Volume 5 - Number 30 | July 30, 2007 - Construction Claims Advisor

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You are here: Home » Volume 5 - Number 30 | July 30, 2007

Volume 5 - Number 30 | July 30, 2007

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EDITOR'S NOTES | Issue 5-30: In a consumer-driven world, buyers want the best value for their dollar. For some, that means opting for the cheapest, barebones item. For others, it means choosing the item with the most bells and whistles, which is often priced at the opposite end of the cost spectrum. In military contracting, best value usually falls somewhere between these two extremes. In the contract associated with this week’s first case, a best value determination was reached based on “corporate experience, past performance, contingency plan, management approach, small business utilization, and cost.” Overall, the non-cost factors were deemed more important that dollar figures with special emphasis placed on past performance, safety, organization, home office support, key personnel, accounting and management systems, procedures and small business concerns. The low bidder on the project was unsuccessful in its bid and its protest arguing that it provided the best value.

Also this week, a state appellate court upholds a decision awarding the cost of unit-price items to the contractor after the contractor needed to use more items than stated in its bid estimate. And, a state high court overturns a lower decision and states that a contractor met its obligation to file a timely lien foreclosure suit although the lien had been bonded off by the project owner.

Finally, construction claims consultant Todd Mayo offers helpful tips on how to organize and manage electronic documents as they relate to litigation and discovery. He suggests that getting involved in the coding process will give you an edge that will also save time, money and headaches.

“BEST VALUE” EVALUATION NOT BASED ON NUMERICAL COUNT: In awarding contracts based on “best value,” government agencies do not simply tally the strengths and weaknesses of each bidder to reach a decision. It also involves an admittedly subjective process based on overall representation. A rejected bidder fails to prove that it was unjustly rejected.

CONTRACTOR RECOVERS FOR FULL QUANTITY OF UNIT-PRICE ITEMS: A bid estimate on a unit-price item does not necessarily provide a cap on the quantity needed to complete the project. Unless the contract specifies otherwise, the owner is responsible for the additional costs.

NO SEPARATE ACTION REQUIRED AGAINST BOND SUBSTITUTED FOR A MECHANIC’S LIEN: When a project owner bonds off a mechanic’s lien, the contractor does not need to file a separate action against the bond if its lien foreclosure suit is timely.