What’s the difference between a suspension of work and a constructive change? For federal contractors, there are two important differences:
- If you want profit, prove a constructive change.
- If any other contract clause affords an equitable adjustment (e.g., Changes Clause), the Suspension of Work clause won’t help you.
To recover from a suspension of work, a contractor must show:
- Contract performance was delayed;
- Government directly caused the delay;
- The delay was for an unreasonable period of time; and
- The contractor suffered damages therefrom (excluding profit); and
- No other clause provides an equitable adjustment to the Contractor
To prove a constructive change, a contractor must show:
- Any written or oral order from the Contracting Officer;
- Not a directed change;
- That caused a change;
- Contractor gave timely notice that it considered the order as a change; and
- The contractor suffered damages therefrom.
In a recent Civilian Board of Contract Appeals decision, the Board agreed with the contractor in finding an unreasonable delay (179 days) and awarded damages for a suspension of the work. In the same decision, the Board also found a constructive change in the contractor’s favor. The Board did not discuss why the suspension of work clause prevailed when the contractor may have been able to show a constructive change (unless, perhaps, notice of a constructive change was inadequate).
BCPeabody Construction Services, Inc. v. Dept. of Veterans Affairs, CBCA No. 5410, March 26, 2018
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?
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.
