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Volume 5 - Number 27 | July 2, 2007
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EDITOR'S NOTES
Many owners and contractors will agree that the best projects are those in which all parties work together to ensure the success of the project. Disagreements are inevitable, but with open communication, those disagreements do not necessarily turn into major road blocks. For the fixed-price project discussed in this week’s first case, all parties worked towards a common goal—to finish on time. Despite combined efforts from the contractor and owner, the project hit a few snags and finished a month behind schedule. Because of the late finish, the owner withheld final payment, arguing breach of contract. The court ruled that the owner did not follow proper procedure regarding the alleged breach and therefore could not withhold the payment.
Contract riders are not uncommon on public projects. The subcontractor in this week’s second case refused to sign a particular rider, then appealed the contractor’s decision to replace it with another sub that agreed to the rider. Its appeal was unsuccessful.
In the final case, the GAO instructs that a contractor should not wait for the procuring agency to ask questions about a proposal, especially when the proposal contains a unique way of executing the project. The proposal should be a self-contained document if the bidder expects to be competitive.
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PROJECT OWNER WAIVED RIGHT TO ENFORCE COMPLETION DEADLINE
A project owner and its contractor adopt a “work together” mode of operation to wrap up a project that runs several weeks overdue. However, when it comes time to pay the contractor, the owner wrongfully withholds final payment, arguing breach of contract.
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LISTED SUBCONTRACTOR LACKED LEGAL RECOURSE AFTER REPLACEMENT
A subcontractor that objects to a contract rider on a public project appeals to the state high court to stay on the list after the prime contractor replaces it with another sub willing to sign the rider. The court finds no legal backing to protect the original subcontractor.
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COMPRESSED CONSTRUCTION SCHEDULE WAS NOT A PROJECT “BETTERMENT”
The GAO determines that a proposal containing a significantly compressed construction schedule does not amount to physical project “betterment” as requested in the RFP. The contractor should have provided details to justify its proposal, not wait for the procuring agency to follow up.
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