08/17/2020

Editor's Notes

It is common for a project owner to furnish equipment for its own project. Procuring the equipment directly from a third party may provide the owner with cost savings or better project control. It raises the obvious question of division of responsibility between owner and contractor. This can be clearly addressed by explicitly listing owner-furnished and contractor-furnished equipment. Sometimes, however, it is not.

 

A federal contract for construction of a military training facility included a complete commercial-scale kitchen. The contractor-furnished equipment list did not include the kitchen equipment. Neither did the owner-furnished list. But the owner list had a note stating that anything not on that list was the contractor’s obligation. And, boilerplate language in the contract said the contractor must deliver a complete, fully functional project. That was enough to hold the contractor responsible for procuring and installing the kitchen equipment.

 

Another case in this issue involved calculation of the amount “owed” under a contract for purposes of a state prompt payment statute. The public project owner’s entitlement to liquidated damages under the contract had to be determined before arriving at that amount and imposing recovery under the statute.

 

The third case addresses contractor compensation for heightened security measures at an overseas military installation. The measures were imposed by a third-party base operator, not the U.S. government. The construction contract had not warranted the absence of such measures. The Federal Circuit ruled the contractor was not entitled to additional compensation.

 
 
 

 

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