01/15/2021

Editor's Notes

The terms and conditions of any construction contract are comprised of clauses, frequently “standard” to the project owner, that are intended to apply to all projects the owner undertakes. The contract also includes special provisions and specifications unique to that particular project. The interplay among the components of the contract can raise some interesting questions. This was seen in a recent dispute arising out of a federal contract for a flood control project.

 

The contract contained a standard Suspension of Work clause, authorizing contractor recovery for the cost of suspended work of unreasonable duration. The contract also included a standard Default clause. The contractor could be terminated for failure to prosecute the work in a timely manner but was entitled to an extension of time for extremely adverse weather. A special provision in the contract stipulated varying numbers of days for each month when the contractor should anticipate adverse weather. The contractor was required to include those weather delays in its CPM schedule, effectively excluding those delays from any extension of time.

 

A landfalling hurricane caused extreme flooding. The Corps of Engineers issued a suspension of work order. Was the contractor barred from recovery of suspension costs for the stipulated days of adverse weather? Or did those days only limit an extension of time in a default situation?

 

The second case in this issue involved a California public project owner’s unorthodox change order procedure. If a statute or charter does not prohibit oral contract modifications, the owner, through a course of conduct, may waive the contract requirement for advance written directives.

 

The third case is a Pennsylvania bid protest. The bid solicitation’s definition of “the Work” was too vague to allow enforcement of a prime contractor self-performance requirement. But the definition of a disadvantaged small business enterprise was clear. The failure to commit to 10% DBE subcontracting spoiled an apparent low bid.

 

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