We all know what happens when we “ASS-U-ME” something. So, we should all carefully avoid assuming things unnecessarily.
The prime contractor described below recovered its costs by properly not assuming a duty. This required a distinction among duties that:
- must be done;
- should be done; or
- need not be done.
On a project for the Florida Department of Transportation, the Prime Contractor terminated its landscaping subcontractor for default after the obligatory 72-hour cure period passed. The Prime then promptly submitted a performance bond claim to the terminated sub’s surety. The Prime was obligated to and did wait the 15-day “grace period” for the surety to investigate and respond. However, when the surety failed to substantively respond, the Prime properly mitigated its damages by engaging a replacement subcontractor.
Upon completion of the replacement subcontractor’s work, the Prime submitted its recoverable costs to the defaulted sub’s surety. The surety denied payment by arguing the Prime failed to assist with the surety’s investigation of the default. The Court awarded summary judgment to the Prime finding it had no duty to assist with the surety’s investigation absent an express requirement, which was not included in the bond or subcontract.
The Court agreed that the Prime need not help the surety with the heavy lifting of investigating the sub’s termination for default.
Owner SOL When Mandatory Mediation Didn’t Toll Statute of Limitations
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Government Must Review Claims in Good Faith, Not “Conjure Up” a “Baseless Retaliation”
A contracting officer’s review of certified claims submitted in good faith is not intended to be a negotiating game where the agency may deny meritorious claims to gain leverage over the contractor.
Termination for Convenience was OK to Get a Lower Price
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Pirates (Parties) Should Arbitrate Arbitrability
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Very Bad Behavior Without Bad Faith is Not a Breach of Contract
Despite “abhorrent” behavior by the Army Corps of Engineers, a majority of the Armed Services Board of Contract Appeals held there was […]
Government Construction Contracts Require Bonds, Even When Contract Doesn’t Say So
Yesterday (Nov. 5, 2018), the Fed. Cir. Ct. of Appeals again endorsed the Christian doctrine, which can make unstated requirements part of a government contract.
Government’s Negligent Estimate a Trick?
The Government’s negligent estimate failed to provide the “most current information available.”
Prime Contractor Had No Duty to Help Surety Investigate Sub’s Default
We all know what happens when we “ASS-U-ME” something. So, we should all carefully avoid assuming things unnecessarily.
It’s Good to Be the King
Mel Brooks in the movie History of the World: Part I (1981) said it best – “It’s good to be the King.” It’s also true when asserting claims against the State or an arm or agent of the State.
