Kreisler Borg Florman on behalf of L. A. Wenger Contracting Co. v ...

<strong>Kreisler</strong> <strong>Borg</strong> <strong>Florman</strong> on behalf of L. A. Wenger Contracting
Co. v. Dept. of Design and Construction
OATH Index Nos. 338/07, 339/07, 340/07, mem. dec. (Jan. 26, 2007)
Petitions seeking compensation for denied claims dismissed as
untimely.
____________________________________________________
NEW YORK CITY OFFICE OF
ADMINISTRATIVE TRIALS AND HEARINGS
CONTRACT DISPUTE RESOLUTION BOARD
In the Matter of
KREISLER BORG FLORMAN
Petitioner
- against -
DEPARTMENT OF DESIGN AND CONSTRUCTION
Respondent
____________________________________________________
MEMORANDUM DECISION
FAYE LEWIS, Administrative Law Judge/Chair
KENNETH JOCKERS, Deputy Counsel, Mayor's Office of Contracts
BRUCE FEFFER, Prequalified Panel Member
Pending before the Contract Dispute Resolution Board ("the Board") are the petitions of
<strong>Kreisler</strong> <strong>Borg</strong> <strong>Florman</strong> ("petitioner" or “KBF”) on behalf of its subcontractor L.A. Wenger
Contracting Co. (“LAW”) seeking payment totaling $522,233 under a construction management
contract it entered into with the Department of Design and Construction (“DDC” or
“respondent”). On July 26, 2006, LAW submitted three petitions based on claims arising out
of this contract to the Board. Respondent moved to dismiss the petitions because LAW, as a
subcontractor, lacked privity of contract with the City. While this motion was pending,
KBF filed petitions identical to LAW’s on LAW’s behalf. By agreement, KBF’s petitions
were substituted for LAW’s petitions and were deemed to have been filed on September 27,
2006.
On November 9, 2006, respondent moved to dismiss KBF’s petitions because of the
contractor’s failure to meet contractual time frames. Petitioner submitted a response in

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opposition to the motion on December 12, 2006. Respondent submitted a reply on December 28,
2006. For the reasons set forth below, the Board finds petitioner’s claims are time-barred and
grants respondent’s motion to dismiss.
BACKGROUND
On January 14, 1999, DDC entered into a contract with KBF for the construction of a
center and training facility for the Administration for Children’s Services. On May 7, 1999,
KBF entered into a subcontract with LAW to perform general construction work on this
project. The three claims arise out of this contract.
Index No. 338/07 – Additional demolition of elevator components
This petition seeks compensation in the amount of $29,640 for the cost of the
demolition of elevator components. On June 4, 1999, LAW requested a clarification from
KBF about how to proceed after discovering an existing elevator and elevator components
in an excavated elevator pit (Pet. Ex. A). In a letter dated June 14, 1999, KBF directed
LAW to remove these components without additional compensation (Pet. Ex. A). This
letter was followed by two KBF field memos dated August 2, 1999 and October 6, 1999,
which directed LAW to remove other existing elevator components and motor generators
(Pet. Ex. A). LAW indicated in the “response” section of the August 2 field memo that it
did not consider the removal of these components to be part of its contract but would
comply with KBF’s direction and “submit daily time and material sheets for performing this
work.” (Pet. Ex. A).
In a January 28, 2003 letter, DDC informed KBF that because of the complexity of
the project, it was extending the 10-day deadline for submission of Notices of Dispute to
March 1, 2003 (Pet. Ex. D). By letter dated February 3, 2003, KBF provided LAW with a
copy of this letter and advised LAW that it should submit all notices of dispute to KBF by
February 26, 2003 (Pet. Ex. D). LAW submitted this claim seeking compensation for the
demolition of the existing elevator components to KBF on November 7, 2003 (Pet. Ex. D).
Because the claim was received eight months after the deadline and KBF believed DDC
would find the claim untimely, it did not submit the claim to DDC (Petition at 1). KBF
represented that it later became aware that claims “deemed untimely” by DDC could be

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filed with the Comptroller’s Office (Petition at 1). On December 22, 2005, LAW asked
KBF to submit this claim to the Comptroller, and it did so on December 30, 2005 (Pet. Ex.
D).
On July 5, 2006, the Comptroller dismissed the claim as untimely, reasoning that
KBF’s July 14, 1999 letter stating that LAW would not be compensated for the contested
demolition was a determination or action triggering the 10-day deadline for LAW to file a
Notice of Dispute with the Commissioner; LAW’s submission of this claim to KBF on
November 7, 2003 was late both for the contractual 10-day deadline and the DDC’s
extended deadline of March 1, 2003 (Pet. Ex. C). 1
Index No. 339/07 – Back charge for Cleanup and Housekeeping by KBF
This petition seeks compensation in the amount of $474,093 for cleaning and
housekeeping costs KBF charged to LAW, allegedly because LAW failed to maintain the
work site as required by contract.
On March 10, 2000, KBF notified LAW by letter that the work site was not being
maintained as the contract required and that KBF was adding additional laborers to perform
cleanup and housekeeping work, with compensation to be determined later (Pet. Ex. C). On
April 11, 2000, KBF sent another letter stating that its laborers were cleaning the site and
that it would determine the amount of time the laborers spent cleaning up after each
subcontractor (Pet. Ex. E). KBF informed all the subcontractors on May 23, 2000 that it
was increasing the labor force devoted to cleaning and that the subcontractors would be
back charged for this expense (Pet. Ex. C). LAW responded with letters dated May 26,
2000 and November 13, 2000 stating that it was maintaining the site as required and would
not accept any back charge (Pet. Ex. E; Pet. Ex. C). On May 1, 2001, KBF recommended
that LAW pay a back charge of $474,093.
On February 24, 2003, LAW timely asked KBF to forward its dispute of this charge
to the DDC Commissioner, and KBF did so on February 26, 2003 (Pet. Ex. C). The
Commissioner denied LAW’s claim on March 29, 2004 and permitted the back charge
“contingent upon KBF resolving” disputed cost issues (Pet. Ex. B). On January 8, 2006,
LAW asked KBF to forward this claim to the Comptroller’s Office (Pet. Ex. E), which it did
1 Although KBF did file this claim with the Comptroller, the claim was never submitted to DDC.

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on January 10, 2006. On July 5, 2006, the Comptroller found that the claim was untimely
because LAW was required to file its Notice of Claim within 20 days of the Commissioner’s
determination but instead had waited over one and a half years (Pet. Ex. D).
Index No. 340/07 – Batt Insulation on Ground Floor
This petition seeks compensation in the amount of $18,500 for the installation of batt
insulation on the ground floor in lieu of airkrete.
In a letter dated February 26, 2003, LAW asked KBF to forward this claim to the
DDC Commissioner (Pet. Ex. C). KBF claims not to have received this letter until March 5,
2003 and the letter bears a date stamp indicating that it was received on that day. However,
KBF forwarded the claim to DDC by a letter dated March 4, 2003 (Pet. Ex. C). DDC
rejected the claim on March 20, 2003 because it was received after the March 1 deadline
(Pet. Ex. B). This rejection triggered a 20-day deadline to file a Notice of Claim. LAW did
not request that KBF forward this claim to the Comptroller’s Office until January 8, 2006.
KBF filed the claim with the Comptroller on January 10, 2006.
On July 5, 2006, the Comptroller denied the claim as untimely because it was not
submitted to the Commissioner by the March 1, 2003 deadline and because the Notice of
Claim was not filed within 20 days of the Commissioner’s decision (Pet. Ex. D).
ANALYSIS
The time frames for dispute resolution established by the contract and the Procurement
Policy Board (“PPB”) may not be disregarded without good cause. Alta Indelman,
Architect/Builders Group, LLC v. Dep’t of Sanitation, OATH Index No. 1092/05, mem. dec.
(June 16, 2005); D&D Mason Contractors, Inc. v. Dep’t of Parks and Recreation, OATH Index
No. 158/01, mem. dec. (Aug. 21, 2000). The time frames relevant to this contract are as follows.
Article 29.4(B) of the contract and section 7-05(d)(2) of the PPB rules require the contractor
to submit a Notice of Dispute to the agency head within ten days of “receiving notice of the
determination or action which is the subject of the dispute.” However, because of the
complexity of the project, DDC extended the deadline for the submission of disputes until
March 1, 2003. Article 29.6(A) of the contract and section 7-05(f)(1) of the PPB rules
require the contractor to submit a Notice of Claim to the Comptroller within 20 days of the

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agency head’s decision. Section 7-05 (g) of the PPB rules require that the contractor file
petitions with the Board within 30 days of the Comptroller’s decision.
Respondent asserts that all of petitioner’s claims are time-barred and should be
dismissed. The Board agrees. KBF did not file these petitions with the Board within the
mandated time frame. The Comptroller’s determination for each of the three petitions was
issued on July 5, 2006, requiring KBF to file with the Board within 30 days. KBF did not
file these petitions until September 27, 2006, over two months after the Comptroller’s
determination. Although LAW’s original petitions were timely filed, the parties agreed that
KBF’s petitions would not relate back to LAW’s submission date.
Moreover, even if the petitions had been timely filed with the Board or their lateness
was excused, the petitions would still be dismissed because the contractor missed earlier
deadlines. For each petition, a Notice of Claim was not timely submitted to the
Comptroller. Additionally, KBF never submitted the first petition, 338/07, to DDC as
required by the dispute resolution rules, and submitted the third petition, 340/07, to the
DDC after the applicable deadline had passed.
In the first petition, Index No. 338/07, seeking compensation for the demolition of
elevator components, KBF never submitted a Notice of Dispute to DDC and failed to timely
submit a Notice of Claim to the Comptroller. Indeed, KBF did not file with the Comptroller
until December 30, 2005, almost six years after this dispute arose. KBF’s assertion that it
was unaware that it could file late claims with DDC or file claims that were rejected at the
agency level with the Comptroller does not excuse its failure to abide by contractual time
frames.
In the second and third petitions, Index No. 339/07 and Index No. 340/07, DDC
denied the claims on March 29, 2004 and March 20, 2003, respectively. Petition 340/07
was denied because DDC had not received the Notice of Dispute by the March 1, 2003
deadline. These denials triggered a 20-day deadline for the submission of a Notice of Claim
to the Comptroller. However, for both of these claims, a Notice of Claim was not submitted
until January 10, 2006.
KBF contends in its reply that there was an ambiguity as to whether certain
communications triggered the 10-day deadline to submit a Notice of Dispute and therefore
the claims should not be dismissed. However, the Board is not relying upon the 10-day

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contractual deadline, but rather on the later March 1, 2003 deadline set by DDC for the
submission of all Notices of Dispute. Moreover, the case cited by KBF -- <strong>Kreisler</strong> <strong>Borg</strong>
<strong>Florman</strong> General Construction Co. on behalf of A & F Fire Protection Co., Inc. v. Dep’t of
Design and Construction, OATH Index Nos. 800/06, 801/06, 802/06, 803/06 & 1154/06,
mem. dec. (Apr. 12, 2006) -- in support of its claim of ambiguity is wholly inapposite. In A
& F, the claims at issue had been remanded to the conflict dispute resolution process from
Supreme Court. Two weeks after this order, the subcontractor’s attorney forwarded the
claims to DDC and asked for its review. The Board ruled that two subsequent letters from
KBF, the construction manager, to the subcontractor, did not trigger the 10-day deadline to
submit a Notice of Dispute to DDC because it was unclear that KBF was denying the
remanded claims. No such ambiguity exists here.
There is ample case law to support dismissing the petitions because of untimeliness.
SPMP Joint Venture v. Dep’t of Environmental Protection, OATH Index No. 808/06, mem.
dec. (Jan. 31, 2006) (dismissing petition where contractor filed late claim with
Comptroller); <strong>Kreisler</strong> <strong>Borg</strong> <strong>Florman</strong>/L.A. Wenger Contracting Co., Inc. v. Dep’t of Design
and Construction, OATH Index No. 1088/03, mem. dec. (June 11, 2003) (dismissing
petition where contractor missed deadlines to submit claim to Comptroller and the Board);
D & D Mason Contractors, Inc. v. Dep’t of Parks and Recreation, OATH Index No. 158/01,
mem. dec. (Aug. 21, 2000) (granting City’s motion to dismiss where contractor filed
untimely claims to the agency head and the Board).
CONCLUSION
Accordingly, the petitions are dismissed as untimely. All concur.
Dated: January 26, 2007
Faye Lewis
Administrative Law Judge/Chair

APPEARANCES:
KREISLER BORG FLORMAN
Petitioner
BY: ERIC PLATT
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MICHAEL A. CARDOZO, ESQ.
NYC Corporation Counsel, Attorney for Respondent
BY: GARY ROSENTHAL, ESQ.