If all apples are fruit, then why are all fruit not apples? Because the part does not represent the whole. A Government Contractor discovered this when it learned that all unsuitable material was unsatisfactory material; but, all unsatisfactory material was not unsuitable material. Let me explain . . .
Under a Contract with the U.S. Army Corps of Engineers for two explosives storage magazines and a storm drain at Picatinny Arsenal, New Jersey, “unsatisfactory materials” were to be replaced with satisfactory materials. Basically, “unsatisfactory materials” included anything that could not be used as backfill.
As is typical, the Corps answered several pre-bid questions that later became amendments to the Contract. One of the Corps’ answers stated, “assume unsuitable material is not encountered.” The Contractor improperly equated “unsuitable material” with “unsatisfactory material.”
Although the term “unsuitable material” was not separately defined in the Contract, the Court found that other Contract provisions (e.g., pre-bid Q&A’s, specs, and soil borings) helped to define it as “unsatisfactory material” but only at certain depths/locations. Thus, the pre-bid Q&A did not pertain to “unsatisfactory materials” generally; but, only a subset of unsatisfactory materials – “unsuitable materials.”
While the whole included the part (unsatisfactory material included all unsuitable material), the part did not equal the whole (unsuitable material did not include all unsatisfactory material).
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?
