Volume 8 - Number 7 | February 15, 2010
Recent Issues
EDITOR'S NOTES | Issue 8-7
Construction contracts are rife with requirements for written notice. Notice of a differing site condition, notice of a directed change in the scope of work, notice of delay ... all followed by ominous warnings that the contractor's failure to give timely written notice will result in forfeiture of contractual rights to additional time or compensation.
Are these notice requirements enforceable against contractors? It depends on whether or not the project owner is prejudiced by the lack of timely written notice. Did the owner lose the opportunity to respond to the situation? Was the owner's legal position altered? If the owner had actual knowledge of the occurrence, it can be argued that the lack of formal notice was harmless.
In a recent case from Hawaii, a highway contractor failed to give timely written notice of a claim for indirect impact costs resulting from an unmarked subsurface utility line. The contractor argued that the state transportation department was well aware of the discovery from the outset. But, the project owner responded that if it had received notice of an impact claim, it would have monitored and tracked the contractor's actual costs.
Other cases this week involve the use of trade practice to determine the scope of work and a bidder's proposed construction schedule. Trade practice and standards of good workmanship were used to read work requirements into a contract. And, the bidder was disqualified by its use of a hypothetical start date for scheduling a 90-day work sequence.
PROJECT OWNER MAY HAVE BEEN PREJUDICED BY LATE NOTICE OF IMPACT CLAIM
The question of whether a contractor’s claim for impact costs was barred by late written notice prompted the question of whether the project owner was prejudiced as a result. The contractor argued the owner was
aware of the claim event from the outset. The owner contended the lack of notice of an impact claim caused the owner to fail to track the contractor’s actual costs.
TRADE PRACTICE IMPOSED COMPONENTS INTO DESCRIPTION OF WORK
Although a roofing contract did not expressly call for certain flashing, trade practice and standards of good workmanship imposed that work requirement on the contractor. Approval of the work by a municipal inspector did not establish good workmanship or contract compliance.
BIDDER SHOULD NOT HAVE ASSUMED SPECIFIC START DATE
A solicitation did not stipulate a commencement date for the work. When an offeror demonstrated its 90-day scheduling in its technical proposal, the offeror should have indicated that the start date was a mere “placeholder” and not the date it expected to start work. The proposal was technically unacceptable.
