P&L HW 10 - 11/01/07 CEE 4804 Case 10: Manganaro...

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11/01/07 CEE 4804 Case 10 : Overview: William A. Berry & Son, Inc. acted as the construction manager for a building on BWH’s hospital campus. Berry was contracted to work for a guaranteed maximum price. Berry is paid a fixed fee for their work. Campot was the Chief Operating Officer of Berry and Donovan was Berry's Project Manager for the CWN Project. Bassi was Berry's field engineer for the CWN Project and Rowntree was Berry's Chief Estimator supervising Howley who was Berry's estimator for the CWN Project. Crawford is MCNE's construction manager and Manganaro was the principal and Chief Executive Officer of MCNE. Manganaro negotiated MCNE's deals with owners, construction managers and general contractors. Serrano was a college trained civil engineer who also acted as a construction manager for MCNE. Berry had never awarded a subcontract to MCNE even though MCNE was an experienced subcontractor which had been in business for many years. MCNE’s reputation was not very good according to responsible officials at Berry who had worked with MCNE on other projects. The Guaranteed Maximum Price Contract between Berry and BWH required Berry to use a specific form for its subcontracts. This form subcontract included general and supplementary conditions, which became part of the contract specifications which were supplied to any potential subcontractor for the drywall subcontract. Each potential bidder on a subcontract is required to supply a copy of the general and supplementary conditions to any of its subcontractors that it intends to utilize on the job to complete the work. Berry stated that any subcontract which exceeded $50,000, only Campot could award the contract. After going through an extensive process the result is then turned over to Campot for his final review. Campot's objectives are to get the best possible price from a subcontractor able to perform high quality work, and who is financially able to show the stability necessary to obtain required bonding and insurance coverage. Donovan was assigned by Campot to review all the quotes from the subcontractors with him to make a final decision for the CWN Project. In short, the contract between Berry and BWH required that all CWN subcontractors were to be pre-approved by BWH before any contract was executed. Berry's chief estimator, Rowntree was the responsible Berry official for estimating the drywall contract. Rowntree provided BWH with a list of subcontractors who should be invited to bid the drywall contract. Rowntree was considering 12 subcontractors whom he concluded had the bonding capacity, the manpower, and the ability to do the work. Rowntree invited four of the contractors to submit proposals on the CWN Project: C.H. Sweeney & Sons, T.J. McCartney, Inc., Pelletier & Sons, and Save-On- Walls, Inc. The CWN Project was not advertised and there was no public invitation or notice to bid. Berry utilized the services of B.L. Makepeace, an engineering firm, to provide the
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P&L HW 10 - 11/01/07 CEE 4804 Case 10: Manganaro...

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