When a project owner issues a directive that the contractor considers a change in the scope of work, the contractor does not have many options. The practical necessities of the project – and the contract documents themselves – require the contractor to proceed with the work. The best the contractor can do is to preserve its rights to pursue a claim for a constructive change in the contract.
A recent case illustrates the hurdles an owner can place in the contractor’s path. A federal agency used a changes clause that required the contractor to submit an itemized change order cost proposal. The agency then responded with a “settlement by determination” – a unilateral contract modification in which the government set the price adjustment at the amount it considered adequate.
Other cases this week involved the optional use of a prevailing wage law and the treatment of subcontractor experience when evaluating proposals. A school board could elect to impose prevailing wage standards even though school projects were expressly exempt from the state wage statute. And, agency evaluators could not treat subcontractor experience in an inconsistent manner.
