Too often I’ve heard, “we didn’t want to rock the boat, so we just discussed the problem, but didn’t provide written notice.” But, remember The Godfather – “It’s not personal, it’s strictly business.”
Under a contract to furnish and install HVAC piping for a U.S. Army training facility at Joint Base Elmendorf-Richardson in Anchorage, Alaska, the Contractor argued the contract drawings and specs lacked the design details necessary to perform the work. The Contractor submitted several RFIs.
The Government argued the Contractor must use a letter, not an RFI, to notify the Contracting Officer of design problems. The Board held the information conveyed in the Contractor’s RFIs was sufficient to notify the government of a design discrepancy and “the Board (and the government) should not elevate form over substance in evaluating the sufficiency of a contractor’s notice.”
The Government also argued that the Contractor bore the risk of performing the changed work before the CO responded to the Contractor’s notice. Holding in the Contractor’s favor, the Board reasoned the risk borne by the Contractor is the risk of an incorrect course of action. If the Contractor takes the correct course of action (i.e., if it performs the work exactly as the CO would have directed) the Government suffers no harm, so the Contractor bears no such risk. When the Contractor acts before the CO responds, the Contractor bears the risk of taking incorrect action. If you’re gonna act, make it the correct action.
This case did not decide which party was at fault for the missing design details (i.e., Spearin Doctrine). But, [spoiler alert] the Government doesn’t automatically bear such responsibility even if it is a design-bid-build contract.
Appeal of UNIT Company, Armed Services Board of Contract Appeals, No. 60581 (Feb. 12, 2018).
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I promise that any disputes between us will be argued at your house. Time passes and a dispute begins to brew. Now, I want to argue at my house, not at yours. You pay costs to argue at my house that you wouldn’t have incurred had I done as agreed. Should I have to reimburse your costs?
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Linking Obligations
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