On virtually every construction project, public or private, the contractor deals directly with a designated representative of the project owner. The owner’s rep provides information, answers questions and conveys directives. The representative seems to act with considerable authority and autonomy. That impression, however, can be misleading.

In a recent Minnesota case, a municipality’s project engineer signed a change order. The contractor acted in reliance on the change order. However, the city code stated that this preliminary change order was not final until it was approved and signed by the city engineer and the city manager. The project engineer signed the change order knowing it was unlikely his boss, the city engineer, would approve the increase in the contract price. The project engineer simply wanted to process the document and maintain a good relationship with the contractor.

When the project engineer’s superiors refused to approve the change order, the contractor was left without recourse. The project engineer followed the change order procedure. The contractor should have been familiar with the procedure and realized the project engineer lacked authority to finalize a change order.

Other cases this week involved a contractor’s insistence on a project owner investigation of an alleged differing site condition and a bid that misallocated costs among the contract line items. The contractor, having given notice of the site condition, could not refuse to continue work pending an investigation of the condition. And the bid, while mathematically unbalanced, was not shown to create an unacceptable risk for which the government would pay an unreasonable price for the work. The bid should not have been rejected.