Invoice for WTC-ARD contract services, Aug 2004

NYC 9/11 Public Portal Document

• Commisioner Christopher O. Ward August 9, 2004 Page 5

Work in the Contract. Indeed, there would have been no reason to negotiate a unit price for this work in Change Order No. 3 unless the DEP intended to pay Termon for this work. We believe, therefore, that this is additional work which Termon is entitled to be compensated.

6. Additional Insurance Premium

The premium for the insurance policies required under the Contract was based on both the duration of the project and on the Contract's estimated price. The estimated length of the Contract, as provided by the DEP, was 730 days. The Contract's amount, based on the estimated units provided by the DEP was $4,199,499.40. As a result, the premiums for these policies totaled $170,338.66, which was a fixed rate based on the information provided by the DEP. This constitutes a rate of approximately 4.06% of the Contract amount.

However, the DEP materially reduced the amount of work that was assigned under the Contract and ended it prematurely on June 1, 2003, resulting in approved billings to-date of only $2,1.38,005.65. This reduction, therefore, increases Termon's effective insurance premium rate to 7.97% of the actual Contract amount, almost twice what was anticipated. This additional cost was not expected by Termon at the time it entered into the Contract and resulted in a material increase in its costs for performing work under the Contract. Termon, therefore, believes that it is entitled to be compensated for the additional premium costs that it was forced to absorb.

The difference between the estimated billings ($4,199,499.40) and the actual billings ($2,138,005.65) totals $2,061,493.75. If the anticipated insurance premium rate of 4.06% is applied to this differential, it results in additional insurance premiums, which Termon has been unable to recoup because of the reduction in work, of $83,696.65. Termon believes that it is entitled to be compensated in this amount.

7. Removal and Disposal of Wall-to-Wall Carpeting--$27,200.00

Scope of Work A in the Contract provides that carpeting in the residential apartments will be cleaned. (Scope of Work A, ¶3,.e) Separately, Scope of Work A states that "certain furnishings" may be tagged by the owners for disposal. (Scope of Work A, ¶10) While this latter provision does mention "carpets", it continues by stating that the "residents' personal property" shall not be disposed of without their authorization. The import of this section is that the furnishings that may be tagged for disposal would be the ■ resident's furnishings which constitute personal property. That indicates that any carpeting, to be personal property, would be items such as area rugs and the like. Termon, however, was ordered to remove wall-to-wall carpeting which was affixed to the apartments, including the padding and tacking, which is not the personal property of the residents.

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