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Jim Psenak Construction v. State11/16/2005
6.30.687 (Misrepresentations and fraudulent claims) to forfeit all claims Psenak has relating to the contract.
II. Facts and Proceedings
On March 3, 1998, the State sent out an invitation to bid on a construction project named the North Jones Mine Reclamation Phase III. Psenak bid on the project and was awarded the bid on April 27, 1998.
The construction began by June 18, 1998, and continued with various equipment for over two months before Psenak or the State's representatives understood there was a problem with the way Psenak was proceeding with the work. Sometime in August 1998 Psenak realized that his construction plan was not producing the required design elevations. As soon as Psenak discovered the discrepancy between the slopes he was producing and those dictated by the design elevations, he brought the problem to the attention of the project engineer in late August or early September 1998 who told him to "cut to finish design elevations."
Thereafter, Psenak began recutting the slopes in the excavation portion of the project to meet the design elevations, rather than observing his previous construction plan. Psenak kept no records of the slopes that were recut, the personnel employed to perform the recut, the equipment that was dedicated to the recut, or any other costs related to the accomplishment of the recut.
Sometime in or around September 1999, and after a request from the State for volume calculations, Psenak instructed Eric Simons to accumulate quantities in his volume calculations that Psenak used as a basis for compensation. Psenak never informed Simons of provisions in the contract that were inconsistent with the accumulation, i.e. adding together, of interim survey quantities. Simons subsequently, through his employer Alaska Rim Engineering, submitted to the State volume calculations that were calculated by adding an interim survey calculation from December 1998 by Slana Surveys and Simons' calculation determining the excavation accomplished between the December 1998 survey and the August 1999 survey.
Psenak, sometime in or around September 1999, then had these accumulated quantities submitted to the State in a form that would conceal the nature of the quantities and the manner of their calculation. By these actions Psenak intended to and did secure overpayments for quantities of excavation in excess of those for which Psenak was entitled to payment. Such accumulated calculations were submitted to the State without being represented as accumulated quantities on at least three occasions.
In January of 2000 the State advised Psenak it was surprised at the final quantity of excavation Psenak reported and that it intended to have an "independent third party" perform new calculations to check Psenak's final numbers. The State was unable to secure Psenak's agreement to have USKH, another engineering firm, act as an independent surveyor, but still hired USKH to recalculate the quantities produced by Psenak in accordance with the provision on quantity measurement in the contract. Based on USKH's calculations, Psenak was overpaid at least $182,806.00 for 179,222 cubic meters of excavation, which sum was not earned under the terms of the contract.
After some correspondence between the parties, the State finally terminated the contract under Section 108-1.08 of the Standard Specifications for default on August 11, 2000, citing Psenak's failure to return the overpayments made, and Psenak's failure to submit a plan to complete the unfinished work as demanded by the State in a letter dated July 12, 2000. The State, in order to complete the project left unfinished by Psenak, put the remainder of the work out
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