Repository: UIHistories Project: Board of Trustees Minutes - 1952 [PAGE 519]

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BOARD OF TRUSTEES

[March 13

In addition to asserting that the University of Illinois does not pay its bills, the Warner Construction Company on both occasions has claimed damages of approximately #247,000 beyond the payments allegedly due on contracts. It is not my intention to present a legal brief but simply, at t h e request of the members of the Board present at the meeting on February 15, to outline the principal events and to state the University's position. In preparing this report I have depended upon the records and statements of Mr. C. S. Havens, Director of the Physical Plant; Mr. E, L. Stouffer, Architect; Mr. John Doak, Superintendent of Buildings and Grounds; Mr. Lloyd Morey, Comptroller; Mr. W. E. Britton, Professor of Law (former Legal Counsel); and Judge John H. Armstrong, special counsel for the University in this matter. However, they are not responsible for this report. This report is in two parts: I. The cost-plus contract for the Lincoln Avenue Residence Halls II. The fixed price contract for the Utilities Distribution System For the cost-plus case (I), I shall present A. A Digest of the Contract B. Financial and Contractual Facts C. Actions of the University of Illinois D. Actions of the Warner Cbnstruction Company E. Claims and Counterclaims F. The Way the Warner Construction Company Can Get Its Money Since the difficulties under II would constitute a wearisome duplication of I, I shall cover them in a briefer note.

I. CONTRACT WITH W A R N E R CONSTRUCTION COMPANY — LINCOLN A V E N U E RESIDENCE HALLS

A. Digest of the Contract, Lincoln Avenue Residence 1. Contract provides that t h e contractor shall perform general work covered by the architects' plans and specifications, instructions to bidders, and the contractor's proposal of December 6, 1946. 2. Due to fund limitations, contract work is divided into two parts: Part I for foundation and site clearance and work incidental thereto; Part 2, conditioned upon receipt of state appropriation by August I, 1947, covered the completion of general contract work. 3. Completion date for Part I was June 28, 1947. 4. Completion date for Part 2 based on the Warner Construction Company's proposal was defined as 365 days after authorization to proceed. (Since this authorization to proceed with Part 2 was dated July 16, 1947, the required completion date became July 16, 1948.) 5. Contract price is denned as the actual cost, plus a fixed fee for contractor's profit and overhead, the sum of which shall not exceed a guaranteed maximum cost. Any savings under the guaranteed limit are to be divided 75 per cent to the owner and 25 per cent to the contractor. The guaranteed limit for Part 1 is #180,000, Part 2 $1,820,000. Of the $2,000,000, #190,000 is defined as the contractor's fee, subject to adjustment on t h e basis of change orders issued. 6. Payments to the contractor t o be based on contractor's request, supported by payroll data, invoices, and receipted bills, approved by the architects and the University Auditor. 7. Payment to the contractor is to be made within 30 days after the issuance of architects' certificates. a. Overtime and incentive pay, except insofar as overtime may be necessitated by emergency, is subject to the approval of t h e architects. 8. Payments on the contractor's fee limited to 10 per cent of the earned fee until time of final payment. 9. Final payment is subject to architects' approval of the work and submission by the contractor of satisfactory evidence that all charges for labor, materials, and other indebtedness in connection with the contract have been paid. 10. Conditions under which the contractor may be entitled to an extension of time are defined, but claims thereunder must be presented in writing within seven days after commencement of such delay. 11. Conditions defined under which the owner may, or may not, satisfy indebtedness should the contractor allow indebtedness to accrue. 12. Matters of dispute between the two parties to the contract shall be referred to