Construction company gets $14M for handling blast rock not specified in the contract for Hwy. 69 expansion

The contract with the Ministry of Transportation called for 11.2 kilometres of Highway 69 to be expanded to four lanes. (File)

A construction company contracted to expand Highway 69 near Sudbury is entitled to $14 million in compensation for design issues that resulted in a massive amount of surplus rock being blasted as part of the four-laning project.

A Superior Court justice upheld a previous decision that said Bot Construction was entitled to be compensated for having to deal with 80,000 cubic metres of excess rock as it worked to expand 11.2 kilometres of the highway between Sudbury and Toronto.

The original contract estimated that only 4,445 cubic metres of excess rock would be produced.

The original $54,795,000 contract with the Ministry of Transportation required Bot construction to blast about one million cubic metres of rock, which would be used for embankments and other elements of the road expansion.

While lawyers for the MTO argued that the excess rock was the result of a subcontractor for Bot blasting too deeply, the arbitrator in the case ruled the original contract incorrectly estimated how much blast rock would be generated as work progressed.

The dispute centres on a contract Bot and the MTO signed in July 2012. The project was expected to be what’s known as a ‘balanced job,’ where the amount of blast rock produced roughly equals the amount needed for road construction.

“As it happened, in the end, this was not a balanced job,” said the court decision in the case.

As the work progressed, far more excess rock was being produced than expected and it became increasingly expensive for Bot to handle and move around from site to site.

“The (MTO) did not acknowledge there was excess rock, even at a point when it was estimated to be as much as 75,000 cubic metres,” the court documents said.

“As the work progressed, it was apparent that there was excess rock in large quantities with nowhere to put the rock.”

As the pile of excess rock began to get out of hand, “Bot began thinking there was a design flaw which accounted for what it believed was unanticipated excess rock.”

In December 2014, Bot received permission to dump the rock at two interchanges of the highway, but this was much later after the company incurred significant costs dealing with the rock.

While MTO insisted Bot deal with the rock at its own expense, the company eventually appealed to an arbitrator. Despite MTO saying it had drilled too deeply, the arbitrator ruled that Bot’s contractor “drilled the absolute minimum required.”

The arbitrator also ruled that the excess rock calculations in the original contract didn’t properly estimate the amount of leftover rock that would be created and, as a result, there were no provisions for where the extra rock would be stored.

Because the excess rock was not part of the original contract, “he concluded that MTO was responsible for any additional cost of removal, management, and disposition of the excess rock.”

While there was an error in the calculations of how much rock – 80,000 instead of 118,000 cubic metres -- was produced, the appeals court said that didn’t matter, since the $14 million was based on actual costs incurred and not the amount of rock.

“The arbitrator’s fundamental factual finding was that the excess rock was unanticipated and could not have been reasonably foreseen at the time of tendering,” the appeals court said.

“The arbitrator, therefore, began by considering if the contract documents addressed the issue of the unanticipated excess rock. He found that the rock specs did not address rock at the level of the excess rock.”

Since it was not part of the original contract specifications, it was effectively an add-on and therefore, the MTO was responsible for the additional costs.

See the full decision here.