Rely at your own risk upon a Contracting Officer’s statements when statutes or contract provisions may conflict.
U.S. President Reagan used the phrase, “Trust, but Verify” from about 1984-1987 in the context of nuclear disarmament. See a short clip here of President Reagan using that phrase with Mikhail Gorbachev by his side.
That same phrase also applies to communication between Owner and Contractor, Government and Contractor, and/or Contractor and Subcontractor. I’m not suggesting rampant lying or fraud by anyone. Nor am I suggesting disbelieving everything heard – doing that could cripple our world. Rather, to preserve your interests, simply be mindful of words, either spoken or written, and actions done. Balance your trust with a dash of constructive skepticism.
For example, the Armed Services Board of Contract Appeals has denied appeals when Contractors relied upon statements made by Contracting Officers, but the Contractors didn’t verify the accuracy of the statements by reviewing applicable laws or Contract Documents. The Contractors trusted, but failed to verify. Use the few minutes it may take to verify or risk forfeiting recovery.
Appeal of Anaconda Construction Co., ASBCA No. 60905 (June 26, 2017).
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?
Show Your Work
A mentor of mine once said that process and procedures can be more important than substance and results. Like solving a math problem, how you solve it is often more important than the answer itself. The same is true in resolving construction contract disputes with public owners.
Substandard is Not Defective
The government need not follow the industry standard. It can do less or more.
Hide, Seek, & Seek
Have you ever played hide and seek? If you are the seeker, do you win the game when you find the hidden person? Yes, of course! Unless, you’re a government contractor.
Contractor Schooled School
Have you ever done exactly what you were supposed to do, but it didn’t work and you were blamed anyway? Nevertheless, if contractors follow the owner’s plans and it still doesn’t work, the contractor may be without fault – this is as it should be.
Walk It Off, Keep Going
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.
Are We There Yet?
Next time you close a deal, get the essential terms on paper and signed by all parties before it’s Miller Time.
