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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Quality Asphalt Paving, Inc. v. State, Dept. of Transportation and Public Facilities (6/13/2003) sp-5702

Quality Asphalt Paving, Inc. v. State, Dept. of Transportation and Public Facilities (6/13/2003) sp-5702

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA
                                

QUALITY ASPHALT PAVING,  )
INC.,  an  Alaska corporation,       )    Supreme Court  Nos.  S-
10154/10183
                              )
     Appellant/Cross-Appellee,     )    Superior Court No. 3AN-98-
7680 CI
                              )
     v.                       )    O P I N I O N
                              )
STATE OF ALASKA, DEPART- )    [No. 5702 - June 13, 2003]
MENT OF TRANSPORTATION   )
AND PUBLIC FACILITIES,        )
                              )
     Appellee/Cross-Appellant.     )
________________________________)


          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Eric T. Sanders, Judge.

          Appearances:  Sam E. Baker, Jr., and  William
          K.  Renno,  Oles, Morrison, Rinker  &  Baker,
          LLP, and David J. Schmid and Eric R. Cossman,
          Law  Offices  of David J. Schmid,  Anchorage,
          for  Appellant/Cross-Appellee.  Paul R.  Lyle
          and  E. John Athens, Jr., Assistant Attorneys
          General,  Fairbanks, and  Bruce  M.  Botelho,
          Attorney General, Juneau, for Appellee/Cross-
          Appellant.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          EASTAUGH, Justice.


I.        INTRODUCTION

           We  consider in these cross-appeals whether a  hearing

officer  erred  in  awarding costs and  prejudgment  interest  to

Quality  Asphalt Paving, Inc. after the State of Alaska exercised

the  termination-for-convenience clause in Quality's public works

contract.  Both parties dispute the award and advance conflicting

interpretations  of the contract.  We conclude  that  substantial

evidence  supports the cost awards and that the  hearing  officer

did  not  misinterpret  the contract, but that  Quality  was  not

entitled  to  prejudgment  interest.  We  therefore  affirm   the

superior court's appellate decision which  upheld the cost awards

but vacated the prejudgment interest award.

II.  FACTS AND PROCEEDINGS

           These  appeals concern a highway construction contract

for the Chena Hot Springs Road widening project that the State of

Alaska,   Department  of  Transportation  (DOT)  terminated   for

convenience  shortly  after  awarding  the  contract  to  Quality

Asphalt Paving, Inc. (Quality).1

           Quality  successfully bid on the project on April  30,

1996.   The state issued Quality a letter of intent to award  the

contract  on  May 2.  On May 17 the state authorized  Quality  to

proceed  with work on the $10.76 million contract.  Although  the

parties dispute the exact date, as of late May or early June both

parties  believed  a  buried utility cable  conflicted  with  the

project  plans.   Quality  advised the state  that  delaying  the

project  would  cost about $30,000 per day.   After  the  parties

failed  to  resolve  the  problem, the state  on  June  19,  1996

terminated  the  contract  under the  termination-for-convenience

clause,  which  allows DOT to end a contract "whenever,  for  any

reason,  the  Contracting  Officer  shall  determine  that   such

termination  is in the best interest of the Department."   As  it

turned out, the parties discovered on June 20 that there were  no

conflicting buried utilities cables, but by then the contract had

been terminated and Quality had begun notifying its suppliers and

subcontractors.

          On September 10, as provided for in the termination-for-

convenience  clause, Quality submitted to the state a  claim  for

damages  and costs Quality claimed the termination caused Quality

to  incur.   Quality alleged that the state owed  it  $4,577,215.

The  state  conducted an audit of Quality's claim.   The  state's

audit,  completed  in February 1997, recommended  paying  Quality

$10,358.   The state and Quality could not reach agreement  after

the   audit.   They  continued  to  disagree  about  claims   for

mobilization   costs,   demobilization  costs,   standby   costs,

overhead, and prejudgment interest.  We discuss in Part  III  the

facts relevant to the appellate disputes.

           DOT's  contracting officer issued a  decision  on  the

termination   claim  in  August  1997.   Quality   appealed   the

contracting officer's decision to DOT's commissioner in September

1997.

           The commissioner appointed as hearing officer Leroy J.

Barker,  an  attorney with substantial experience in  commercial,

contract,  and construction litigation who had previously  served

as a hearing officer for the State of Alaska and the Municipality

of  Anchorage  in  construction disputes.  The hearing  officer's

June 30, 1998 decision recommended awarding Quality $1,945,857.79

plus  prejudgment interest.  The commissioner adopted the hearing

officer's decision in July 1998.

           Quality  appealed the commissioner's decision  to  the

superior  court,  which issued a decision in January  2001.   The

state  cross-appealed  aspects  of  the  agency  decision.    The

superior  court vacated Quality's prejudgment interest award  but

affirmed  the  commissioner's decision  in  all  other  respects.

Quality  then  filed a petition for a rehearing on the  issue  of

prejudgment interest.  The superior court denied the petition.

           Quality appeals the superior court's decision vacating

the  prejudgment interest award, and both Quality and  the  state

appeal the award or denial of specific claim items.

III. DISCUSSION
            The   contract's  termination-for-convenience  clause
allowed  DOT  to terminate "[t]he performance of work  under  the
contract . . . in whole or in part, whenever, for any reason  the
Contracting Officer shall determine that such termination  is  in
the  best  interest of the Department."  Once the state serves  a
notice  of  termination, this clause requires the  contractor  to
stop  all work, place no further orders for materials, and cancel
all existing orders, among other things.
           The  clause  permits the contractor to pursue  certain
claims  due  to  the state's termination of the  contract.   This
provision  explains  that "payment for partially  completed  work
will  be  made  either at agreed prices or by time and  materials
methods  as  described" elsewhere in the contract.  Additionally,
the contractor must:
          submit to the Contracting Officer, his  claim
          for   additional  damages   or   costs   [not
          otherwise  covered].  Such claim may  include
          such  cost items as reasonable idle equipment
          time,   mobilization  efforts,  bidding   and
          project    investigative   costs,    overhead
          expenses  directly allocable to  the  project
          termination and not covered under  work  paid
          for  . . . .  The intent of negotiating  this
          claim would be an equitable settlement figure
          to be reached with the Contractor.
          
The  appeal  and cross-appeal concern the cost and  damage  items

Quality may recover under the termination-for-convenience clause.

       A.     It   Was  Not  Error  To  Deny  Quality  Additional
Compensation for         Mobilization and Demobilization.

            Quality  claimed  $767,067  of  the  $1  million  its

successful  bid  specified  for mobilization  and  demobilization

costs.   The hearing officer awarded Quality a total of  $449,621

for  this  item.   "Mobilization"  covers  preparatory  work  and

operations,  including  movement  of  personnel,  equipment,  and

supplies  to  the  job site.  "Demobilization" covers  equivalent

activities  upon completion of the project.  The termination-for-

convenience  clause  allows recovery for "mobilization  efforts."

Although  Quality's  project  bid  included  an  amount  for  the

"mobilization  and  demobilization"  item,  it  is  the  standard

practice  of  the  industry - and of Quality  -  to  charge  only

mobilization  costs  to  a project, and to charge  demobilization

costs   as   part   of   mobilization  for  the   next   project.

Consequently,  Quality's arguments on this issue, while  directed

at  the "mobilization and demobilization" award, deal principally

with mobilization costs.

          1.   The mobilization and demobilization award

           Quality  advances alternative theories supporting  its

claim  for  an  increase  in  its  award  for  mobilization   and

demobilization costs.  Quality first argues that as a  matter  of

contract  interpretation, it is entitled to recover  $767,067  of

the   $1   million   its  bid  allocated  for  mobilization   and

demobilization  costs  because it was an  "agreed  price."2   The

state responds that the hearing officer did not err by basing the

award on costs incurred rather than Quality's bid price.

           We substitute our own judgment on questions pertaining

to contract interpretation.3

          The contract specifies that

          [T]he Contractor, for and in consideration of
          the  payment or payments herein specified and
          agreed to by the Department, hereby covenants
          and  agrees  to furnish and deliver  all  the
          materials and to do and perform all the  work
          and  labor  required in the  construction  of
          project Chena Hot Springs Road Widening.
          
(Emphasis  added.)  Quality argues that "agreed to" is  eqivalent

to   an   "agreed  price."   The  hearing  officer   ruled   that

"[m]obilization was not an `agreed price' since it was not agreed

to  by  the  parties."  We agree with the hearing  officer.   The

contract term that Quality relies on cannot be read in isolation.

The  second clause clearly links "payments . . . agreed to"  with

"[Contractor] hereby covenants and agrees to furnish and  deliver

all the materials and to do and perform all the work."  (Emphasis

added.)   But Quality did not deliver all the materials,  and  it

did  not perform all the work.  It was therefore permissible  for

the  hearing  officer to base Quality's award on  costs  incurred

rather than the "agreed price" for complete performance.4

           Quality  alternatively argues  that  even  if  it  was

correct  to base compensation on the costs it actually  incurred,

"the  uncontroverted  evidence  demonstrates  that  Quality   was

entitled  to a higher award."  Quality contends that the  hearing

officer's  reliance  on  the  state  audit  report  to  determine

mobilization  and  demobilization  costs  was  not  supported  by

substantial evidence, and that the state's expert testified to  a

much higher amount.  The state responds that the "hearing officer

was   not   required   to  accept  either  party's   figure   for

mobilization.  . . .  [T]he hearing officer was  free  to  choose

among actual cost data, accounting records, estimates by law  and

expert   witnesses,  and  calculations  from  similar  projects."

(Quotations omitted.)

           We review the hearing officer's findings of fact under

the substantial evidence test.5

          The hearing officer ruled that

          The  State's  expert testified that  $127,000

          would  be  a  reasonable sum for mobilization

          and  demobilization costs. . . . By contrast,

          [Quality] was claiming $767,067. . . .  [T]he

          most  reasonable  figure .  .  .  is  in  the

          State's  Special Audit Report.  I am adopting

          that   amount  ($287,708,  plus  profit   and

          overhead), subject to one modification.  I am

          persuaded by the evidence that the barging of

          equipment  .  .  .  was  triggered   by   the

          contractor's  anticipation of  being  awarded

          this  contract. . . .  Therefore, I find that

          the  amount the contractor is entitled to for

          mobilization and demobilization is the sum of

          $449,621.

           Quality  argues that testimony by the state's  expert,

Ronald  Maus,  conflicts with the state  audit  report.   Quality

argues  that Maus's "reasonable person approach" - which  returns

to  the contractor the costs of its performance - results  in  an

award  several hundred thousand dollars greater than the  hearing

officer's   award.   But  Quality's  argument  simply   advocates

substituting  Maus's award figure for the hearing  officer's;  it

does  not  demonstrate  that the hearing officer's  approach  was

unsupported  by substantial evidence.  Indeed, there are  several

methods  for calculating mobilization expenses.  Maus's  approach

is  one;  the  hearing  officer relied on another.   The  hearing

officer  used  his  own reasonable judgment and  determined  that

figures  from  the state's special audit report best  compensated

Quality for mobilization and demobilization.

           Quality  describes  Maus's approach  in  detail.   But

demonstrating   that  an  alternative  method   for   calculating

mobilization  costs is valid does not establish that  substantial

evidence  fails  to  support the hearing  officer's  award.   The

hearing officer was presented with a "variety of figures on  this

matter."   He  adopted  the  state's audit  figure,  but  allowed

additional   barging  costs,  which  were   "triggered   by   the

contractor's anticipation of being awarded this contract."6   The

hearing  officer  permissibly based  Quality's  award  on  expert

testimony, supporting evidence provided by the audit report,  and

the  hearing  officer's own expertise.  We  therefore  hold  that

substantial  evidence supports the hearing officer's mobilization

award.

          2.   Quality's separate demobilization theory

            Despite   Quality's  standard  practice  of  charging

demobilization costs for one job to its next job as  mobilization

costs,7  Quality  argues  that in this  case  it  should  receive

$161,581  (before  markups)  for  demobilization  as  part  of  a

$767,067   award  for  mobilization  and  demobilization   costs.

Quality  claims  that its normal policy regarding  demobilization

was  inapplicable  to the Chena project because  the  termination

left  Quality  without a new job to which to charge  $166,027  in

demobilization  costs.  The state responds  that  "it  is  beyond

dispute that: (1) [Quality] charges demobilization costs from one

project  as  a  mobilization cost to its next  project,  and  (2)

[Quality]  did not follow this policy in preparing its claim  for

the  Chena project."  The state further argues that federal  cost

accounting  principles support the hearing officer's  application

of Quality's stated demobilization policy.8

           The  hearing  officer relied on  the  state  auditor's

report,   which  states  that  it  "is  common  in  the   highway

construction industry" to charge "[d]emobilization costs . . . as

mobilization  costs  of  the  next  project."   This  finding  is

consistent  with  Quality's stated policy  about  how  it  treats

demobilization  costs.  Although the termination was  unexpected,

it  was a foreseeable possibility when Quality bid on the state's

project.  Quality had an opportunity when it submitted its bid to

make  allowance for the risk that the state would  terminate  the

project, and the consequences to Quality.

           We  hold that the industry standard and Quality's  own

policy  regarding  demobilization  costs  constitute  substantial

evidence  supporting  the  hearing  officer's  decision  to  deny

Quality additional demobilization costs.

      B.   Quality Is Not Entitled to Additional Compensation for

Equipment           Standby.

          The termination-for-convenience clause allowed recovery

for "reasonable idle equipment time," which covers periods during

which equipment was idled for reasons other than mobilization  or

demobilization efforts.  The hearing officer determined that this

period  began May 17, 1996 and ended August 17, 1996, and awarded

Quality $901,305.50 for this item.  Quality argues that it should

recover  for equipment standby beginning May 3 and ending October

31; it sought $1,182,000 for this item.  The state's cross-appeal

argues  that  the recovery period should be limited  to  June  19

through July 31.

          1.   Equipment standby between May 3 and May 17, 1996

          Quality argues that it was entitled to compensation for

equipment  standby during the period between its receipt  of  the

state's  notice of intent on May 3 and its receipt of the  notice

to  proceed  on  May 17.  Quality claims that the contract  terms

allowed  recovery  for standby once the state accepted  Quality's

bid  and  issued  a notice to proceed.  The state  responds  that

Quality would only be entitled to compensation for standby if the

state  "took  some  action that subsequently  forced  [Quality's]

equipment  to be idle."  The state further argues that the  terms

of the contract do not support Quality's claim.

           The  state's intent to award letter of May 2, 1996  to

Quality stated in part:

          The    transmittal    of   these    documents

          constitutes  only  an  intent  to  award.   A

          Contract  will  not be in force  until  these

          documents   are   fully   executed   by   the

          Department  and a Letter of Award and  Notice

          to  Proceed are issued.  You are advised that

          work prior to that Notice is unauthorized and

          the  State will assume no responsibility  for

          the  work, the work site or any event arising

          therefrom.

           The hearing officer determined that the state's notice

of  intent to award was not sufficient to grant Quality  recovery

of  standby costs before the state issued the notice to  proceed.

Quality argues that the notice of intent to award did not  define

the  parties'  rights "once [the] notice to proceed [was]  issued

and  a  contract  [was] in force."  Quality  argues  that,  taken

together,   101-1.34-.35  and 108-1.02  of  the  contract  permit

recovery  for  work before the effective date of  the  notice  to

proceed.9

          We hold that the hearing officer did not err in denying

Quality compensation for standby from May 3 to May 17.10  Section

108-1.02  states that "[c]ommencement of work by  the  Contractor

prior  to the effective date of the Notice to Proceed constitutes

a  waiver of this notice and will begin contract time."   Quality

argues that this provision "make[s] clear that the contractor may

properly  commence certain types of work prior to the  notice  to

proceed."   But Quality incorrectly reads  108-1.02 in  isolation

from  other  portions of the contract.  Section 101-1.17  defines

"contract  time"  as  "[t]he  time allowed  under  the  contract,

including authorized time extensions, for the completion  of  all

work  by  the Contractor."  The purpose of  108-1.02  is  not  to

allow  a  contractor compensation for starting early, as  Quality

argues,  but  rather to prevent a contractor  from  altering  the

"calendar  days"  or "completion date" of a project  and  thereby

avoid liquidated damages.11

           Moreover,  101-1.71 defines "work" as "the act of, and

the  result of, performing services, furnishing labor, furnishing

and  incorporating materials and equipment into the  project  and

performing  all  other  duties and obligations  required  by  the

contract."   Quality  did  not  perform  "work"  by  letting  its

equipment sit idle from May 3 to May 17.  It completed no  "work"

as  defined  by  101-1.71 of the contract until May  17  when  it

received  the  state's notice to proceed.  Perhaps  circumstances

could  arise  in which action by the state would  result  in  the

idling  of a contractor's equipment after it had started  "work,"

but  that was not the case here.  Any claim for compensation  for

Quality's  preparation before May 17 was properly categorized  by

the hearing officer as a claim for mobilization costs.

           Because the state's letter of intent to award did  not

conflict with the contract's provisions, the hearing officer  did

not  err  in  determining  that the letter  of  intent  to  award

"relieve[d]  the State of any responsibility for  idle  equipment

costs incurred between May 2 . . . and May 17."

          2.   Equipment standby after August 17, 1996

           The  hearing  officer determined  that  Quality  could

recover  for  equipment  standby only through  August  17,  1996.

Quality  argues  that  the  hearing officer's  decision  was  not

supported by substantial evidence and instead claims that  it  is

entitled to recovery through October 31.12  It argues that "[t]he

Hearing  Officer  relied  on  one sentence  from  a  letter  from

[Quality's]  president to three legislators,  dated  October  13,

1997, . . . which stated that [Quality] `had gone back to work in

full  force by mid-August [1996].' "  Quality alleges  that  "the

undisputed  evidence presented at trial . .  .  established  that

many  items  of equipment that had been dedicated to the  project

remained idle after August 17, 1996."

           The  state responds that substantial evidence supports

the  hearing  officer's finding regarding the standby termination

date.   The  state argues that the letter was only one  piece  of

evidence the hearing officer examined in determining that  August

17,  1996 was the appropriate date to terminate standby expenses.

The state argues that Quality president, Gordon Hayes, "confirmed

[the hearing officer's] interpretation of [Hayes's letter] at the

administrative hearing during cross-examination."

           The  hearing officer's decision stated that  it  "used

August 17, 1996 as the date the dedicated equipment period should

terminate. . . .  [This date] is based on [Quality]'s October 13,

1997  letter [stating Quality was able to go back to work in full

force by mid-August]."

           But  contrary to Quality's assertion on appeal,  other

evidence  supported the decision.  Before issuing the  June  1998

proposed  decision, the hearing officer heard  testimony  in  May

1998 by Gordon Hayes.  At the May 1998 hearing Hayes acknowledged

the contents of his October 1997 letter:

          Q.        Isn't it true that by mid August of
          1996, you were back to work in full force?
          
          [Hayes].   I  think  closer  to  the  end  of
          August.
          
          Q.         Would you turn to Exhibit 337  for
          me,  please.  This is a letter that you  sent
          to the -- to some of your legislators?
          
          [Hayes].  Yes.
          
          Q.         Isn't  it  true that in  the  last
          sentence of the first full paragraph of  that
          letter,  you told your legislators  that  you
          were able to go back to work in full force by
          mid August?
          
          [Hayes].  Okay. Yes.
          
          The hearing officer also used Blue Book daily equipment

rates in calculating the days Quality's equipment was on standby.

He  explained that the standby calculation consisted of  counting

the  work  days  on  which  Quality employed  specific  items  of

equipment for the Chena project and applying the appropriate Blue

Book  rate.   Quality  asserts that  the  hearing  officer  erred

because  he did not fully compensate Quality for "some  equipment

[that]  remained  unassigned months  past  August  17."   Quality

incorrectly   equates  "idle"  time  with  recoverable   expense.

Although the state was obliged to compensate Quality for  standby

costs due to the state's termination of the contract, it was  not

Quality's  insurer for equipment that remained idle after  August

17.

           We hold that substantial evidence supports the hearing

officer's  decision  to deny Quality standby  compensation  after

August 17.

          3.   Awarding "idle equipment time" at Blue Book rental

rates

           The  state argues in its cross-appeal that the hearing

officer erred in awarding idle equipment time to Quality at  Blue

Book13  rental rates.14  The state argues that  108-1.09  of  the

contract "expressly prohibits the use of `published rental rates'

in  calculating  equipment costs for claims."  The  state  claims

that  the contract instead required Quality to be reimbursed  for

actual   costs.   Quality  responds  that  the  hearing   officer

permissibly  used  Blue  Book rates and  that  his  findings  are

supported by substantial evidence.

           Paragraph five of  108-1.09 describes claims following

a termination for convenience:

          After receipt of a Notice of Termination, the
          Contractor  shall submit to  the  Contracting
          Officer, his claim for additional damages  or
          costs not covered above or elsewhere in these
          specifications.  Such claim may include  such
          cost items as reasonable idle equipment time,
          mobilization  efforts,  bidding  and  project
          investigative   costs,   overhead    expenses
          directly allocable to the project termination
          and not covered under work paid for at agreed
          unit prices or contract bid prices, legal and
          accounting   charges   and   other   expenses
          reasonably  necessary in  claim  preparation,
          subcontractor costs not otherwise  paid  for,
          actual idle labor costs if work is stopped in
          advance   of   termination  date,  guaranteed
          payments  for private land usage as  part  of
          the original contract, and any other costs or
          damage  items for which the Contractor  feels
          reimbursement should be made.  The intent  of
          negotiating this claim would be an  equitable
          settlement  figure  to be  reached  with  the
          Contractor.  In no event, however, will  loss
          of  anticipated profits be considered as part
          of any settlement.
          
           The  state  argues that the hearing officer  erred  in

concluding that he could award idle equipment time at  Blue  Book

rates  under paragraph five of  108-1.09.  The state argues  that

"the  word  `reasonable' modifies the word `time' in [the  second

sentence],  and  not  the  word  `cost,'  "  and  therefore  that

paragraph five "requires the rate for idle equipment to be  based

on  actual  costs."   But  the  state's  narrow  construction  is

defeated  by  the next-to-last sentence of paragraph five,  which

states that "[t]he intent of negotiating this claim would  be  an

equitable  settlement figure to be reached with the  Contractor."

The  provisions  of  108-1.09 taken together  do  not  imply  the

narrow  construction  urged by the state.  Rather,  they  suggest

that  the hearing officer has broad authority under  108-1.09  to

reach an equitable award.

           The  state  also  argues that  the  contract  controls

reimbursement  for  idle  equipment time  and  that  the  hearing

officer  had no authority under the termination clause  of   108-

1.09  to substitute his judgment and base the award on Blue  Book

rates  rather than actual costs.  We disagree.  Section  108-1.09

states  in part that the "intent of negotiating [a] claim [is  to

reach] an equitable settlement figure . . . with the Contractor."

The state drafted this standard form contract.  We will not defer

to  the state's narrow interpretation of a term that indicates on

its face an alternative and reasonable interpretation.15

           The  state  cites  our decision  in  Southeast  Alaska

Construction Co. (SEACO) v. State16 to support its argument  that

the  hearing officer impermissibly applied the Blue Book rate  in

determining  Quality's  idle  equipment  claim.   In  SEACO   the

superior  court  concluded that recovery was  limited  to  actual

equipment  rates  even though a contract term  plausibly  allowed

recovery  at  Blue  Book rates.17  On review we  held  that  "the

superior  court did not err in refusing to compensate  SEACO  for

the use of extra equipment at Blue Book rental rates."18  But  we

did  not  hold that it would have been error to apply  Blue  Book

rates.   We  simply held there that the contract did  not  compel

that result.

              Similarly, the hearing officer in this case was not

compelled  to use the Blue Book rates.  But he was not  forbidden

to  use them, either.  The hearing officer based his decision  to

employ  Blue  Book  rates on a number of  relevant  reasons.   He

stated  that  "from the testimony and my own  experience  .  .  .

contractors,  generally,  do not keep  equipment  costs  for  the

purposes  of  developing claims."  He also  pointed  out  that  a

"difficulty in not using Blue Book rates is that contractors with

different  accounting systems would be treated differently."   He

also explained that industry custom routinely permits the use  of

rates such as those found in the Blue Book.19

           It  is  this  type of expertise to which we  defer  in

reviewing  a  decision under the substantial  evidence  standard.

Because  the  hearing  officer's decision does  not  rely  on  an

improper interpretation of the contract, and because his decision

relied on substantial evidence, we hold that it was not error  to

use Blue Book rates in determining Quality's standby costs.20

            4.     The  "dedicated  equipment"  theory  for  idle

equipment

           The  hearing officer awarded Quality compensation  for

idle  equipment time from May 17, 1996 through August  17,  1996.

The  state  contends  in its cross-appeal that  this  was  error,

because "post-termination idle equipment time is limited  to  the

reasonable  time  it  should take the contractor  to  remove  its

equipment  from  the  project  site."   The  state  argues   that

Quality's  recovery for idle equipment should not be based  on  a

"dedicated  equipment" theory, but instead should be  limited  to

compensating  Quality  for  its  idle  equipment  time  from  the

termination  of  the  contract on June 19  until  July  31,  when

Quality removed its equipment from the job site.

           Quality  responds  that it should  be  reimbursed  for

reasonable idle equipment time as provided in the termination-for-

convenience clause of the contract.

           Section  108-1.09 of the contract permits an award  of

costs  for "reasonable idle equipment time."  The hearing officer

correctly  realized that "a contractor must `dedicate'  equipment

to  a project once it is awarded the contract."  Contractors must

be   assured  that  they  may  maintain  some  level  of  minimal

readiness,  otherwise  they would be reluctant  to  dedicate  any

equipment  to  a job site in preparation for a job,  and  perhaps

even  after  a job is awarded.  In determining Quality's  standby

award,  the  hearing officer relied on the state's May  17,  1996

notice-to-proceed  letter  and the statement  in  Gordon  Hayes's

October  13, 1997 letter that Quality was back "in full force  by

mid-August."   We  hold  that substantial evidence  supports  the

hearing officer's decision.21

            Our   own   interpretation  of  the  termination-for-

convenience  clause  also  leads  us  to  conclude  that  it  was

plausible  to read the contract to grant recovery for  idle  time

beyond  the  time  for removing equipment from  the  Chena  site.

Given  evidence  that it was the industry custom  not  to  charge

demobilization  costs  to a current project,  it  is  logical  to

conclude that the words "reasonable idle equipment time"  in  the

termination-for-convenience clause  cover  something  other  than

removing equipment from a job site.   We recognize that  this  is

not  the  only  reading  those words might  have,  but  it  is  a

plausible  reading shared by the hearing officer and accepted  by

the commissioner.             The hearing officer applied what he

termed  the "business judgment rule" to determine what  equipment

Quality  dedicated to the Chena project and the duration of  that

dedication.  The state asserts that the hearing officer erred  in

applying  the dedicated equipment theory doctrine and  that  this

was a legal error.  It does not appear, however, that the hearing

officer was creating a separate category of recovery that  turned

simply  on  whether equipment was "dedicated" or not.   The  real

question  was the duration of idle time, and substantial evidence

supported  the hearing officer's choice in this regard.   We  are

not  prepared to say as a matter of law based on the record  here

that  a  termination-for-convenience clause that permits recovery

for  reasonable idle equipment time precludes recovery after some

brief period of removal ends.

          The state cites Nolan Bros. v. United States,22 in which

the  United  States  Court of Claims examined a  termination-for-

convenience  claim for idle equipment time, as holding  that  the

standby  period  for  idle  equipment  is  limited  to  the  time

"immediately  following the termination of  the  contract."   The

court  of  claims then proceeded to define "immediately"  as  1.6

months  based on the facts before it.23  The essential debate  in

Nolan,  an  issue not very different from that in this case,  was

over  the  length of time for which recovery would be reasonable.

As  Quality  notes, the court in Nolan relied on Brand Investment

Co. v. United States, which explained that

          when  the Government . . . in effect condemns
          a  contractor's valuable and useful  machines
          to  a period of idleness and uselessness,  we
          think   that   it  should  make  compensation
          comparable  to what would be required  if  it
          took  the  machines for use for  a  temporary
          period, but did not in fact use them.[24]
          
The  superior court declined to read Nolan and other cases  cited

by  the  state to be so persuasive that they compel Alaska courts

to  hold  that idle equipment recovery time must end as  soon  as

equipment reasonably could have been removed from a job site.

          The state's final argument is that Quality's "dedicated

equipment  claim  is  for loss of anticipated  profits,"  a  loss

category  which is not allowable under  108-1.09.   Section  108-

1.09  explicitly  allows recovery for reasonable  idle  equipment

time.    The   hearing  officer  awarded  Quality   standby   for

"equipment"  dedicated to or utilized for  the  project.25   This

award  did not grant anticipated profits to Quality and  was  not

contrary  to   108-1.09 of the contract.  We  therefore  conclude

that it was not error to grant this award.

          C.   Quality Is Not Entitled to Additional Compensation
          for Unabsorbed Home Office Overhead.
          
           The termination-for-convenience clause allows recovery

for   "overhead  expenses  directly  allocable  to  the   project

termination  and not covered under work paid for at  agreed  unit

prices    or    contract   bid   prices."    Overhead    includes

organizational, administrative, and other general costs that  are

incurred for continuing operations.  The hearing officer  awarded

Quality  $92,200  for unabsorbed home office  overhead.   Quality

sought an award totaling $365,785.

           Quality advances three arguments to support its  claim

for  additional compensation for unabsorbed office overhead.  The

state  responds  that Quality's arguments lack merit.   We  agree

with the state.

          Quality first argues that the hearing officer committed

"a  simple  accounting  error" in awarding  Quality  $92,200  for

overhead.26  It argues that amounts the hearing officer denied as

to  other  items  should have been added to the  overhead  award,

which  Quality calculates should have been $365,785.  But Quality

does not actually allege an accounting error.  Instead, Quality's

calculation merely attempts to shift denied items to the overhead

category.   Giving effect to Quality's argument would  circumvent

much  of  the  hearing officer's decision.  The  hearing  officer

denied  certain  claims  for reasons  his  opinion  discussed  at

length.   We  decline  to  shift those  claims  to  the  overhead

category.27

           Quality  next  argues that it was error  to  calculate

daily  overhead by dividing the overhead by 365 days rather  than

184 days, the length of Quality's construction season.  The state

responds  that Quality did not present this issue to the  hearing

officer  and  that  it  is waived.  The state  also  argues  that

experts  for  both parties "agreed that unabsorbed  overhead  (if

allowed) should be calculated over a one-year period."

           To  calculate  Quality's overhead award,  the  hearing

officer   divided  $365,785,  the  amount  of  Quality's  claimed

overhead  costs, by 365 days.  This resulted in a daily  rate  of

$1,002.15.   The hearing officer then multiplied this  figure  by

92,  the  number  of calendar days he attributed to  the  state's

termination for convenience, and awarded $92,200.  Quality  cites

the  following testimony by Ronald Maus, the state's  expert,  to

support   its  argument  that  the  hearing  officer  incorrectly

calculated  its award over 365 days rather than a shorter  period

reflecting the seasonal nature of Quality's business:

          Q.         Well,  the  period  in  which  the
          overhead was not absorbed included . . . some
          six  months of fiscal year 1997 costs;  isn't
          that right?
          
          [Maus].    That's  true.   But  .  .  .   the
          absorption  is  done in the operating  season
          only,  which  essentially  runs  from  May  1
          through October 31.
          
           The state argues that Quality took this testimony  out

of context.  We agree, because Maus next testified:

          Q.         Sir, the overhead is fixed and  it
          runs  basically consistent year after year  -
          or month after month after month, all through
          the winter, right?
          
          [Maus].   That's true.
          
          Q.         But  the  period  that  they  earn
          monies  to  absorb that overhead is generally
          just in the summer months, isn't it?
          
          [Maus].   That's true.
          
           The  hearing  officer reasonably could have  concluded

from   this   testimony  that  overhead  costs  for  a   seasonal

construction  business continue over the course of  a  year  even

though  revenues  are generated primarily during  summer  months.

The  hearing  officer based his decision on the expert  testimony

and   his  own  expertise.   Substantial  evidence  supports  his

decision.

           Quality finally argues that "cut[ting] off recovery of

a  daily  calculated rate at August 17, just  produces  a  wholly

arbitrary and capricious number that is unrelated to .  .  .  the

amount of home office overhead that is unabsorbed as a result  of

the  termination."  The state responds that the hearing officer's

choice  of  August  17  is  supported by  the  same  evidence  he

considered in deciding Quality's claim for standby costs.

           It  does  not matter whether other cutoff dates  would

have  been  reasonable because the hearing  officer's  choice  of

August  17  was  supported  by  substantial  evidence,  including

Hayes's October 13, 1997 letter.

          The state's cross-appeal disputes the hearing officer's

$92,200  award  for unabsorbed overhead.  The state  argues  that

this  overhead is an indirect cost not chargeable to the  state's

termination.  Because we hold for the reasons discussed  in  this

subpart  that substantial evidence supports the hearing officer's

decision,   we  do  not  need  to  consider  whether  alternative

approaches  would  also have been valid.   We  will  not  reweigh

evidence when substantial evidence supports the hearing officer's

decision.28

      D.    The  Superior  Court  Did Not  Err  in  Vacating  the

Commissioner's           Award of Prejudgment Interest.

           The hearing officer awarded Quality an unspecified sum

for  "appropriate  prejudgment  interest."   The  superior  court

vacated  the  award.   Quality  advances  two  theories  why  the

superior court erred by vacating the prejudgment interest award.

           1.    Alaska Statute 36.30.685 and our ruling in Danco
Exploration
                 v.   State   preclude  Quality's   recovery   of

prejudgment interest.

           Quality first argues that because its "contract" claim

is of the type allowable under AS 09.50.250, prejudgment interest

is  recoverable  under AS 09.50.280.29  The state  responds  that

Quality's contract claim is the type required to be filed  as  an

administrative appeal under AS 36.30.685.30  The state  therefore

argues that Quality cannot bring an action under AS 09.50.250.

           Quality appealed the commissioner's decision under  AS

36.30.685(a)  and  Alaska Rule of Appellate Procedure  602(a)(2).

Quality  asserts  that  AS  36.30 merely  states  an  "exhaustion

requirement"  and "simply require[s] . . . claimants  to  exhaust

their  administrative  remedies" before bringing  suit  under  AS

09.50.250.    We   addressed  a  similar   situation   in   Danco

Exploration, Inc. v. State.31  Danco was the winning bidder in  a

state  lease  sale.32   A division of the Department  of  Natural

Resources  informed  Danco that it forfeited its  leases  because

Danco was late returning documents to the state.33  Danco appealed

this  decision  to  the  commissioner of natural  resources,  who

rejected Danco's claim.34  Danco then appealed the commissioner's

decision to the superior court, which reversed the commissioner's

decision.35  Danco attempted to recover prejudgment interest under

AS  09.50.280 after the superior court ruled in Danco's favor  in

its administrative appeal.36    We held:

          Danco's  claim  that it could have  sued  the

          State  in  tort or in contract  lacks  merit.

          Oil  and gas lessees and lease bidders  which

          have grievances with the State must pursue  .

          .  .  administrative procedures[.] . .  .   A

          party   who   brings   an   appeal   from   a

          commissioner's decision to the superior court

          is  bound by the result of such an appeal and

          may  not maintain a separate action under [AS

          09.50.250].[37]

           Quality  argues that Danco is distinguishable  because

"[Quality's]  claim  is undisputedly a `contract  claim.'  "   We

disagree.   This  is  not  an instance in  which  the  difference

between  bringing a claim under alternative statutes is merely  a

matter of form.  Quality did not have the option of bringing  its

claim under AS 09.50.250; that statute expressly provides that  a

"person  who  may bring [a procurement action] may not  bring  an

action under [AS 09.50.250] except as set out in AS 36.30.685."38

But  AS 36.30.685(a) did not authorize Quality to file a contract

claim  under  AS  09.50.250.  Instead, AS 36.30.685(a)  addresses

administrative appeals, the process Quality followed.

           We  assume  for discussion's sake that  a  procurement

claim  prosecuted in the superior court at a trial de novo  under

AS  36.30.685(b) is the procurement claim to which  AS  09.50.250

refers when it states that a "person who may bring [a procurement

action]  may not bring an action under [AS 09.50.250]  except  as

set  out in AS 36.30.685."  (Emphasis added.)  We therefore  also

assume  for  discussion's sake that a claimant  who  successfully

pursues  a  procurement claim in a superior court trial  de  novo

under  AS 36.30.685(b) may recover prejudgment interest under  AS

09.50.280.39         Because administrative appeals do not qualify

for  prejudgment  interest, Danco, 924 P.2d at 434,  and  because

subsection .685(a) governs traditional administrative appeals  of

procurement  claims,  we can safely assume  that  AS  09.50.250's

reference  to  AS  36.30.685 must be a  reference  to  subsection

.685(b).   Proceedings under that subsection  are  distinct  from

administrative appeals under subsection .685(a), because  of  the

trial  de  novo  provision  for claims brought  under  subsection

.685(b).    The   distinction  appears  logical  because   claims

presented  to  the superior court under subsection .685(b)  at  a

trial  de  novo have the characteristics of traditional  contract

claims  against  the  state, for which  prejudgment  interest  is

recoverable.   But we do not have to decide here  precisely  what

type  of  superior  court proceeding would entitle  a  successful

procurement  claimant to prejudgment interest  because  Quality's

superior  court  proceeding  was  clearly  an  appeal  under   AS

36.30.685(a), and was therefore governed by Danco.

           Quality next argues that "the real issue presented for

review  is  whether  the  agency  had  the  authority  to   award

prejudgment interest to [Quality] on its claim, as the DOT did in

the   administrative  claims  proceedings."   Quality  tries   to

distinguish its claim by arguing that the state and the  superior

court  wrongly  perceived the issue as being  whether  the  court

could  award prejudgment interest.  Quality explains that  "[t]he

doctrine  of sovereign immunity applies only to judicial  actions

brought   against   the  State,  and  has   no   application   to

administrative  proceedings."  But we have previously  held  that

"unless   interest  is  specifically  authorized  by  legislative

enactment, it may not ordinarily be assessed against the State in

any action."40

           Because Quality could not maintain its claim under  AS

09.50.250  and because the state had not specifically  authorized

prejudgment interest for this type of claim when Quality  brought

its  administrative appeal, the superior court correctly  vacated

the prejudgment interest award.41

            2.     Quality  is  not  contractually  entitled   to

prejudgment interest.

           Quality alternatively argues that the express terms of

the  contract  require the state to pay interest  and  that  "the

state's  immunity  to the assessment of such interest  is  waived

along  with  its waiver of sovereign immunity for claims  arising

from  the  contract."  Quality further urges  us  to  follow  the

holding  of the Washington Supreme Court in Architectural  Woods,

Inc.  v.  State.42  The court there reversed "the  trial  court's

denial  of interest to the plaintiff based on sovereign  immunity

and  [held] that any sovereign immunity possessed by [the  state]

was  waived  by  its entry into an authorized contract."43    The

court also held that "such waiver extended to every aspect of its

contractual  liability including liability for interest."44   The

Washington  court based its reasoning on principles  of  fairness

and  the  concept  that  the state should  not  expect  favorable

treatment.45   The  state  here responds  that  in  Alaska,  "the

authorization  to pay interest may not be implied,  but  must  be

specifically  and  explicitly authorized  solely  by  legislative

enactment."

           The  state is correct.  Alaska Statutes 09.50.250  and

09.50.280  provide  limited exceptions to the  general  rule  and

permit  awards of prejudgment interest against the state in  tort

and   contract  claims.46   Given  the  statutory  approach   the

legislature  has  chosen, the considerations that  persuaded  the

Washington   Supreme  Court  in  Architectural  Woods   have   no

application here.

             We  have  observed  that  "the  prohibition  against

prejudgment interest can easily work an injustice on a party  who

has  contracted  with  the state."47  The legislature  apparently

agreed  when it enacted AS 36.30.623 in 2001, but the legislature

did not choose to make that statute retroactive.  It consequently

does not assist Quality in this case.48

          E.    The  Hearing  Officer Did  Not  Err  in  Awarding

          Quality  Recovery for a Utility Delay  or  in  Allowing

          Quality To File a Late Utility Delay Claim.

           Quality filed a late claim for the utility delay  that

held  up  the project.  The hearing officer included the "utility

delay  component"  in awarding Quality recovery for  mobilization

and  demobilization, standby, and overhead.  The  state's  cross-

appeal  argues that the hearing officer erred in considering  the

claim  because  Quality waived the claim by not giving  adequate,

timely  notice  of  the  claim,  and  because   105-1.06  of  the

contract precluded monetary recovery for utility delays.  Section

105-1.06 states in part:

          It   is   understood  and  agreed  that   the

          Contractor has considered in his bid  all  of

          the    permanent   and   temporary    utility

          appurtenances in their present  or  relocated

          positions  as  shown on the  plans,  and  the

          completion   dates   for   various    utility

          adjustments  as may be stated in the  Special

          Provisions,    and   that    no    additional

          compensation will be allowed for any  delays,

          inconvenience  or  damage  sustained  by  the

          Contractor due to any interference  from  the

          said  utility appurtenances or the  operation

          of moving them.

           The state emphasizes the portion of the provision that

states  "no  additional  compensation will  be  allowed  for  any

delays."  But the cited provision clearly refers to delays caused

by  known  utility appurtenances - i.e., those "as shown  on  the

plans."   Because  the delay arose due to an unforseen  (although

ultimately nonexistent) utility conflict,49 we reject the state's

argument  that   105-1.06  precluded  recovery  for  the  utility

delay.50

           The  hearing  officer  based  his  decision  to  allow

Quality's delay claim to go forward on the state's recognition of

the  perceived  utility conflict in early June  and  the  state's

efforts  to resolve it.  He noted that "the State was aware  that

the contractor was not going to be able to conduct its work until

the utility conflict had been resolved," and then determined that

once  the  state terminated the contract, "[c]learly .  .  .  the

State recognizes that the contractor will be submitting a claim."

The  hearing officer observed that, even though the utility delay

claim   was  not  separately  presented,  "the  State  was  aware

generally of the nature of the claim."

          The hearing officer determined that a critical piece of

evidence supporting his decision was documentation of a  June  6,

1996  meeting between state and Quality representatives. He found

the  document  to be "consistent with [Quality's] letter  of  the

same  date expressing its concerns regarding the utility conflict

that   was   discussed   at   the  preconstruction   conference."

Substantial   evidence  therefore  supports  his  decision   that

"[Quality]  was delayed as a result of the utility  conflict  and

that delay is a compensable damage item."51

      F.    It  Was  Not Error To Deny the State's  Mutual  Fault

Counterclaim.

          The state argues that Quality was mutually at fault for

the termination because Quality did not obtain a "utility locate"

to  identify  any utility conflicts before construction  started.

The  state  alleges  that  "a reasonable contractor"  would  have

obtained  a  utility locate when first advised of the  previously

undisclosed  buried  cable.   The  state  argues  that   105-1.06

required  Quality  to obtain the locate.  That section  provides:

"Before  starting construction, the Contractor shall request  all

utility  owners  to  locate  their utilities  and  at  points  of

possible  conflict  the  Contractor  shall  uncover  the  located

utilities."   Quality  responds that  the  contractor's  duty  to

request  a  utility  locate does not arise until  shortly  before

excavation.

           The  hearing officer ruled that "a contractor normally

does  not  obtain a locate until shortly before he begins  actual

excavation."  His ruling did not conflict with  105-1.06 and  was

based  on evidence of a June 7, 1996 meeting in which the utility

manager stated that there "existed [a] . . . cable in the  center

of  the right-of-way."  Substantial evidence supports the hearing

officer's decision to deny the state's claim of mutual fault.52

     G.   The Issue Whether the Attorney General Had Authority to

Appeal the          Commissioner's Decision Is Waived.

           Quality argues that DOT's commissioner "is vested with

sole statutory authority to make the final decision on behalf  of

the  State regarding [Quality's] claims, [and that] the  Attorney

General   had   no   authority  to  challenge   or   appeal   the

Commissioner's  decision."  We do not need to  reach  this  issue

because  Quality  raises it for the first  time  on  appeal,  and

because it is not so compelling that it would justify review  for

plain error.53  Nonetheless, we note that Quality's argument does

not  appear  to  be  consistent with our prior decisions  or  the

Alaska statutes.54

IV.  CONCLUSION

           We AFFIRM the superior court's decision which affirmed

Quality's individual claim awards but which vacated the award for

prejudgment interest.

_______________________________
1      The  termination-for-convenience  clause  provides:   "The
performance of work under the contract may be terminated  by  the
Department in accordance with this section in whole or  in  part,
whenever,  for any reason the Contracting Officer shall determine
that such termination is in the best interest of the Department."
2     Section 108-1.09 of the contract states that "[p]ayment for
partially completed work will be made either at agreed prices  or
by time and materials methods . . . ."  The contract form did not
separate   amounts   for  mobilization  and  demobilization;   it
scheduled   a  "lump  sum"  amount  for  the  "mobilization   and
demobilization" item.
3     State  Farm Mut. Auto. Ins. Co. v. Lawrence, 26 P.3d  1074,
1076 (Alaska 2001).
4     Because  Quality had completed only minimal work  when  the
state terminated the contract, we need not consider whether there
had been substantial performance entitling Quality to recover the
contract  price.  Alaska State Hous. Auth. v. Walsh  &  Co.,  625
P.2d 831, 836 (Alaska 1980).
5     Estate  of  Basargin v. State, Commercial  Fisheries  Entry
Comm'n,  31  P.3d  796, 799 (Alaska 2001).  We  will  uphold  the
hearing  officer's  findings  if  they  are  supported  by  "such
relevant  evidence as a reasonable mind might accept as  adequate
to support a conclusion."  Id. at 800.
6      Quality  argues  that  the  state  audit  report  is   not
substantial  evidence.   But the hearing  officer  did  not  rely
exclusively  on  the  audit report.  He  considered  a  range  of
figures in determining Quality's award.  It was not error to  use
the  audit  report to help identify this range of estimates.   We
therefore do not need to consider whether the audit report  taken
alone  would have been substantial evidence sufficient to  uphold
the hearing officer's award.
7      The   record  contains  a  written  statement  on  Quality
letterhead  stating:  "It  is Quality Asphalt  policy  to  charge
projects   with  mobilization  cost  only  for   the   bid   item
mobilization  and  demobilization.   Demobilization  charges  are
charged  to  mobilization cost of the next project.   We  believe
this  is an industry standard for contractors like ourselves  who
move from job to job."
8     Federal Acquisition Regulation (FAR) 31.105(d)(3)  provides
that costs incurred at the job site are allowable so long as "the
accounting  practice used is in accordance with the  contractor's
established  and consistently followed cost accounting  practices
for all work."
9    Sections 101-1.34 and 101-1.35 of the contract state:

          101-1.34   NOTICE OF INTENT  TO  AWARD.   The
          written  notice by the Department  announcing
          the    apparent   successful    Bidder    and
          establishing the Department's intent to award
          the Contract when all required conditions are
          met.

          101-1.35   NOTICE  TO  PROCEED.   A   written
          notice  to the Contractor to begin  the  work
          establishing the date on which Contract  Time
          begins.

          Section 108-1.02 further provides:

          108-1.02   NOTICE TO PROCEED.  The Notice  to
          Proceed  will stipulate the date on which  it
          is  expected  the Contractor will  begin  the
          construction  and  from which  date  contract
          time  will be charged.  Commencement of  work
          by the Contractor prior to the effective date
          of the Notice to Proceed constitutes a waiver
          of  this notice and will begin contract time.
          Construction   operations   shall   not    be
          performed  before the effective date  of  the
          Notice  to  Proceed.   The  Contractor  shall
          notify  the  Engineer at least  48  hours  in
          advance   of  the  time  actual  construction
          operations will begin.
10     When  the superior court acts as an intermediate court  of
appeal  in an administrative matter, we will substitute  our  own
judgment  for  questions of law not involving  agency  expertise,
such as contract interpretation.  Williams v. Abood, 53 P.3d 134,
139 (Alaska 2002); see also Ellingstad v. State, Dep't of Natural
Res., 979 P.2d 1000, 1004 (Alaska 1999).
11     Section  108-1.06 defines "calendar days" and  "completion
date" for purposes of liquidated damages:

          Calendar  Days.   When the contract  time  is
          specified on a calendar days basis, all  work
          under  the contract shall be completed within
          the  number of calendar days specified.   The
          count  of  contract time begins  on  the  day
          following receipt of the Notice to Proceed by
          the   Contractor,  if  no  starting  day   is
          stipulated therein. . . .
          
          Completion Date.  When the contract  time  is
          specified  by  a  completion date,  all  work
          under the contract shall be completed by that
          date.
          
12     We will uphold the hearing officer's findings if they  are
supported by substantial evidence.  Estate of Basargin v.  State,
Commercial  Fisheries  Entry Comm'n, 31  P.3d  796,  799  (Alaska
2001).
13    Dataquest,  Rental Rate Blue Book for Construction Equipment
(2002).   The  Blue  Book  is  an annually  published  "industry-
sponsored   construction  equipment  cost  guide."    48   C.F.R.
31.105.
14      We   review   legal   questions  relating   to   contract
interpretation  de  novo.  Earth Movers  of  Fairbanks,  Inc.  v.
State,  824  P.2d  715,  717 n.4 (Alaska 1992).   We  review  the
hearing  officer's ruling on the appropriateness of  recovery  at
Blue  Book  rates  under  the substantial  evidence  standard  of
review.  Anderson v. State, Dep't of Revenue, 26 P.3d 1106,  1109
(Alaska 2001).
15     See,  e.g.,  5  MARGARET N. KNIFFIN, CORBIN  on  CONTRACTS
24.27, at 282 (1998) (stating that fact written terms of contract
were  authored by one party and merely assented to by  other  may
influence  court's  interpretation  of  these  terms);  see  also
Rockstad  v.  Global Fin. & Inv. Co., 41 P.3d 583  (Alaska  2002)
(construing  lease term against lessor responsible  for  drafting
lease); Little Susitna Constr. Co. v. Soil Processing, Inc.,  944
P.2d 20, 25 n.7 (Alaska 1997) (construing terms against party  in
adhesion contract, but also stating party had bargaining strength
relative to other party).
16    791 P.2d 339 (Alaska 1990).
17    Id. at 341.
18    Id. at 342.
19     The  hearing  officer  did  not  err  in  considering  FAR
guidelines in his decision.  We need not decide whether exclusive
use  of  FAR principles would have been error because the hearing
officer's  decision relied on a number of relevant factors,  each
of which is supported by the record.
20    The state also argues that "the claims clause prohibits the
use  of  Blue  Book rates."  But  105-1.17 addresses  claims  for
"additional compensation."  Quality's claim for standby costs  is
not for "additional compensation."  The hearing officer therefore
did  not  err  in concluding that  105-1.17 "does  not  have  any
application to this case."
21     The  state  also cites cases from other  jurisdictions  in
arguing that the hearing officer impermissibly allowed Quality to
recover costs for dedicated equipment.  Although these cases  may
support  the choice of a different period than the one the  state
would  choose, they do not alter the conclusion that the  hearing
officer's choice is supported by substantial evidence.   We  will
not   reweigh   evidence  in  light  of  the  state's   suggested
alternative.    We  only  review  the  record  to   ensure   that
substantial evidence supports the decision.  Anderson  v.  State,
Dep't of Revenue, 26 P.3d 1106, 1109 (Alaska 2001).
22     Nolan Bros. v. United States, 437 F.2d 1371, 1386 (Ct. Cl.
1971).
23    Id. at 1386.
24    Id. at 1387 (quoting Brand Inv. Co. v. United States, 58 F.
Supp. 749 (Ct. Cl. 1944)).
25     Section  101-1.23 defines "equipment" as "[a]ll  machinery
together  with the necessary supplies for upkeep and maintenance,
and   also   tools  and  apparatus  necessary  for   the   proper
construction and acceptable completion of the work."
26     We review questions of fact under the substantial evidence
standard.  Basargin, 31 P.3d at 799.
27     Similarly,  we are unpersuaded by Quality's argument  that
because  "neither  [the superior court judge]  nor  [the  hearing
officer]  are accountants . . . they fail to grasp from the  very
fact  of  [Quality's] claim calculation that a  deductive  credit
based on the assumed granting of another claim is no longer valid
when that other claim is disallowed."  The deficiency is not with
the  decisions of the hearing officer or the superior court,  but
with Quality's approach.  As discussed, this is not an accounting
problem  but  rather  an  attempt to impermissibly  shift  losing
claims to the amorphous "overhead" category.
28    Anderson, 26 P.3d at 1109.
29    AS 09.50.250 states in part:

          A  person  or corporation having a  contract,
          quasi-contract,  or tort  claim  against  the
          state  may bring an action against the  state
          in  a  state court that has jurisdiction over
          the  claim.   A  person who may  present  the
          claim  under AS 44.77 may not bring an action
          under  this section except as set out  in  AS
          44.77.040(c).   A  person who  may  bring  an
          action under AS 36.30.560 - 36.30.695 may not
          bring an action under this section except  as
          set out in AS 36.30.685.
          
          AS 09.50.280 states:

          If judgment is rendered for the plaintiff, it
          shall be for the legal amount found due  from
          the state with interest as provided under  AS
          09.30.070 and without punitive damages.
          
30    AS 36.30.685 states in part:

          (a)    A   final  decision  of  .  .  .   the
          commissioner  of  transportation  and  public
          facilities  under AS 36.30.610, 36.30.635(a),
          36.30.650,  or 36.30.680 may be  appealed  to
          the  superior  court in accordance  with  the
          Alaska Rules of Appellate Procedure.
          
          (b)    A   final  decision  of  .  .  .   the
          commissioner  of  transportation  and  public
          facilities under AS 36.30.630(b) [hearing  of
          a  contract  controversy] may be appealed  to
          the superior court for a trial de novo.
          
31    924 P.2d 432 (Alaska 1996).
32    Id. at 433.
33    Id.
34    Id.
35    Id. at 434.
36    Id.
37    Id.
38     AS 09.50.250 provides in relevant part: "A person who  may
bring  an action under AS 36.30.560 - AS 36.30.695 may not  bring
an action under this section except as set out in AS 36.30.685."
39    An unsuccessful procurement claimant may seek superior court
relief under AS 36.30.685.  Whether the superior court proceeding
falls  under subsection .685(a) or subsection .685(b) depends  on
the  procedure  followed  at the administrative  level.   If  the
claimant  has  received  a hearing at the  administrative  level,
subsection .685(a) applies, and the proceeding is treated  as  an
administrative appeal.  In comparison, subsection .685(b) applies
-   providing  for  a superior court trial de  novo   -   if  the
commissioner   of   administration   or   the   commissioner   of
transportation and public facilities decided the claim  under  AS
36.30.630(b),   i.e.,  by  "adopt[ing]  the   decision   of   the
procurement officer as the final decision without a hearing."  AS
36.30.630(b).

40     Stewart  &  Grindle, Inc. v. State, 524  P.2d  1242,  1245
(Alaska  1974).  The legislature has since authorized the payment
of interest for claims, like Quality's, filed under AS 36.30.620.
See  AS  36.30.623.   But this statute did not  become  effective
until  October  2001  and therefore does not apply  to  Quality's
claim.   Ch.  98,   1, SLA 2001 (Effective Oct.  8,  2001).   The
state  argues  that "[t]he absence in 1996 of a statute  like  AS
36.30.623 . . . significantly undercuts [Quality's] argument. . .
.  There  would  have been no need to enact AS  36.30.623  if  AS
09.50.250 - .280 were an explicit waiver of immunity for  payment
of  interest on DOT contract claims."  We agree with the  state's
argument,  but  our  holding  does not  depend  upon  it  because
Quality's  claim is clearly an administrative appeal  that  falls
outside AS 09.50.250.
41     See  Samissa Anchorage, Inc. v. State, 57 P.3d 676 (Alaska
2002)   (reaffirming that AS 09.50.250 and .280 do not allow  for
prejudgment  interest in cases brought as administrative  appeals
that could not have been brought under section .250).
42    598 P.2d 1372 (Wash. 1979).
43    Id. at 1377.
44    Id.
45    Id.
46    Danco Exploration, Inc. v. State, 924 P.2d 432, 434 (Alaska
1996);  Stewart  & Grindle, Inc. v. State, 524  P.2d  1242,  1245
(Alaska 1974).
47     State  v.  Phillips,  470  P.2d  266,  272  (Alaska  1970)
(quotations  omitted) (citing Wright Truck & Tractor Serv.,  Inc.
v. State, 398 P.2d 216, 220 (Alaska 1965)).
48    See supra note 40.
49     The contract allows the state to make changes under   105-
1.06  and  104-1.02  in the work requirements  "should  conflicts
occur  or utilities be discovered that are not shown on the plans
that  require  adjusting."  But these provisions  do  not  impact
Quality's  delay  claim, which is based instead  on  the  state's
termination.
50     We  review questions of contract interpretation  de  novo.
Earth Movers, 824 P.2d at 717 n.4.
51     Because  the delay claim is established on the alternative
grounds  discussed in this subpart, we do not  need  to  consider
Quality's  response that the state breached express  and  implied
warranties.
52     We  review this interpretation issue under the substantial
evidence   standard  because  the  interpretation  of    105-1.06
requires extrinsic evidence.  Little Susitna Constr. Co. v.  Soil
Processing, Inc., 944 P.2d 20, 23 (Alaska 1997).
53    Von Stauffenberg v. Comm. for Honest & Ethical Sch. Bd., 903
P.2d 1055, 1061 (Alaska 1995).
54     Pub.  Defender  Agency v. Superior Court,  Third  Judicial
Dist., 534 P.2d 947, 950 (Alaska 1975); AS 44.23.020(3), (8).