Opinion
June 6, 1950.
J.W. PettyJohn and Bedell Bedell, Jacksonville, for relator.
Richard W. Ervin, Attorney General and Fred M. Burns, Assistant Attorney General, for respondent.
The cause is before the Court on a motion to quash an alternative writ of mandamus, which contains, in substance, the following allegations:
Sometime prior to March 19, 1947 the Florida State Improvement Commission called for and received bids for the construction and installation of a central heating system for the Florida A. M. College at Tallahassee. The relator was the low bidder but the bid price was in excess of the Commission's estimate for the work and hence no bid was accepted. Subsequently, the Commission entered into negotiations with the relator for the latter to construct and install the heating system for a guaranteed upset price including a fixed fee for contractor's services, plus a bonus on savings effected in the execution of the contract. As the result of these negotiations a contract was finally executed between the parties whereby the relator agreed to provide all labor and materials and do all things necessary for the proper construction and completion of the work shown and described on certain drawings and specifications made a part of the contract. This contract contained the following provisions pertinent to this controversy:
"Article 4. Fee for Services
"In consideration of the performance of the Contract, the owner agrees to pay the contractor * * * as compensation for his services hereunder a fixed fee of * * $57,500. * * * The contractor * * * agrees that the total cost to the owner for the work as called for in the aforesaid plans and specifications shall not exceed * * * $400,000.00 including the fixed fee of * * * $57,500.00. * * *
"The contractor's fee for services, except the bonus fee hereinafter provided for, shall not exceed the total fixed fee above named, irrespective of the total cost of the work.
"Article 2. Changes in the Work
"The owner, through the Architect, may from time to time, by written instructions or drawings issued to the contractor, make changes in the above-named Drawings and Specifications, issue additional instructions, require additional work or direct the omission of work previously ordered, and the provisions of this contract shall apply to all such changes, modifications and additions with the same effect as if they were embodied in the original Drawings and Specifications.
"* * * In the event any additional work be required under this contract, the agreed price for the same, as reported by Change Orders issued, shall be added to the over-all estimated cost of $400,000 * * * In the event any work covered by this contract is, by agreement, omitted and Change Orders issued and accepted to that effect, the agreed value of said work shall be deducted from the said $400,000 estimated cost. Should the difference between the aggregate amount of all additions less the aggregate amount of all omissions * * * exceed $10,000 in agreed value, the fixed fee * * * [of $57,500.00] shall be increased proportionately on the ratio of $57,500 to $400,000.
"Article 16. Bonus Fees
"* * * The guaranteed over-all cost of the completed work covered by this contract * * * is $400,000.00. If through economies effected, or the reduction in cost of either labor or materials the said work is completed at a less figure than the guaranteed overall cost, the contractor shall be paid in addition to the * * * $57,500.00 fee * * * a bonus of 25% of the difference between the total actual cost and the guaranteed over-all cost. * * *"
The contractor entered upon the performance of the contract containing the provisions which we have quoted. From time to time during the period of construction the Commission, pursuant to Article 2 of the contract, made certain changes in the work, each of which was evidenced by a change order whereby the relator and the Commission agreed upon the price for all additional work and the value of all omissions and deductions; the total agreed price for additions amounting to $67,604.77 and the total agreed value of omissions and deductions being $4,640.59, leaving a difference of $62,964.18 between the aggregate amount of additions and deductions. Because of these additions and omissions the Commission agreed with relator, when changes were made, that the fixed fee of $57,500 provided by Article 4 of the contract would be increased by certain amounts and decreased by certain other amounts, based upon the agreed value of such omissions and deductions; the amounts of such increases and decreases being on the ratio of $57,500 to $400,000, as provided in Article 2 of the contract.
The guaranteed cost of the work called for by the written agreement was $400,000 and the agreed net price for all additional work called for by the change orders, after deducting the agreed value of all omissions and deductions, was $62,964.18, making a total of $462,964.18. The total certified and approved cost of material and labor furnished by relator was $340,542.45 and the fixed fee for the work called for by the written agreement, in the sum of $57,500 was increased by the agreed amount of $8,019, making a total of $65,519 total fee to which relator was entitled. Deducting the total actual cost of material, labor and fee in the sum of $406,061.45 ($340,542.45 plus the relator's fee of $6,519) from the total estimated cost of $462,964.18 ($400,000 plus net increase by change orders in the amount of $62,964.18) shows that the relator effected a saving of $56,902.73 in the execution of the work, upon which saving relator is entitled to a bonus of 25% as provided by Article 16 of the written agreement, or a bonus of $14,225.68.
Following completion of the work called for by the written agreement and the change orders the acting Chief Engineer of the Commission found and certified that relator was entitled to a payment of $43,724.54. Thereafter the Florida State Improvement Commission made requisition upon the Comptroller of the State for payment of the said sum to the relator. The Comptroller made payment to relator of the sum of $21,479.86 but declined to pay the balance of the $43,724.54, on the grounds: (1) that no fixed fee in excess of $57,500.00 could be lawfully paid because of the provision in Article 4 of the contract which read: "The Contractor's fee for services except the bonus fee hereinafter provided for, shall not exceed the total fixed fee above named [$57,500] irrespective of the total cost of the work;" (2) that no bonus fee could be lawfully paid on account of savings effected in executing the work, because, as shown by the statement of costs and expenditures submitted, the total cost of the work, including the fixed fee of $57,500, was $398,042.45 which cost was within $10,000 of the guaranteed cost of $400,000 and that by the terms of Article 16 of the contract a bonus fee could be earned by the contractor only in the event the guaranteed over-all cost, including the fixed fee, should be less than $390,000, as provided by Article 2 of the contract. Following the action of the Comptroller in refusing to honor the requisition of the Florida State Improvement Commission as to the item of $22,244.68 the Commission made a further requisition upon the Comptroller for the payment of this unpaid balance to the contractor and the Comptroller refused to issue a warrant for the payment thereof.
By section 1 of Chapter 23, 882, Laws of 1947, Sec. 282.24(1), Florida Statutes 1941, as amended, F.S.A., there was appropriated out of the general revenue certain moneys to be available to the Board of Commissioners of State Institutions for the purpose of providing the buildings and facilities therein described, including $429,000 for a central heating plant at Florida A. M. College, and by said section the Board was authorized and empowered to construct or to contract the construction in a manner deemed expedient and wise, of the buildings and facilities therein authorized and to do and perform all acts and things necessary thereto. By section 2 of Chapter 23, 882, F.S.A. § 282.25, an additional sum not to exceed $1,000,000 was appropriated out of the general revenue fund in order to permit the Board of Commissioners of State Institutions to provide moneys for the construction of utility extensions made necessary by the erection of any of the said buildings and to properly care for contingencies which might arise during the construction of said buildings and in securing equipment and furnishings for the same and to pay the necessary expenses incurred in connection with the building program authorized by the act.
For the purpose of providing the central heating plant for Florida A. M. College, the Board of Commissioners of State Institutions allocated and made available to the Florida State Improvement Commission the sum of $429,000 and thereafter allocated from the contingent fund provided by section 2 of Chapter 23,882 the further sum of $27,500 for a third boiler for the said central heating plant and directed the Florida State Improvement Commission to amend its contract with the relator to include the installation of such third boiler, making the total appropriations authorized for said project the sum of $456,500. Of the total appropriations made for said project, there will remain, after payment of the amount of $22,244.58 claimed by relator and certified by the Florida State Improvement Commission to be due him, an unexpended balance in excess of $25,000.
The question is whether the allegations of the alternative writ are sufficient as against the motion to quash filed by the respondent.
In our view, the allegations of the amended alternative writ make a prima facie case entitling the relator to payment of the claim and to require of the Comptroller an answer.
Under section 23 of Article IV of the State Constitution, F.S.A. the Comptroller is vested with power to examine, audit, adjust and settle accounts of all officers of the State. This section confers and imposes upon the Comptroller the right and duty to see to it that all disbursements of public moneys are authorized by a legal appropriation and that the payment of a particular item does not violate any positive provision of law expressly or impliedly prohibiting the payment of such item. But it does not vest the Comptroller with any supervisory authority to veto or disallow items of expenditure for which a lawful appropriation has been made by the legislature and the payment of which, as approved by the responsible officer or agency incurring the obligation under statutory power so to do, violates no provision of law. See State ex rel. W.R. Clark Printing Binding Co., Inc., v. Lee, 117 Fla. 779, 158 So. 461.
From the allegations of the writ it appears that appropriations for the work done by the relator were duly made by the legislature. These funds were allocated by the Board of Commissioners of State Institutions for the particular purposes covered by the contract, and the entire cost of the project, including the fees claimed by the relator, came well within the amounts allocated. The Florida State Improvement Commission, the responsible contracting authority, has approved the claim made by the relator as also the interpretation of the contract upon which he bottoms his demand for payment. According to the interpretation given the contract by the contracting parties, Article 4 thereof was intended to apply in the event the work was completed exactly in accordance with the original plans and specifications; the contractor to be limited to a fee of $57,500 for such work even though the cost of original construction might prove to be more than the estimated cost of $400,000. In the event of changes in the original plans and specification resulting in additions or omissions to the project, the aggregate amounts of additions less the aggregate value of omissions were to be added to the over-all estimated cost of the project. Should the difference between the aggregate amount of additions less the aggregate amount of omissions be $10,000 or less in value, the contractor would do the work necessary for installation or construction without any extra charge or fee; but in the event the difference amounted to more than $10,000 this stipulation for doing additional work would not be applicable but the fixed fee of $57,500 would be increased proportionately and be determined by the formula 57,500: 400,000:: x: y; x representing the amount of fixed fee plus increased fees and y representing the estimated basic cost of $400,000 plus the agreed value of additions to the project.
As to bonus fees to be allowed the contractor in the event he effected savings, it is plain from the allegations of the writ that the contracting parties understood that Article 16 of the contract dealing therewith, should be interpreted in the following manner: The contract contained a guarantee by the contractor to complete the original work called for by the plans and specifications at an estimated cost of not more than $400,000, including his fixed fee of $57,500 for executing that contract. In the event the contractor should be able to effect economies and savings resulting in the total over-all actual cost, including the fixed fee, being less than the $400,000 estimated cost, the contractor would become entitled to a bonus equal to 25% of the savings effected. Thus the State of Florida would benefit to the extent of 75% of all savings effected in carrying out the terms of the contract; for every four dollars saved the State by reason of actual costs being brought below estimated costs of the project the relator would be entitled to one dollar as an incentive for keeping the costs as low as possible.
We find nothing in the language of the contract to indicate that the contracting parties gave the contract a strained construction, or interpreted it in a manner not consistent with its terms; nor do we find anything in the contract or any applicable statutes pertinent thereto indicating that the interpretation given the contract was contrary to public policy.
We conclude, therefore, that upon this prima facie showing the burden is upon the Comptroller to justify his refusal to act by alleging and proving in avoidance of the command of the writ, that after the Comptroller had examined and audited the account just cause for refusing payment thereof had been found and determined by the Comptroller to exist as a lawful basis for his refusal to act; and that unless the Comptroller can meet such burden the relator will be entitled to recover.
The motion to quash the amended alternative writ is denied, with leave to the respondent to answer within ten days, in default of which a peremptory writ will stand awarded.
It is so ordered.
ADAMS, C.J., and CHAPMAN and HOBSON, JJ., concur.