|
Volume 5 - Number 20 | May 14, 2007
|
EDITOR'S NOTES
Who hasn’t made an honest mistake at some point in a career? In business, some mistakes are quickly resolved. Others are not. In this week’s first case, a contractor relied on information from the developer without performing its own analysis to determine the amount of material needed to complete a siding project. Both parties severely underestimated the amount of siding needed for the fixed-price project. A state appeals court said that because the error was an honest mistake, the contractor should be compensated for the cost of the materials, despite the presence of a fixed-price contract.
An independent investigation was also not necessary for a project involving the Army Corps of Engineers. The Corps’ bid documents were not complete enough to alert the contractor to a differing site condition. Hence, the contractor merited the claim.
In the final summary, a contractor cannot expect a windfall when the court rules it was wrongfully terminated from a job. It can seek compensation for the net profit of the unperformed work, not the total sum of the unpaid portion.
This issue concludes with a look at two types of contractors—those that anticipate claims and those that simply wait for them to happen. Larry True provides a narrative of how your cost control system can help you plan for a successful claims process.
|
|
CONTRACTOR RELIEVED FROM QUANTITY BLUNDER
A state appeals court exonerates a contractor from an honest mistake in which both the owner and contractor significantly underestimated the quantity of material needed to perform the work on a fixed-price project.
|
|
CONTRACTOR’S PRE-BID INVESTIGATION RULED ADEQUATE
Bidders vying for an Army Corps of Engineers dredging contract do not necessarily need to perform independent subsurface investigations. If the Corps offers adequate proof of subsurface conditions that later proves to be grossly inaccurate once the project commences, the discrepancy merits a claim for a differing site condition.
|
 |
CLAIMS CONSCIOUS OR LOSS MOTIVATED – WHICH ONE ARE YOU?
By Larry True
When it comes to construction claims, there are two types of contractors—those that plan ahead for potential claims and those that wait to address the problem until it’s potentially too late. Larry True explains that you can use your cost control system in conjunction with good project management to help make the claims process a more successful endeavor.
|
|
