During a recent soccer game, my seven-year-old son took the ball squarely in the face. But, he walked it off and continued playing. Contractors must do the same with changes.
In 2006, under a contract with NAVFAC for repairs to a wastewater treatment system at Naval Station Guantanamo Bay Cuba, the Contractor encountered differing site conditions. NAVFAC did not issue a suspension or stop work order, but the Contractor stopped working awaiting responses to RFIs. NAVFAC did not respond to all the RFIs. So, the Contractor submitted a certified claim, but the Contractor never resumed work. The Contractor should have continued working.
Under the Federal Acquisition Regulations, the Contractor is obligated to “prosecute the work diligently” and continue performance pending the outcome of a claim. (FAR 52.211-10 and 52.233-1(i)). Doing so not only mitigates potential delays and damages, but it ensures that when a claim is submitted, a “sum certain” (i.e., showing of damage) is possible.
In this case, the Contractor’s claim submission was premature and the Contractor’s refusal to perform directed or constructive changes pending the promise of payment precluded the ASBCA from having any power to resolve the dispute. The ASBCA dismissed the Contractor’s appeal because the Contractor sought future damages for work it had not yet performed. At worst, NAVFAC could have terminated the Contractor for default.
Appeal of Islands Mechanical Contractor, Inc., ASBCA No. 59655 (April 13, 2017)
Payment for Verbal Changes When a Writing was “Required”
Even if your agreement can only be modified by a writing, you may still have a good argument to be paid for extra work.
Pirates and Arbitration
How does a pirate solve a dispute (besides walking the plank)?
Bases Covered?
Contractors, will your current insurance policy cover “your work” as a joint venture partner? The typical answer is NO.
Two Paths at the Same Time to the Same Place
“Two roads diverged in a wood, and . . .” the Prime Contractor had to take both roads at the same time to the same place.
Rules, Which Rules?
Good Idea: Include a choice of law clause in your contract to promote consistency and predictability (while reducing potential costs and risk).
Government Liability for Third-Party Delays
Generally, the Government is not responsible for delays caused by third parties, even other contractors at its own project site, unless the Government affirmatively indicates the site will be ready and available.
Keep a Pass-Thru Claim Burning, Don’t Extinguish Liability
Prime contractors, have you ever submitted a subcontractor’s claim to a public owner? Subcontractors, have you ever wanted to submit a claim against the government, but you had no contract with government?
When You Can’t Recover from a Third-Party (The Economic Loss Doctrine)
Suppose that you (the Contractor) had extra costs and want payment for those extra costs from the designer.
Barbecue and Construction Contracts
While barbecue recipes can be short and simple, contracts can be long and complicated. Fundamentally, though, recipes are very much like contracts: what’s required, how much of each part/ingredient, in what order should they be assembled/added, when, and for how long?
