{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-21T02:01:15-04:00", "answer_date": "2024-06-21 02:01:15", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "3389934", "url": "\/study-help\/questions\/read-the-supreme-court-decision-below-and-answer-the-following-3389934", "question_creation_date_js": "2024-06-21T02:01:15-04:00", "question_creation_date": "Jun 21, 2024 02:01 AM", "meta_title": "[Solved] Read the Supreme Court Decision below and | SolutionInn", "meta_description": "Answer of - Read the Supreme Court Decision below and answer the following question: 1. What was the supreme court's decision? Why | SolutionInn", "meta_keywords": "read,supreme,court,decision,below,answer,question,1,s,appeal,requires,determine", "question_title_h1": "Read the Supreme Court Decision below and answer the following question: 1. What was the supreme court's decision? Why? This appeal requires the Court to", "question_title": "Read the Supreme Court Decision below and answer the following question: 1.", "question_title_for_js_snippet": "Read the Supreme Court Decision below and answer the following question 1 What was the supreme court's decision Why This appeal requires the Court to determine whether an equitable adjustment should be awarded to a successful bidder of a public contract whose performance is rendered impracticable during the course of the contract M J Paquet, Inc (Paquet) submitted an unbalanced bid for a contract with the New Jersey Department of Transportation (DOT) to rehabilitate several highways and bridges in New Jersey The DOT awarded Paquet the contract Nearly one year later, the Occupational Safety and Health Administration (OSHA) issued revised regulations substantially affecting Paquet's performance of the bridge painting work After the parties could not agree on an increased amount for the bridge painting work, the DOT deleted that work from the contract Thereafter, Paquet commenced this action seeking legal and equitable relief The commissioner of the DOT shall advertise for bids on the work and materials covered by the plans and specifications for each project and must award the contract to the lowest responsible bidder This practice of public bidding is universally recognized and deeply embedded in the public policy of this State concluded that Paquet could not make a claim for additional compensation under the contrac arising from its unbalanced bid Although the Appellate Division d id not disagree with the principle of equitable adjustment, the court found the principle inapplicable to Paquet's contract The court began its discussion by noting that even though the principle of equitable adjustment was not expressly set forth in the contract, we think that this principle would ordinarily fall within the purview of the parties' implied covenant of good faith and fair dealing However, because the DOT specifications were incorporated into the contract and because Specification 102 08 expressly authorized the DOT to refuse Paquet's claim, the court stated that it perceive d no injustice in effectuating Specification 102 08 as written Finally, the Appellate Division noted that its decision was in accord with federal cases that have held that limiting clauses such as Specification 102 08 vitiate the standard provision requiring equitable adjustments Although we agree that the absence of an equitable adjustment clause in a public contract is not dispositive in respect of whether an equitable adjustment should be granted in a specific case, we disagree with the Appellate Division's holding that Specification 102 08 prohibits granting an equitable adjustment in this appeal for two reasons First, we find that Specification 102 08 is ambiguous and therefore should be construed against the draftsman, the DOT Second, even assuming that Specification 102 08 is not ambiguous and that it denies Paquet relief by its plain language, we nonetheless would find in favor of Paquet given the unique circumstances presented in this appeal for additional compensation may be subject to varying interpretations, we find Specification 102 08 ambiguous An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations ' Generally, the terms of an agreement are to be given their plain and ordinary meaning The term additional is defined in Webster's Third New International Dictionary 24 (1971) as existing or coming by way of addition Webster's defines the term addition as t he result of adding anything added INCREASE, AUGMENTATION By its plain meaning, the phrase claim for additional compensation means a claim for increased or augmented compensation Paquet asserts that it is not seeking additional compensation because it is not seeking increased or augmented compensation over the original contract price Rather, it seeks compensation only for the non bridge painting work in the contract that it has completed and for which the DOT promised to pay when the parties entered into the contract The DOT considers it of no moment that the payment sought by Paquet is not compensation over and above the original contract price in that Paquet would have received the payment had the inflated bid item not been deleted from the contract Rather, the gravamen of the DOT's claim is that Paquet's claim for compensation arose from an unbalanced bid item or items Although Paquet's interpretation is reasonable, the DOT's interpretation of the phrase claim for additional compensation also is plausible First, while Paquet is not seeking compensation above the original contract price, it is requesting compensation above the amount of the understated bid items Accordingly, the plain meaning of additional increased or augmented arguably could apply to the instant case Second, the DOT's interpretation bolsters Specification 102 08's edict that pay items in a bid accurately reflect the actual cost of the work to be performed We conclude that because the phrase claim for additional compensation is subject to more than one reasonable interpretation, Specification 102 08 is ambiguous Where a court determines that an ambiguity exists in a government contract the writing is to be strictly construed against the draftsman, the government entity Because we find that Specification 102 08 is ambiguous and must be construed against the DOT, we conclude that that specification does not bar Paquet from seeking an equitable adjustment from the DOT The decision of the Appellate Division is reversed and the matter is remanded to the trial court for a determination of the amount of the equitable adjustment The purpose of public bidding is to 'secure for the public the benefits of unfettered competition' and to 'guard against favoritism, improvidence, extravagance, and corruption ' Typically, public contracts involving the federal government contain equitable adjustment clauses safeguarding the contractor in circumstances where the government modifies the contract, thereby increasing or decreasing the cost to the contractor for the work to be performed The term equitable adjustment is a legal term of art Its proper measure is the difference between what it would have cost to perform the work as originally required and what it cost to perform the work as changed ' Stated simply, the purpose of an equitable adjustment is to keep a contractor whole when the Government modifies a contract A significant majority of federal courts that have addressed the principle of equitable adjustment refer to a specific clause contained in the public contract at issue However, some courts have discussed and applied the principle generally, without reference to a clause in theAs noted, the Appellate Division relied on the following sentence in Specification 102 08 as the lynchpin for its holding The DOT will not consider any claim for additional compensation arising from the bid on an item, or group of items, inaccurately reflecting the cost of such work or containing a disproportionate share of the bidder's anticipated profit, overhead and other costs It is undisputed that Paquet's bid for the bridge painting work included an inflated amount of cost, overhead, and anticipated profit while other bid items contained an understated amount of cost, overhead, and anticipated profit It also is undisputed that Paquet's claim for compensation arose from those unbalanced bid items However, because the phrase claimThus, by requesting that the entire $826,473 50 amount not be deleted from the contract, Paquet contends that it is not making a claim for additional compensation from the DOT Instead, Paquet is requesting that portion of the $826,473 50 that represents its payment for the non bridge painting pay items that it understated That sum is compensation for work that has not been deleted from the contract by the DOT work that Paquet has performed and for which the DOT is contractually obligated to pay It is not increased or augmented compensation, because the DOT, and ultimately the New Jersey taxpayer, will not pay any more under the contract than it would have paid if the new OSHA regulations had not been promulgated In light of the plain meaning of the term additional, Paquet's interpretation of the phrase claim for additional compensation is reasonable The DOT asserts, and the Appellate Division held, that the phrase claim for additional compensation applies to the facts of this appeal because Specification 102 08 warn s the bidder that it can make no claim based on the fact that it has disproportionately allocated cost, overhead and profit among the various pay items Thus, the phrase arguably encompasses the facts here a contractor who submits a bid containing both an inflated bid item and an offsetting, understated bid item The inflated bid item is deleted subsequently and the contractor requests compensation for the portion of the inflated bid item that represents the remainder of the contractor's compensation for the understated bid item given contract ( The measure for an equitable adjustment to the contract price resulting from a change order is framed in terms of 'reasonable cost ' ) ( Equitable adjustments are simply corrective measures utilized to keep a contractor whole when the Government modifies a contract ) As noted by the Appellate Division, some federal courts have held that a specific clause limiting overhead payments in the event of change orders supersedes a general provision providing for an equitable adjustment A number of states also provide for equitable adjustments in public contracts, including Florida, Louisiana, Maryland, New York, Ohio, Oregon and Texas Paquet contends that the DOT improperly adjusted the contract price by deducting the full amount for the pay items relating to the deleted bridge painting work Because the amount set forth in the contract for the pay items of bridge painting included compensation for work performed on other parts of the contract, Paquet asserts that it should have received an equitable adjustment The Appellate Division found that the DOT correctly reduced the contract price by the full amount of the pay items relating to the bridge painting work in accordance with Specification 102 08, Balanced Bids Specification 102 08 states, in pertinent part Balanced Bids The bidder shall prepare his bid so that it reflects under each Pay Item the actual cost which the bidder anticipates the performance of that particular item entails, together with a proportional share of the bidders anticipated profit, overhead and costs to perform work for which no Pay Item is provided The Department will not consider any claim for additional compensation arising from the bid on an item, or group of items, inaccurately reflecting the cost of such work or containing a disproportionate share of the bidder's anticipated profit, overhead and other costs The Contractor expressly waives the right to pursue such claims either before the Commissioner or under the terms of the New Jersey Contractual Liability Act Because Paquet submitted a bid that contained an inflated amount for the pay items relating to the bridge painting work and an understated amount for other pay items in the contract, Paquet's bid was unbalanced within the meaning of Specification 102 08 Thus, the court", "question_description": "\"image\"image\"image\"image\"image\"image\"image\"image\"image
\"image\"image\"image\"image\"image\"image\"image\"image\"image<\/div><\/div><\/div><\/figure> Read the Supreme Court Decision below and answer the following question: 1. What was the supreme court's decision? Why? This appeal requires the Court to determine whether an equitable adjustment should be awarded to a successful bidder of a public contract whose performance is rendered impracticable during the course of the contract. M.J. Paquet, Inc. (Paquet) submitted an unbalanced bid for a contract with the New Jersey Department of Transportation (DOT) to rehabilitate several highways and bridges in New Jersey. The DOT awarded Paquet the contract. Nearly one year later, the Occupational Safety and Health Administration (OSHA) issued revised regulations substantially affecting Paquet's performance of the bridge painting work. After the parties could not agree on an increased amount for the bridge painting work, the DOT deleted that work from the contract. Thereafter, Paquet commenced this action seeking legal and equitable relief. The commissioner of the DOT \"shall advertise for bids on the work and materials covered by the plans and specifications for each project\" and must \"award the contract to the lowest responsible bidder.\" This \"practice of public bidding is universally recognized and deeply embedded in the public policy of this State.\"concluded that Paquet could not make a claim for additional compensation under the contrac arising from its unbalanced bid. Although the Appellate Division \"d[id] not disagree with the principle of equitable adjustment,\" the court found the principle inapplicable to Paquet's contract. The court began its discussion by noting that \"[even though [ the principle of equitable adjustment was] not expressly set forth in the contract, we think that this principle would ordinarily fall within the purview of the parties' implied covenant of good faith and fair dealing.\" However, because the DOT specifications were incorporated into the contract and because Specification 102.08 expressly authorized the DOT to refuse Paquet's claim, the court stated that it \"perceive[d] no injustice in effectuating [Specification 102.08] as written.\" Finally, the Appellate Division noted that its decision was in accord with federal cases that have held that \"limiting\" clauses such as Specification 102.08 vitiate the standard provision requiring equitable adjustments. Although we agree that the absence of an equitable adjustment clause in a public contract is not dispositive in respect of whether an equitable adjustment should be granted in a specific case, we disagree with the Appellate Division's holding that Specification 102.08 prohibits granting an equitable adjustment in this appeal for two reasons: First, we find that Specification 102.08 is ambiguous and therefore should be construed against the draftsman, the DOT. Second, even assuming that Specification 102.08 is not ambiguous and that it denies Paquet relief by its plain language, we nonetheless would find in favor of Paquet given the unique circumstances presented in this appeal.for additional compensation\" may be subject to varying interpretations, we find Specification 102.08 ambiguous. \"An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations.'* Generally, the terms of an agreement are to be given their plain and ordinary meaning. The term \"additional\" is defined in Webster's Third New International Dictionary 24 (1971) as \"existing or coming by way of addition.\" Webster's defines the term \"addition\" as \"[t]he result of adding: anything added: INCREASE, AUGMENTATION.\" By its plain meaning, the phrase \"claim for additional compensation\" means a claim for \"increased\" or \"augmented\" compensation. Paquet asserts that it is not seeking \"additional compensation\" because it is not seeking \"increased\" or \"augmented\" compensation over the original contract price. Rather, it seeks compensation only for the non-bridge painting work in the contract that it has completed and for which the DOT promised to pay when the parties entered into the contract.The DOT considers it of no moment that the payment sought by Paquet is not compensation over and above the original contract price in that Paquet would have received the payment had the inflated bid item not been deleted from the contract. Rather, the gravamen of the DOT's claim is that Paquet's claim for compensation arose from an unbalanced bid item or items. Although Paquet's interpretation is reasonable, the DOT's interpretation of the phrase \"claim for additional compensation\" also is plausible. First, while Paquet is not seeking compensation above the original contract price, it is requesting compensation above the amount of the understated bid items. Accordingly, the plain meaning of additional- \"increased\" or \"augmented\"-arguably could apply to the instant case. Second, the DOT's interpretation bolsters Specification 102.08's edict that pay items in a bid accurately reflect the actual cost of the work to be performed. We conclude that because the phrase \"claim for additional compensation\" is subject to more than one reasonable interpretation, Specification 102.08 is ambiguous. Where a court determines that an ambiguity exists in a government contract. the writing is to be strictly construed against the draftsman, the government entity. Because we find that Specification 102.08 is ambiguous and must be construed against the DOT, we conclude that that specification does not bar Paquet from seeking an equitable adjustment from the DOT. The decision of the Appellate Division is reversed and the matter is remanded to the trial court for a determination of the amount of the equitable adjustment.The purpose of public bidding is to \" 'secure for the public the benefits of unfettered competition' and to 'guard against favoritism, improvidence, extravagance, and corruption.'* Typically, public contracts involving the federal government contain equitable adjustment clauses safeguarding the contractor in circumstances where the government modifies the contract, thereby increasing or decreasing the cost to the contractor for the work to be performed. The term \"equitable adjustment\" is a legal term of art. Its proper measure is \"the difference between what it would have cost to perform the work as originally required and what it cost to perform the work as changed.' * Stated simply, the purpose of an equitable adjustment is \" to keep a contractor whole when the Government modifies a contract. A significant majority of federal courts that have addressed the principle of equitable adjustment refer to a specific clause contained in the public contract at issue. However, some courts have discussed and applied the principle generally, without reference to a clause in theAs noted, the Appellate Division relied on the following sentence in Specification 102.08 as the lynchpin for its holding: \"The [DOT] will not consider any claim for additional compensation arising from the bid on an item, or group of items, inaccurately reflecting the cost of such work or containing a disproportionate share of the bidder's anticipated profit, overhead and other costs.\" It is undisputed that Paquet's bid for the bridge painting work included an inflated amount of cost, overhead, and anticipated profit while other bid items contained an understated amount of cost, overhead, and anticipated profit. It also is undisputed that Paquet's claim for compensation arose from those \"unbalanced\" bid items. However, because the phrase \"claimThus, by requesting that the entire $826,473-50 amount not be deleted from the contract, Paquet contends that it is not making a \"claim for additional compensation\" from the DOT. Instead, Paquet is requesting that portion of the $826,473-50 that represents its payment for the non-bridge painting pay items that it understated. That sum is compensation for work that has not been deleted from the contract by the DOT-work that Paquet has performed and for which the DOT is contractually obligated to pay. It is not \"increased\" or \"augmented\" compensation, because the DOT, and ultimately the New Jersey taxpayer, will not pay any more under the contract than it would have paid if the new OSHA regulations had not been promulgated. In light of the plain meaning of the term \"additional,\" Paquet's interpretation of the phrase \"claim for additional compensation\" is reasonable. The DOT asserts, and the Appellate Division held, that the phrase \"claim for additional compensation\" applies to the facts of this appeal because Specification 102.08 \"warn[s] the bidder that [it] can make no claim based on the fact that [it] has disproportionately allocated cost, overhead and profit among the various pay items.\" Thus, the phrase arguably encompasses the facts here-a contractor who submits a bid containing both an inflated bid item and an offsetting, understated bid item. The inflated bid item is deleted subsequently and the contractor requests compensation for the portion of the inflated bid item that represents the remainder of the contractor's compensation for the understated bid item.given contract. (\"The measure for an equitable adjustment to the contract price resulting from a change order is framed in terms of 'reasonable cost.' \"); (\"Equitable adjustments are simply corrective measures utilized to keep a contractor whole when the Government modifies a contract. \"). As noted by the Appellate Division, some federal courts have held that a specific clause limiting overhead payments in the event of change orders supersedes a general provision providing for an equitable adjustment. A number of states also provide for equitable adjustments in public contracts, including Florida, Louisiana, Maryland, New York, Ohio, Oregon and Texas. Paquet contends that the DOT improperly adjusted the contract price by deducting the full amount for the pay items relating to the deleted bridge painting work. Because the amount set forth in the contract for the pay items of bridge painting included compensation for work performed on other parts of the contract, Paquet asserts that it should have received an equitable adjustment. The Appellate Division found that the DOT correctly reduced the contract price by the full amount of the pay items relating to the bridge painting work in accordance with Specification 102.08, \"Balanced Bids.\" Specification 102.08 states, in pertinent part:Balanced Bids. The bidder shall prepare his bid so that it reflects under each Pay Item the actual cost which the bidder anticipates the performance of that particular item entails, together with a proportional share of the bidders anticipated profit, overhead and costs to perform work for which no Pay Item is provided. The Department will not consider any claim for additional compensation arising from the bid on an item, or group of items, inaccurately reflecting the cost of such work or containing a disproportionate share of the bidder's anticipated profit, overhead and other costs. The Contractor expressly waives the right to pursue such claims either before the Commissioner or under the terms of the New Jersey Contractual Liability Act. Because Paquet submitted a bid that contained an inflated amount for the pay items relating to the bridge painting work and an understated amount for other pay items in the contract, Paquet's bid was unbalanced within the meaning of Specification 102.08. Thus, the court", "transcribed_text": "", "related_book": { "title": "Survey of Accounting", "isbn": "9780538489737, 538749091, 538489731, 978-0538749091", "edition": "5th Edition", "authors": "Carl S Warren", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/59.jpg", "uri": "\/textbooks\/survey-of-accounting-5th-edition-59", "see_more_uri": "" }, "free_related_book": { "isbn": "979-8746816153", "uri": "\/textbooks\/the-wise-man-investment-method-how-to-save-and-invest-wisely-1st-edition-979-8746816153-195796", "name": "The Wise Man Investment Method How To Save And Invest Wisely", "edition": "1st Edition" }, "question_posted": "2024-06-21 02:01:15", "see_more_questions_link": "\/study-help\/questions\/social-sciences-sociology-2021-May-18", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/a-court-case-involving-pipeline-damage-hinges-on-knowing-the", "description": "A court case involving pipeline damage hinges on knowing the flow rate at the time of valve closure. 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