Contract modifications commonly contain broad waiver and release provisions. The contractor acknowledges it is being compensated in full for the contract changes and thus waives and releases any claim against the owner for additional compensation. If the contractor wishes to reserve or except a claim, it must do so with clear, express language. But, can the waiver and release clause reasonably be applied to claims that arise after execution of the contract modification?

In the first case reported this week, a project owner issued 279 extra work orders after entering into a contract modification with the contractor. When the contractor filed a claim for the cumulative impact of those changes on the contractor's labor efficiency, the owner said the contractor had waived the claim under the terms of the prior contract modification. A federal appeals court, in a puzzling and controversial split decision, agreed with the owner, overturning $2 million in labor inefficiency costs and $1.6 million in delay costs awarded by the federal claims court.

Other cases reported this week involve a joint check agreement with a subcontractor and a supplier's right to seek payment after missing a payment bond claim deadline. The subcontractor was not allowed to bring a claim directly against the government despite the government's breach of the joint check agreement. The supplier fared better and was allowed to pursue other remedies despite its tardiness with the bond claim.