Volume 7 - Number 33 | August 17, 2009 - Construction Claims Advisor

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You are here: Home » Volume 7 - Number 33 | August 17, 2009

Volume 7 - Number 33 | August 17, 2009

EDITOR'S NOTES | Issue 7-33: When a contractor purchases materials or equipment for a project, the contractor leaves the realm of "construction contracting" and becomes a purchaser of goods. The Uniform Commercial Code (UCC) governs the purchase and sale of goods. The UCC allows the seller to limit its liability and disclaim much of the responsibility that would otherwise flow from the sale of its products. The purchase order and sales agreement forms used by suppliers typically contain this language.

In a case reported this week, a supplier's sales agreement limited its liability to repair, replacement or refund of the purchase price within one year of delivery of the goods. When the supplier's product failed several years after project completion, the owner sued the contractor. Because of the sales agreement, the contractor had no recourse against the supplier.

Other cases reported this week involve the federal procurement process. A contractor challenged a negative performance evaluation - a stain on its record that could preclude award of future federal contracts. But, a federal court said it lacked authority to set aside the evaluation or strike it from the record. And, a bidder learned the hard way that a delivery receipt from an e-mail server did not prove receipt of a proposal by the procuring agency.

CONTRACTOR LEFT EXPOSED AFTER SUPPLIER LIMITED LIABILITY: A material supplier effectively limited a contractor’s remedy under the terms of a sales agreement. The contractor had no recourse against the supplier when the project owner sued the contractor for defective materials.

NEGATIVE PERFORMANCE EVALUATION CANNOT BE SET ASIDE: A contractor’s challenge to a negative performance evaluation is a “claim” within the meaning of the Contract Disputes Act. But, the Court of Federal Claims lacks jurisdiction to set aside the evaluation or order its removal from the records. The court can only review the evaluation for abuse of discretion and remand the matter to the agency for further consideration.

“DELIVERY RECEIPT” OF PROPOSAL WAS NOT PROOF OF AGENCY RECEIPT: A “delivery receipt” from an offeror’s own e-mail server was not proof that the procuring agency received the proposal. The protester’s argument that the agency should have committed, in the solicitation, to electronic confirmation of receipt of proposals should have been raised prior to the submission deadline.