When you know a current action or inaction is wrong, but you do not object, should you be allowed to object later? Typical notions of fairness may suggest the answer is no. But, contractual fairness is whatever the parties’ agreed would be fair before the wrong action or inaction ever occurred.
In September 2009, a Contractor agreed to perform reconstruction work on a hurricane protection levee in St. Charles Parish, Louisiana. The Contract included specific requirements for the placement of geotextile fabric. With the U.S. Army Corps of Engineers inspectors onsite and observing, the Contractor installed (or placed) most of the total fabric for the Project. The Contractor also submitted QC reports detailing how the fabric was placed. The Corps acknowledged receipt of the Contractor’s QC reports and took no exceptions to the Contractor’s methodology.
Only after the Project was about 2/3 complete, did the Corps reject the Contractor’s placement methodology as being contrary to the Contract requirements. The Corps demanded all the fabric that was already placed and covered with fill be uncovered and re-placed. The Contractor understandably objected, but had to comply and filed a certified claim seeking recovery.
The Armed Services Board of Contract Appeals held the Contract requirements were not ambiguous (i.e., the Contractor should have known it was placing the fabric incorrectly).
The Contractor is in a tough spot. It thought that its interpretation of the Contract was reasonable and correct. So, the Contractor thought it was unnecessary to formally confirm its understanding with the Corps before beginning work. Additionally, the Contractor probably thought its understanding was confirmed when the Corps inspectors did not object.
This story is not over. The Contractor may yet prevail at a hearing. The text of the fabric placement requirements is included in the link below. Do you think it’s unclear?
Roads& Bridges | Confusing Waters
CONFUSING WATERS | A Supreme Court ruling leaves room for ambiguity
What happens when there may be a “significant nexus” between “adjacent” and/or […]
Roads & Bridges | Authority Defined
AUTHORITY DEFINED | The Law of Agency is Important to Understand
For any project, this Russian proverb is helpful: Doveryay, no proveryay – […]
Jurisdiction is Power
Not bad power, but the ability of a decision-maker (e.g., court) to decide which side is right (or which is more correct). […]
Roads & Bridges | Defining Labor
DEFINING LABOR | How the Miller Act continues to shape the industry
In the late 1700s, risks of nonpayment caused a shortage of […]
Roads & Bridges | Mediation Melee
MEDIATION MELEE| An arbitration case can be costly
Arbitration can be a bridge over troubled waters. In this crossing, the parties argued over […]
Roads & Bridges | Written Notice
WRITTEN NOTICE | Beware that strict compliance of the contract might be required.
When an owner replaced a contractor for significant safety violations, […]
Roads & Bridges | Mommie Dearest
MOMMY DEAREST | The story of an ESA without a MOM
Nobody enters this world, or a contract, without a mother: There can […]
IIJA | Does Closing a “Giant Loophole” Cost Contractors?
A recent article published by Roads and Bridges magazine reports that the Office of Management and Budget is working to broaden the scope […]
Roads & Bridges | Buy American Plan Gets an Update
BUY AMERICAN PLAN GETS AN UPDATE
The Office of Management and Budget is developing standards to replace the current Buy […]
Jonathan J. Straw
Blog Author
Contact Jonathan
Partner | KraftsonCaudle.com
Download Jon’s Bio
