Volume 7 - Number 8 | February 23, 2009
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EDITOR'S NOTES | Issue 7-8
Every business has some type of customer service policy. For some, the customer is always right. Others employ the “we’re not happy until you’re happy” methodology. And unfortunately, too many companies have an unwritten policy that assumes the customer is usually wrong, or worse, always lies. Regardless of the service philosophy, what happens when a customer isn’t satisfied with a product or the service falls short of the expectation or promise? Or, what are the payment obligations when the actual cost of a service far exceeds the estimate? Both issues are at the heart of this week’s first case. A contractor hired a consultant to negotiate an equitable adjustment on a construction project, but the consultant failed to deliver on promises made. The contractor stopped paying the consultant’s invoices, which significantly exceeded the original estimate, and the consultant sued for monies owed plus interest. Because the contractor did not have a written contract with the consultant, the contractor was liable for the entire amount, not just the estimate.
Next, a Texas appeals court ruled that substantial completion of a project was insufficient for release of a contractual retainer. Only the certified final completion and submission of all close-out documents could trigger the contractor’s right to that payment.
In the third case, a contracting officer improperly terminated a contractor after denying its requests for time extensions related to a differing site condition on a solid waste removal project.
We conclude this issue with a look at the problem-laden Clark County (Nev.) Regional Justice Center. The parties, Clark County and A.F. Construction, engaged in a 10-week arbitration that resulted in a 195-page decision that ultimately netted a $52.7 million recovery for the contractor. Construction Claims Advisor obtained a copy of the decision from the county, and then interviewed the lead counsel for A.F. Construction and its surety.
CLAIM CONSULTANT ENTITLED TO FOUR TIMES ORIGINAL ESTIMATED FEE
Lacking a formal contract to limit a claim consultant’s fees, a contractor is obligated to pay for the services rendered, regardless of the satisfaction with those services, says a federal appeals court.
DEFAULT REVERSED BECAUSE CONTRACTING OFFICER MISUNDERSTOOD COMPLETION DEADLINE
A contracting officer muddles a default termination after misinterpreting the contract deadline. The ASBCA rules that an allowance should have been made for a differing site condition on the sludge removal project.
CLOSE-OUT DOCUMENTATION REQUIRED BEFORE RELEASE OF RETAINAGE
A Texas court separates the difference between substantial and final completion as they relate to payment retainage.
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