB4 also, in its September 3, 2010 " Determination Regarding PKC's MBTA Impact Claim, " addressed MassDOT's argument that Mods 558II and 587ID " cut off' PKC's impact claims, and concluded (as DRB2 had years before in Order 16) that
the price paid in modifications 558II and 587ID cannot be construed to have covered all the costs of doing such work or the impacts that flowed from doing such work.... Accordingly, DRB4 determines that PKC is entitled to compensation for impact.
227. On October 27, 2011 DRB4 rendered a decision devoted to what it called " PKC's 'Order 16 CPs' Claim." This bore the number CP 757 and is not directly at issue in these consolidated cases, but in its decision, DRB4 considered and rejected the Project Director's contention that Order 16 disposed of all Atlantic Avenue Bypass claims:
CA/T takes the position that the claim for Atlantic Avenue Bypass implementation costs is closed, because DRB2 " issued a binding award without awarding the additional amount claimed and the award has been confirmed by the Superior Court." The CA/T ignores the plain language of Order #16 providing that DRB2 excluded the remaining implementation costs from the scope of the award. Since those costs were excluded and reserved, not denied, the fact that the award has been confirmed is irrelevant. As this DRB4 has observed, " The fact that DRB2 urged the Parties to negotiate a settlement of the traffic implementation costs means that DRB2 made no decision concerning liability of CA/T for any of the costs encompassed within that description." PKC's claim for those costs has not been decided by any DRB, and it is properly before DRB4 for hearing and decision. R.05904. For the reasons detailed above in the section on DRB2 (¶ ¶ 204-05), this - not the Project Director's and MassDOT's - was plainly the correct reading of Order 16, which expressly reserved decision on " traffic change implementation costs" relating to the Atlantic Avenue Bypass. R.07535.228. In addition, as described above (¶ ¶ 154-65), DRB4 examined the arbitrability of the remaining two of the five non-Atlantic Avenue Bypass Initiative CPs and concluded that they are arbitrable. R.06097-R.06109.
a. It determined that CP 611A is part of CP 611, which is listed on Exhibit 1, R.05825-R.05826, and b. It determined that CP 622A is part of CP 622, which is listed on Exhibit 1. R.05430-R.05431.
5. The Fifth DRB. 229. The fifth panel (the " Fifth DRB" or " DRB5") - consisting of two members from DRB4 and a new Chair - convened in 2012, issued decisions on two claims (Interest and Overhead/Overlap). Neither is at issue in this Motion. R.05942-R.05953; R.06097-R.06109.
K. The Project Director's Arbitrability Determinations. 230. The Project Director weighed in on the arbitrability issue in a Chief Engineer's Decision dated December 7, 2008. R.06235-56. In his view:
Notwithstanding DRB3's characterization of its November 17, 2008 Recommendation as a " binding award, " the Binding DRB Agreement does not authorize the DRB to arbitrate any claim that is not listed on Exhibit 1 to the Binding DRB Agreement, including questions of arbitrability. Therefore, DRB3's determination on such matters is not " deemed to be a binding award under the Arbitration Act." ... DRB3's November 17, 2008 determination is a recommendation which is before me for final decision pursuant to Subsection 7.16 of the Contract.R.06237. As suggested (in part) in the preceding findings of fact and discussed more fully below in the Conclusions of Law, this appealingly simple litmus test resulted from factual conclusions that were unsupported by substantial evidence, and from errors of law. 231. The remainder of the December 7, 2008 decision explained at length the thinking behind this conclusion. For starters:
The parties executed the Binding DRB Agreement as part of a process to resolve a backlog of CPs that had developed on the Contract as of January 1, 1999. This intent is evidenced in the explicit language of the Binding DRB Agreement. The parties did not intend the Binding DRB Agreement to apply to claims like those now pending before DRB3, including but not limited to the Mainline Impact Claim and Time Claim, which were not part of the existing backlog of claims known to the parties as of January 1, 1999 and which are not listed on Exhibit 1. In fact, none of the claims before DRB3 even existed at the time the parties agreed upon Exhibit 1.R.06241-R.06242. 232. The PD next advanced the aforementioned theory involving Mods 558II and 587ID:
Further, the DRB's findings and recommendation are contrary to the parties' agreement, memorialized in Contract Modifications 558II and 587ID (" Mods 558II and 587ID, " respectively), with respect to the temporal limitations of the impact claims that the parties intended to submit to binding resolution. Throughout 1998 and early 1999, the parties also negotiated the terms of an agreement to implement the 76Bs Schedule as the new schedule-of-record for CIIA1, which was incorporated in Mods 558II and 587ID both executed on August 6, 1999.
Mods 558II and 587ID compensated PKC approximately $13 million to implement the new 76Bs Schedule with a data date of May 1, 1999. Mod 587ID specifically provided that the 76Bs Schedule was to be used " to plan and execute the work and as a basis for assessing future impacts as they may occur" and confirmed that any unresolved impact claims were limited to costs incurred before November 1, 1998. Mods 558II and 587ID, therefore, define the temporal limits of PKC's impact claims listed on Exhibit 1 to the Binding DRB Agreement.R.06241-R.06242 (footnote omitted). 233. Next, the PD observed, accurately, that the 1999 Agreement " was the result of a long period of negotiation between the parties to resolve an existing backlog of claims that existed as of January 1, 1999" and that while Exhibit 1 would not be fully negotiated for many months, the parties had " agreed that the CPs subject to the Binding DRB Agreement were limited to those that were known as of January 1, 1999, as specifically defined in Paragraphs 3, 4, and 7 of the Binding DRB Agreement." He quoted from PKC's March 22, 2000 letter regarding the list prepared by BPB that would become Exhibit 1 to the 1999 Agreement, particularly the statement, " For clarification, this agreement is limited to the CP numbers which are on BPB's list and not CP descriptions and the remaining BPB data with which PKC is not in agreement." R.06243 (emphasis added in Project Director's decision). 234. The PD also looked to what he saw as " [t]he plain language of the Binding DRB Agreement [which] establishes the parties' original intent to limit its scope to claims specifically listed on Exhibit 1." By this, he meant the several statements in the 1999 Agreement that the DRB was to arbitrate claims " 'related to events which occurred prior to January 1, 1999.'" (R.06244, quoting 1999 Agreement, ¶ ¶ 3, 4) 235. In hindsight, the parties' dispute over arbitrability might be summed up simply as a disagreement over the meaning of this one phrase. In the PD's view,
The language of the Binding DRB Agreement clearly demonstrates that the CA/T and PKC created a list of claims that related to events which were known about on January 1, 1999 (i.e., Exhibit 1) and intended to adjudicate only those CPs included on the list should negotiations to resolve those CPs not succeed. It follows then that all claims not listed on Exhibit 1 - namely, those claims arising after January 1, 1999 - would continue to be subject to the claim resolution procedures provided in Subsection 7.16 of the Contract.R.06245. 236. The DRB's extension of its authority to arbitrate to include claims not expressly listed on Exhibit 1, he continued,
is contrary to the parties' intent and the plain language of the Binding DRB Agreement. DRB3's Recommendation disregards the express intent of the parties in creating the Exhibit 1 list and the clear language contained in the Binding DRB Agreement that limits its scope to those claims specifically listed thereon.R.06245. 237. The PD therefore maintained that DRB3's 11/14/08 Arbitrability Determination was contrary to the terms of the 1999 Agreement, " would compel the parties to arbitrate claims that they did not agree to arbitrate, " and " leads to illogical results." This last, he felt, was best illustrated by DRB3's view
that certain non-Exhibit 1 CPs are subject to binding adjudication because they 'relate to' the Atlantic Avenue Bypass, and thus to CP 575. This recommendation cannot be squared with the prior DRB2 award, which adjudicated CP 575 and all disputes concerning the Atlantic Avenue Bypass with finality.R.06250-R.06251 (emphasis supplied). The PD called DRB3's reliance on the Cone Hospital case " misplaced. The DRB cannot compel arbitration of issues where there is no agreement to arbitrate." R.06251. How this conclusion is to be reconciled with the 1999 Agreement's explicit statement of the parties' intent to arbitrate claims " related to events which occurred prior to January 1, 1999" (emphasis supplied), he did not say. 238. Finally, the PD ruled - as this Court and the Appeals Court would later agree - that he, not the DRB, had the authority to determine what claims were, and were not, arbitrable under the 1999 Agreement, there being no " clear and unmistakable evidence" of a contrary agreement by the parties. R.06251-R.06256. 239. Thus, the Project Director arrived at a straightforward test for whether or not a claim was arbitrable: a claim which bore a CP number listed on Exhibit 1 was arbitrable, provided it existed as of January 1, 1999. No unlisted or later claim was arbitrable, even if it was " related to" a listed, arbitrable claim and to events occurring before January 1, 1999 (for example, a CP concerning post-1/1/99 impacts of a pre-1/1/99 contract change whose CP was listed in Exhibit 1). 240. The DRBs and the Project Directors each have held fast to their positions, as have their supporters (MassDOT having benefitted almost without exception from the Project Directors' rulings and the resulting awards; PKC having enjoyed very mixed success before the DRBs, but overall preferring the DRBs' rulings to the Project Directors'). The result is these ten consolidated cases.
CONCLUSIONS OF LAW
A. Standard of Review.
As noted above (*¶ ¶ 17-20), the standard for reviewing the Project Director's arbitrability decisions is specified by contract and defined by statute. Subsection 7.16(G)(10) of the C11A1 Contract prescribes the procedure for appealing a Project Director's decision " to the MHD Board of Commissioners acting as a Board of Contract Appeal" or to the Superior Court for the County of Suffolk, and states: If an appeal is timely made, for purposes of subsequent administrative or judicial review, MGL Chapter 30, Section 39J shall apply.
R.06157, R.06160. Section 39J provides:
Notwithstanding any contrary provision of any contract for the construction, reconstruction, alteration, remodeling, repair or demolition of any public building or public works by the commonwealth, or by any county, city, town, district, board, commission or other public body, when the amount of the contract is more than five thousand dollars in the case of the commonwealth and more than two thousand dollars in the case of any county, city, town, district, board, commission or other public body, a decision, by the contracting body or by any administrative board, official or agency, or by any architect or engineer, on a dispute, whether of fact or of law, arising under said contract shall not be final or conclusive if such decision is made in bad faith, fraudulently, capriciously, or arbitrarily[, ] is unsupported by substantial evidence, or is based upon error of law. (Emphasis supplied.)
Under section 39J, " review of... an engineer's decision - here, that of the Project Director - that is otherwise said by the contract to be final and binding has become similar in many respects to the review of an administrative decision under G.L. c. 30A, Sec. 14, " whose language section 39J closely resembles. Massachusetts Hwy. Dept. v. Perini Corp. , 2001 WL 1249793 (Mass. Super. 2001) at *6, C.A. No. 00-4096 (van Gestel, J.) (Aug. 13, 2001), citing Fontaine Brothers, Inc. v. Springfield, 35 Mass.App.Ct. 155, 158, 617 N.E.2d 1002 (1993).
As the Appeals Court recognized in its 2013 decision regarding these parties, the 1999 Agreement, although it never uses the term, was in fact an arbitration agreement. Because the C11A1 project affected - indeed, once impeded but now carries - interstate commerce, its construction and application are governed by both federal and state arbitration law. McInnes v. LPL Fin., LLC, 466 Mass. at 260 (" Arbitration agreements in Massachusetts are governed by the [Massachusetts Arbitration Act] and where the contract involves a transaction affecting interstate commerce, by the [Federal Arbitration Act]"); see Massachusetts Hwy. Dept. v. Perini Corp., 83 Mass.App.Ct. 96, 981 N.E.2d 721 (2013); Massachusetts Hwy. Dept. v. Perini Corp. , 2002 WL 968867 (Mass. Super. 2002) at *3-*4, C.A. No. 00-4096 (van Gestel, J.) (March 20, 2002) (each applying both federal and Massachusetts arbitration law).
Although arbitration is a creature of contract, and arbitrability is therefore circumscribed by the terms of the parties' agreement, both the Massachusetts and Federal Arbitration Acts embody a " strong" and " liberal policy favoring arbitration." AT& T Mobility LLC v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740, 1749, 179 L.Ed.2d 742 (2011); Miller v. Cotter, 448 Mass. 671, 676, 863 N.E.2d 537 (2007).
The SJC has
enumerated the " guiding principles" applicable to cases involving contested arbitration proceedings, as set out in the decisions of the United States Supreme Court interpreting Federal labor law. The first principle is that " arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." " The second principle is that the question whether an agreement creates a duty to arbitrate is 'undeniably an issue for judicial determination ... [u]nless the parties clearly and unmistakably provide otherwise.'" " The third principle is that, 'in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims ... [including] determining whether there is particular language in the written instrument which will support the claim.'" The final principle is that, " where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that '[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'" These principles seek a balance between the statutory policy favoring arbitration as an expeditious and efficient means for resolving disputes and the courts' role as the guardian of the parties' right to submit to arbitration only those disputes that the parties intended.Massachusetts Hwy. Dept. v. Perini Corp. , 444 Mass. 366, 374, 828 N.E.2d 34 (2005) (citations omitted; bold type added), quoting extensively from Local No. 1710, Int'l Ass'n of Fire Fighters v. Chicopee, 430 Mass. 417, 420-21, 721 N.E.2d 378 (1999) and AT& T Techs., Inc. v. Communications Workers, 475 U.S. 643, 648-50, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986).
As detailed above in the Findings of Fact (¶ ¶ 214-16), DRB3 explicitly recognized and balanced these " competing principles" in its arbitrability decision, R.05277, and it and DRB4 applied them carefully to the particular CPs before them. DRB3 ruled any claim non-arbitrable " unless some specific condition exists which incorporates it into the scope of the Binding [DRB] Agreement." R.05285-R.05286. It arrived at a principled rule for determining when such a condition was present (that the claim must be '" related to'" or 'concerning' a CP ... which is listed in the Binding Agreement"). R.05291. In nearly 200 days of hearings in its detailed and well-reasoned written decisions, it heard and weighed a considerable amount of evidence concerning the parties' intent and the relationship between CPs that were not expressly listed on Exhibit 1 and those that were. Based on all of this, it concluded that a number of PKC's claims were arbitrable and that a good many others were not.
DRB3's approach, which DRB4 subsequently adopted and applied with equal fidelity and care, was entirely consonant with the language of the 1999 Agreement. The contract referred to " any and all claims ... which are related to events which occurred prior to January 1, 1999." (¶ 3) Exhibit 1 listed " any and all claims by the Parties related to events which occurred prior to January 1, 1999" (¶ 4), and memorialized the parties' intent to arbitrate " any and all disputes concerning the claims listed on Exhibit 1" where they could not reach agreement on the merits. (¶ 5) Arbitrable claims were to include " delay, inefficiency, and/or other overall impact costs" in addition to direct damages. (¶ 2) PKC was expressly allowed " to present to the DRB, as part of these proceedings, an omnibus claim for a compensable time extension and/or for additional compensation from the MHD for impact costs arising out of and/or related to the performance of the work identified in Exhibit 1." (Exhibit 2, Rule 3.0(B))
Absent in the language the parties chose for the 1999 Agreement is any requirement that a claim be fully ripe, or that all damages be incurred and calculable, by January 1, 1999. By their very nature, some claims listed on Exhibit 1 concerned events (i.e., changes ordered by MassDOT) that occurred before that date, but whose repercussions were extensive and complex, and would not be quantifiable until long afterward. Sometimes, this was because MassDOT's implementation of the change rolled out over an extended period and numerous related modifications; other times, it was because the change itself embodied a latent design defect or conflict that went unrecognized at the time. PKC generated CPs with new numbers (or old numbers with letters added) as a means of keeping the bookkeeping in order and MassDOT on notice, and MassDOT repeatedly recognized and acknowledged the relationship between the new CP numbers and the original, listed CPs to which each related.
The DRBs' determinations that the new CPs " related to" or " concerning" pre-1999 events that were already covered by CPs listed on Exhibit 1 were fully supported by the administrative record. These rulings respected the express terms of the contract, the evidence presented, and the legal principle that arbitration is not to be denied " 'unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'"
Unfortunately, the same cannot be said for the Project Directors' decisions on the subject. The rule that these decisions applied - look at Exhibit 1 and see if the CP number is there or not - certainly had the virtues of simplicity and certainty of application, but that is all.
B. The 23 Atlantic Avenue Bypass CPs.
As detailed more fully in the Finding of Fact (¶ ¶ 36-54), MassDOT kicked off the Atlantic Avenue Bypass Initiative with Modification 297IA, which anticipated a credit to MassDOT. PKC saw matters differently (and, as events would prove, more realistically), anticipating that it would incur both direct and impact costs. One fact on which both agreed was that the Atlantic Avenue Bypass and any resulting impacts would be of lengthy duration. In Mod 297IA, MassDOT specified that " [a]ll lanes of Atlantic Avenue within the C11A1 limits of work shall be fully reopened to traffic no later than the date of Milestone 2, 'Substantial Completion.'" R.00229. In its response - CP 575, included in Exhibit 1 where it was given the descriptor " Atlantic Ave. By-Pass" - PKC expressly " reserve[d] its rights to full compensation for all costs and time associated with this Modification." R.00233.
MassDOT directed PKC to " keep detailed and thorough cost records" of all its work and explicitly, that affected by the Atlantic Avenue Bypass. R.00230, R.00381. PKC did so by issuing a new CP each time there was a further Modification relating to the Bypass. As discussed at length in the Findings of Fact (¶ ¶ 72-152), the Mods, the CPs, and the parties' correspondence unmistakably shows that both sides associated Mods 297IA through 297IN with the Bypass and with CP 575, to which they were indeed related. Without the Bypass, the work would not have been necessary, nor the direct costs and other impacts incurred.
In settling upon the rule that to be arbitrable, a CP must be identified by number on Exhibit 1 to the 1999 Agreement, the Project Directors failed to recognize
o that the 1999 Agreement covered claims " related to events which occurred prior to January 1, 1999" - not just claims that had fully ripened by then; o that it expressly contemplated claims for " delay, inefficiency, and/or other overall impact costs"; o that the descriptions attached to the CP list on Exhibit 1 were supplied unilaterally by the project's construction manager, Bechtel/Parsons Brinkerhoff, and were disputed at the time by PKC; o that in CP 575 - the original Atlantic Avenue Bypass CP, listed in Exhibit 1 - PKC expressly " reserve[d] its rights to full compensation for all costs and time associated with this Modification"; o that both sides fully understood at the outset that the Atlantic Avenue Bypass would be executed, and any resulting savings or costs would be incurred, over a period of years; and o that PKC's practice of opening new CPs related to changes already represented in CPs listed on Exhibit 1 was a matter of accounting convenience which MassDOT itself had encouraged (and which in fact tracked MassDOT's own practice, particularly in the case of the Atlantic Avenue Bypass, of following an open-ended modification with additional, related mods as details were solidified and reduced to drawings).
The plain language of the 1999 Agreement thus provided ample support for three successive and DRB4's rulings that a claim is arbitrable if it is " 'related to' or 'concerning' a CP ... which is listed in the Binding Agreement." R.05291. Of course, as we know with the advantage of hindsight it was the Project Director, not the DRBs, who was charged with determining the arbitrability of particular claims. The Project Director's authority on this and other matters, however, is not unlimited: he must apply the correct principles of law, and where his rulings require factfinding, they must be supported by substantial evidence. G.L. c. 30, § 39J.
Fundamental among the applicable legal principles is the presumption in favor of arbitrability, " unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'" This principle was routinely disregarded in the Project Director's decisions that are the subject of these cases. Arbitrability is a matter of contract interpretation, and is thus a question of law. Commonwealth v. Phillip Morris Inc ., 448 Mass. 836, 843, 864 N.E.2d 505 & n.10 (2007). A failure to apply appropriate legal standards is an error of law and thus is not subject to deferential review . Mayor of Lawrence v. Kennedy , 57 Mass.App.Ct. 904, 906, 781 N.E.2d 5 (2003); see Cargill v. Harvard University , 60 Mass.App.Ct. 585, 588, 804 N.E.2d 377 (2004)
In at least three respects, moreover, the Project Director's errors of law were compounded by factual findings that were unsupported by substantial evidence. These variously infected his rulings on the Atlantic Avenue Bypass CPs, the other five CPs, and the impact claims.
1. The Project Director's Finding that Mods 558II and 587D Placed " Temporal Limitations" on PKC's Claims.
As suggested above in the Findings of Fact (¶ ¶ 201-02), the Project Director's position that Mods 55811 and 587D imposed " temporal limitations" on arbitrable claims was fundamentally flawed. The governing documents were at least as susceptible of the contrary interpretation; i.e., it could not be said with " positive assurance" that they were " not susceptible of an interpretation that covered the asserted dispute." Mass. Hwy. Dept. v. Perini Corp., 444 Mass. at 374 (citations and internal quotation marks omitted). The Project Director's failure to apply the Cone Hospital principle was an error of fact and law.
Additionally, the Project Director ignored DRB2's contrary decision in Order 16 (R.07530-R.07531) and the confirmation of that Order by this Court. Having been decided, confirmed, affirmed, and untouched on further appellate review, the issue of temporal limits under Mods 558II and 587ID is settled and not open to relitigation, even if the PD's position could survive the legal standard for arbitrability. See TLT Constr. Corp. v. A. Anthony Tappe & Assocs., 48 Mass.App.Ct. 1, 9, 716 N.E.2d 1044 (1999) (" '[a]n arbitration award, whether or not sustained by a court judgment constitutes finality for res judicata'"; citation omitted); Miles v. Aetna Cas. & Surety Co., 412 Mass. 424, 427, 589 N.E.2d 314 (1992).
As discussed in the next section, the claim-preclusive effect of a prior arbitration award is ordinarily a matter for the arbitrator to decide, while the claim-preclusive effect of a prior decision of a reviewing court is for the court to decide. This issue partakes of both. One may at least say with certainty that the Project Director had no authority to set aside an arbitration award which had been confirmed by this Court and affirmed in the Appeals Court.
2. The Project Director's Finding that DRB2's Order 16 Fully Adjudicated CP 575.
Also as discussed above (¶ ¶ 204-07, 227), the Project Director's assertion that Order 16 " adjudicated CP 575 and all disputes concerning the Atlantic Avenue Bypass with finality" was not even a remotely plausible reading of that document. Order 16 did not so much as mention CP 575. Moreover, it expressly reserved all Atlantic Avenue Bypass claims insofar as they concerned " traffic change implementation costs, " as the 23 Bypass claims at issue in these cases do.
Finally, defenses of the issue- or claim-preclusive effect of another arbitration order are matters of going to the merits of the claim; i.e., they concern whether the claim may be asserted in any forum, not just whether they may be arbitrated. As such, the reach of CP 575 was at most an issue of procedural arbitrability, and should have been left to the DRB. In fact, DRB4 decided it, adversely to MassDOT. R.5904. This decision, which had the twin virtues of conforming to the plain language of Order 16 and with the law, was within DRB4's authority, and the Project Director's rejection of it exceeded his.
See, e.g., Shell Oil Co. v. CO2 Comm., Inc. , 589 F.3d 1105, 1109-10 (10th Cir. 2009); Emilio v. Sprint Spectrum, L.P. , 315 F. Appx. 322, 324 (2d Cir. 2009); Triangle Constr. & Maint. Corp. v. Our V.I. Labor Union , 425 F.3d 938, 947 (11th Cir. 2005); Klay v. United Healthgroup , 376 F.3d 1092, 1109-10 (11th Cir. 2004); Shanks v. Steris Corp. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Local 832 , 489 F.Supp.2d 501, 511 (W.D. Pa. 2007); Matter of City School Dist. v. Tonawanda Educ. Ass'n, 63 N.Y.2d 846, 848, 482 N.Y.S.2d 258, 472 N.E.2d 34 (1984) (" The effect, if any, to be given to an earlier arbitration award in subsequent arbitration proceedings is a matter for determination in that forum"); Bermann, " The 'Gateway' Problem in International Commercial Arbitration, " 37 Yale J. Intl. Law 1, 45-46 (2012) (" courts almost invariably leave the claim preclusion question to the arbitrators"); Wong, " Court or Arbitrator - Who Decides Whether Res Judicata Bars Subsequent Arbitration under the Federal Arbitration Act, " 46 Santa Clara L. Rev. 49, 66, 92 (2005) (" arbitrators should determine whether prior decisions preclude subsequent arbitration by virtue of the doctrine of res judicata, except where the prior decision is a judgment issued by the court being asked to compel arbitration, in which case, that court should determine the issue").
3. The Project Director's and MassDOT's Reliance on Prior Statements by PKC.
In several instances, the Project Director and MassDOT have cited prior statements by PKC which, they claim, is evidence that PKC had once subscribed to the MassDOT's position that if a CP bore a number not listed on Exhibit 1, it was non-arbitrable no matter what. A more careful reading of the source documents reveals that in fact, PKC never took this position. Impeachment with a prior inconsistent statement is a favorite tool of advocacy, but it ill-serves the quest for the truth when, as here, the statement has been misleadingly wrested from its context, as in the following examples:
1. The Project Director cited PKC's statement, in its March 22, 2000 letter regarding the latest draft of Exhibit 1, that " this agreement is limited to the CP numbers which are on BPB's list, " as supporting his own arbitrability test. R.06243. The excerpted language cannot be understood, however, without considering as well the remainder of the sentence: " and not CP descriptions and the remaining BPB data with which PKC is not in agreement." In thus registering its objection to what it evidently viewed as inaccurate descriptions of its own CPs, PKC did not suggest, in 2000 or since, that its use of additional numbered CPs to track specific portions of work already covered by a listed CP should operate to remove such work from the arbitration agreement. In fact, the practice was common on this project, both before and after January 1, 1999. See Massachusetts Hwy. Dept. v. Perini Corp., 444 Mass. at 369 (" One of the claims listed in exhibit 1 involved so-called 'underpinning impacts.' ... Included within the scope of the underpinning impacts claim were thirty-three individual claims totaling $20,000,000 ...." (footnote omitted).
2. The Project Director also looked to SEC disclosures from 2001 - 2004 stating that Perini Corporation had no pending binding arbitration claims before DRB3. In the Project Director's view,
[23]MassDOT repeats the argument in its Request for Findings, ¶ ¶ 39-41. This is one of many instances in which MassDOT relies on a secondary source - in this instance, a summary chart in what is apparently a PowerPoint presentation by MassDOT to DRB4, MASS.01208 - which contains excerpts from primary sources not in the record, thus making it impossible for a factfinder to gauge their probative value. See pp. [24]MassDOT, in ¶ ¶ 33-38, includes additional quotes from PKC's correspondence with The filings were actually on behalf of Perini Corporation, not the PKC joint venture as the PD's decisions stated.
[a]lthough PKC later revised its filings based on new arguments recently presented to the DRB, the original SEC filings evidence the parties' original intent concerning the scope of the Binding DRB Agreement and confirmed that the claims pending before DRB3 are to be decided pursuant to the nonbinding process.R.06249-R.06250. These filings, however, were made at a time when DRB2 had indicated, in its Order 14, that it would hear the major pending claims (" The Mainline Excavation, and the MBTA Red Line Station, Transitway and FRB Impact Claim"). R.07525-R.07526. When DRB2 rethought this position in Order 16, leaving significant portions of PKC's claims for DRB3 to decide, Perini amended its disclosures accordingly. R.07532-R.07533; R.06250.
3. In the same vein, the Project Director quoted the following language from page 2 of a May 12, 2000 memorandum from PKC to DRB2:
To find a complete, unobscured copy of the memorandum, one must look to MassDOT's supplemental (March 28, 2012) record submission. Obviously, MassDOT at some point abandoned its position that DRB1 had made a binding decision on all issues relating to compensable time.
Section 6 of Binding DRB Agreement states[, ] " The DRB shall adjudicate any claims between the Parties concerning the claims listed on Exhibit 1 pursuant to the procedures set forth in the " Amended Meeting Rules, " a copy of which is attached to this Binding DRB Agreement as Exhibit 2." The meaning of this section is clear, namely, the DRB's authority to act in a binding manner is strictly limited to issues listed in Exhibit 1 that have been presented to the Board in accordance with the amended rules specified in Exhibit 2.R.06245-R.06246 (bolding and italics added by Project Manager), quoting from MASS00175_01.001-MASS00177_01.001; see MassDOT Request for Findings, ¶ 33.
The sentence immediately following the quoted excerpt added, " The only two issues that the DRB would have had authority to act on were CP-264 and CP-294." When the Memorandum is read in its entirety, it is clear that PKC was writing to rebut MassDOT's argument to DRB2 that the parties had orally agreed over lunch to " request the prior DRB [i.e., DRB1] to make a 'global' and 'binding' determination of compensable time for all disputes for-ever-after ...." 01_MASS00175. The argument was not over what the Exhibit 1 CPs embraced, but rather, what claims had been presented to, and thus decided by, DRB1.
In fact, on the arbitrability issue PKC's position was the same then as it is now. On page 3 of the same Memorandum, PKC stated:
The correspondence between the Parties' attorneys in negotiating this binding DRB Agreement and Certification clearly shows the intent of the Parties to not limit PKC's ability to present to the DRB an omnibus claim for compensable time and/or for additional compensation from the MHD for impact costs arising out of and/or related to the performance of the work identified in Exhibit 1 (ref. Amended Meeting Rules and Procedures, paragraph 3.B).01_MASS00177 (emphasis supplied). And on page 9: In conclusion, the following facts are self-evident:
5. The Parties specifically drafted the binding DRB Agreement and Certification to maintain PKC's right to an omnibus claim for compensable time and/or for additional compensation for impact costs arising out of and/or related to the performance of the work identified in Exhibit 1 ....01_MASS00183 (emphasis supplied).
In short: the 23 Atlantic Avenue Bypass CPs were arbitrable, and the Project Director's rulings to the contrary were based on errors of law and were unsupported by substantial evidence.
C. The Five Non-Atlantic Avenue Bypass CPs: CP 611A, CP 622A, CP 900, CP 906, and CP 975.
As detailed above (¶ ¶ 53-180), each of the additional five CPs at issue in this case, unrelated to the Atlantic Avenue Bypass, stemmed from events set in motion before January 1, 1999 and was " related to" or " concerning" a CP listed on Exhibit 1.
o PKC issued CP 611A, pertaining to a credit to MassDOT for the salvage value of scaffolding at 695 Atlantic Avenue, in response to Mod A312, which MassDOT had issued to resolve CP 611. The latter was listed on Exhibit 1 as " CP #611 - Plymouth Rock Building, Scaffolding." o PKC issued CP 622A to seek the costs of station finishes in the MBTA Transitway and Red Line areas of the job. As its numerical designation suggested, CP 622A was a subpart of CP 622, which was listed on Exhibit 1 but for which the construction manager (BPB) neglected to supply a description. The documentary record established that CP 622 was a claim for costs arising out of all finishes work on the job, and CP 622A was issued to track a specific portion of this work. o In October 1998, the parties executed Mod 411 for the deletion of a shear key within the tunnel base slab and for the addition of shear studs where the shear key was to be eliminated. To track this work PKC issued CP 466, which Exhibit 1 described as " CP #466 - Deletion of Base Slab Shear Keyway." Later, PKC discovered that the contract drawings had omitted shear studs in certain areas included as part of Contract Modification 411 and CP 466, and opened CP 900 to track costs associated with adding shear studs in these areas as originally contemplated by Contract Modification 411. o Exhibit 1 listed " CP #716 - Redline Drift I, " which PKC had issued in response to Mod 620 in order to track the costs of " drift" concrete to be poured in the Red Line South Station facility and other related work. In early 2000, PKC discovered an error in the MBTA Redline Station drawings supplied by MassDOT: the " drift" concrete it had added pursuant to Mod 620 was occupying some of the same space as air flues in the Mainline Tunnel were to occupy. As a result of this conflict, PKC had to chip the concrete it had previously poured pursuant to Contract Modification 620 and CP 716, and it tracked the cost of this work using CP 906. o Finally, CP 108, listed on Exhibit 1, tracked PKC's costs in connection to a change in the work (resting the northeast tunnel slab on a combination of granular soil and a concrete drift wall instead of just granular backfill as originally specified). This change resulted in a necessary structural modification and redesign of the slab itself, the cost of which PKC tracked in CP 975.
Just as with the Atlantic Avenue Bypass CP, the parties' correspondence on each of these five CPs amply demonstrated that both sides understood that the new, post-1998 CPs were merely extensions of the old, pre-1999, Exhibit 1 CPs. In ruling that claims under the new CPs were non-arbitrable, the Project Director ignored both the applicable legal standard and the record evidence, much as he did in his rulings on the Atlantic Avenue Bypass CP. His rulings were thus based on an error of law and unsupported by substantial evidence.
D. PKC's Impact and Constructive Acceleration Damage Claims.
The presumption in favor of arbitrability means that if a claim is arbitrable, all damages issues related to it are arbitrable. See, e.g., Drywall Sys., Inc. v. ZVI Constr. Co., 435 Mass. 664, 667, 761 N.E.2d 482 (2002) (multiple damages); City of Lawrence v. Falzarano, 380 Mass. 18, 29, 402 N.E.2d 1017 (1980) (damages for delay and loss of anticipated profits); Advest v. McCarthy, 914 F.2d 6, 10-11 (1st Cir. 1990) (restitution); Raytheon Co. v. Automated Bus. Sys. Inc. , 882 F.2d 6 (1st Cir. 1989) (punitive damages); Univ. of Alaska v. Modern Constr., Inc. , 522 P.2d 1132 (Alas. 1974) (impact damages).
The Project Director ignored this established legal principle. Instead of determining whether the impact claims (including constructive acceleration claims) were related to Exhibit 1 claims, the Project Director looked at whether the constructive impact claims themselves were listed on Exhibit 1, declaring:
o that " PKC's claims for impact costs and constructive acceleration are not disputes listed on Exhibit 1 of the Binding DRB Agreement, " R.06139-R.06140; o that " [b]ecause the dispute concerning constructive acceleration is not listed on Exhibit 1 to the Binding DRB Agreement, the DRB's Decision is subject to my review, " R.06249; o and by way of specific example, that " PKC's claims for impacts and for constructive acceleration associated with its Mainline Claim - two disputes that are not listed on Exhibit 1 to the Binding DRB Agreement... are not governed by the Binding DRB Agreement." R. 06138.
These rulings were errors of law, because they disregarded the established legal principle that an arbitrable claim means arbitrable damages.
The Project Director also overlooked the fact that the 1999 Agreement expressly contemplated, in Exhibit 2, that PKC would " present to the DRB, as part of these proceedings, an omnibus claim for a compensable time extension and/or for additional compensation from the MHD for impact costs arising out of and/or related to the performance of the work identified in Exhibit 1." R.06230.
By contrast, DRB3 in its Mainline Impact Claim Decision (R.05112-R.05215) carefully distinguished between impact damages that were " attributable to CPs that are subject to the Binding Agreement" and those that were " attributable to CPs that are not subject to the Binding Agreement, " and specified on this basis how much of its award was binding and how much was merely advisory. R.05198. DRB4 took the same approach in its September 3, 2010 " Determination Regarding PKC's MBTA Impact Claim, " R.05591-R.05594, its January 15, 2011 " Determination Regarding PKC's Site Restoration Claim, " R.05736-R.05740, and its May 21, 2011 " Determination Regarding PKC's Traffic Impact Claim." R.05875-R.05877. This, not the Project Director's method, was the correct one, honoring both binding legal precedent and the express language of Exhibit 2 to the 1999 Agreement. The Project Director's determination that the impact and constructive acceleration claims were non-arbitrable was based on an error of law and unsupported by substantial evidence.
E. Remedy.
The Project Directors' decisions denying the arbitrability of the claims at issue in these cases cannot stand. Because each stemmed from an error of law (in addition to flawed factfinding); each of the claims at issue were arbitrable as a matter of law; and the DRBs have already held hearings on the merits and made awards as was, for arbitrable claims, their job, there would be no point in remanding these matters to the Project Director.
There remains the question whether and on what terms the disputes should be remanded to the DRBs. Initially, PKC suggested that
A remand to the Project Director could not possibly serve any purpose, given that the Project Director is without power to make rulings on arbitrable claims. Mass. Hwy Dept. v. Perini Corp. , 2002 WL 968867 at *8, C.A. No. 00-4096 (van Gestel, J.) (March 20, 2002); Mass. Hwy Dept. v. Perini Corp., 2001 WL 1249793 at *6, C.A. No. 00-4096 (van Gestel, J.) (Aug. 13, 2001) (" insofar as the Project Director is concerned, his power to overrule, alter or vary DRB arbitration decisions is limited to those determinations that are contractually non-binding"); see R.06114 (PD acknowledges that DRB's decisions on arbitrable claims " are not subject to further review by the Project Director").
the Court should declare that the Project Director's arbitrability determinations are based on error of law andlor lack substantial evidentiary support and vacate the PDDs. See M.G.L. c. 30, § 39J. The Court should also issue a declaration that the disputed PKC claims are subject to arbitration under the Binding DRB Agreement and that the DRB's awards on those arbitrable claims are binding. The Court should then proceed to hear MassDOT's remaining challenges to Mainline and Time awards and confirm the DRBs' remaining arbitration awards. In addition, to the extent that the Court determines that any claims are not subject to arbitration under the Binding DRB Agreement, the Court should remand to the DRB for determination of the direct costs and impact costs associated with those disputed claims that are arbitrable.
Memorandum of Law in Support of PKC's Motion for Judgment on the Pleadings on the Issue of Arbitrability (7/2/13), pp. 67-68. Since then, it appears, PKC may have reconsidered.
In its proposed findings of fact and conclusions of law (10/28/13), p. 94, however, PKC seems to change course, suggesting that because certain of the arbitration awards have been reviewed and vacated on the issue of who - the Project Director or the DRB - ought to have decided arbitrability, " the prudent course of action is to remand the awards to the original DRBs for reissuance of their awards without a rehearing."
[28]Naturally, should a challenge on the merits of any award succeed, remand might or might not be required to set things right. See Mass. Hwy. Dept. v. Perini Corp., 83 Mass.App.Ct. 96, 981 N.E.2d 721 (2013); Mass. Hwy. Dept. v. Perini Corp. , 83 Mass.App.Ct. 96, 981 N.E.2d 721 (2013); SUCV2008-5300, Paper No. 67.
I agree with PKC that in the present circumstances, there is no point in requiring the DRBs to go back to the drawing board, hold new evidentiary hearings, and make new findings and rulings. Of course, both the Massachusetts and the federal arbitration statutes generally allow remand, Mass. Gen. Laws ch. 251, § 12(c); 9 U.S.C. § 10(b), and it would certainly be indicated were there anything meaningful for the DRBs to do. See, e.g., Kittredge v. Kittredge Holdings, Inc. , 2002 WL 1923851, MICV2002-0824 (Houston, J.) (July 3, 2002) (allowing motion to vacate arbitration award for lack of findings and statement of reasons as required by arbitration agreement, and remanding award to arbitrator " without rehearing" with instruction that arbitrator reissue award with findings and reasons); Kashner Davidson Securities Corp. v. Mscisz, 601 F.3d 19 (1st Cir. 2010) (affirming district court's discretion to remand vacated award to arbitration where arbitrators, in dismissing certain claims as a discovery sanction, had acted in manifest disregard of the law); National Hockey League Players' Assn. v. National Hockey League , 30 F.Supp.2d 1029 (N.D. III. 1999) (award vacated because arbitrator " considered the parties' prior bargaining history despite their mutual agreement to the contrary"; on remand, arbitrator revised and reissued award without rehearing or re-opening the record; court dismissed an action to vacate the reissued award);
In this case, though, the DRBs have already heard the evidence at excruciating length, ruled (also at length) on the merits, and issued awards as if they were arbitrators, which the Court has now ruled they in fact were. While I understand that MassDOT may, as a second line of the defense, seek review of the awards in this Court on any of the grounds enumerated in G.L. c. 251, § 12(a)(1) - (4), I do not see the need to reconvene the long-since disbanded DRB3 and DRB4 - or worse, assemble a brand-new DRB6 - just so that they may reissue the same awards with all arbitrability determinations excised.
Courts have held, in cases in which the reviewing court has ruled that a claim was arbitrable and that the arbitrator's award withstood the statutorily circumscribed review on the merits, that a remand would be pointless, even if the wrong entity had initially ruled on arbitrability and/or if there were other curable defects in procedure. See, e.g., Shank/Balfour Beatty v. IBEW Local 99, 497 F.3d 83, 93 (1st Cir. 2007) (where court determined that arbitrator had improperly ruled on arbitrability, but court found dispute was arbitrable and that award survived review on the merits, remand for rehearing" would lead to the senseless and inefficient result of sending the matter back to the arbitrator to redo the arbitration he had just done properly" ); I.S. Joseph Co. v. Michigan Sugar Co., 803 F.2d 396, 400 (8th Cir. 1986) (noting that, if district court determines that issue is arbitrable, then " it will not be necessary to repeat the arbitration process" and the arbitrator's award " would stand"); Spector v. DOV Torenberg, 852 F.Supp. 201 (S.D.N.Y. 1994) (arbitrators issued untimely modification to their award; court found that the award, as amended, survived review on the merits; " since the arbitrators have already indicated the result they will reach, such a rehearing would merely serve to exalt form over substance at the cost of needless expense and delay, " and would run counter to " arbitration's goal of achieving the swift and inexpensive resolution of disputes"); Continental Cas. Co. v. Staffing Concepts, Inc., No. 8:09 Civ. 02036, 2011 WL 7459781, at *10 (M.D. Fla. Dec. 11, 2011) (" in the event that the Court upholds the assignment and determines that this matter was properly before the Arbitration Panel, the Court recommends that the Interim Award should stand, subject, of course, to whatever appellate remedies might be available"), report and recommendation adopted, 8:09 Civ. 2036, 2012 WL 715652 (M.D. Fla. Mar. 5, 2012).
I adopt this sensible approach, and decline to remand the cases to the DRBs at this time. The relief to which the parties are entitled, therefore, is this: (1) a ruling from the Court that the claims at issue were arbitrable, and (2) an opportunity to litigate, if they so choose and provided the issue has been properly pled and preserved, the issues of (a) whether any award was procured by " corruption, fraud or other undue means"; (b) whether the DRBs were infected by " evident partiality, " " corruption, " or " misconduct" on the part of any member; (c) whether the DRBs " exceeded their powers"; or (d) whether they improperly refused a postponement, refused to hear material evidence, " or otherwise so conducted the hearing, contrary to the provisions of section five [of Chapter 251], as to prejudice substantially the rights of a party." G.L. c. 251, § 12(a).
ORDER
For the foregoing reasons, 1. The plaintiff's Motion for Judgment on the Pleadings as to these ten consolidated cases is ALLOWED, in that
(a) Each of the enumerated claims at issue in these cases is hereby determined to be subject to the binding dispute resolution process set forth in the parties' March 25, 1999 Binding Dispute Resolution Agreement;
(b) The Project Directors' determinations to the contrary, setting aside the binding awards as to these claims by DRB3 and DRB4, are hereby vacated; and (c) The DRBs' awards on these claims are hereby reinstated, subject to review by this Court on the grounds enumerated under G.L. c. 251, § 12(a)(1) - (4), provided a party has properly pleaded and preserved a claim for relief and wishes to pursue it.2. Counsel shall appear at a status conference in Courtroom 1309 at 2:00 p.m. on July 10, 2014, or such other more convenient date on which they may agree and notify the session clerk, at which they shall be prepared to discuss all further proceedings (if any) needed to bring these cases to disposition. If the parties agree that no such proceedings are needed they shall endeavor to agree on a form of judgment, with all appellate rights preserved.