Executive Summary: Looking at a recent case in the state of Washington, a contractor attempted to be compensated for additional cost resulting from the project engineer’s direction to perform work different from the contractor’s desired sequence. The Court ruled against the contractor because of his failure to provide notification in accordance with the contract requirements. (See Construction Claims Monthly, Dec. 2016, page 90).
The background. General Construction Company (GCC) was the general contractor on a fish bypass project in Washington. There were three separate slots to be constructed and GCC wanted to build two at once. The project engineer directed that the work proceed sequentially. This change in work sequence resulted in additional cost to GCC.
Notice given by GCC. It seems obvious from reading the case summary that GCC didn’t provide the proper notice and their attorneys knew it. GCC used three arguments in their pursuit of additional compensation, which all failed:
- The owner had superior knowledge of dam defects.
- GCC did give written notice on a chalkboard.
- The owner’s engineer told GCC not to file a claim.
The Court’s decision. No, no, and no.
Item #1 is pretty much accusing the owner of fraud. This is a slippery slope and one which is hard to prove.
The second item, item #2, must have been hard for the attorneys to write, much less say, in a public courtroom. It’s just embarrassing that the contractor didn’t write the necessary letter(s) and that this is the ammunition their attorney had in front of the judge.
Lastly, item #3, is just ignorance and/or naivete on the part of the project management team. I don’t know the dynamics out on the job, but someone should have directed that formal notice be given despite what might have been misdirected by the “rah, rah, we’re all workin’ hard on this job, don’t worry we’ll take care of ya” attitude on site.
My story. Notice is probably the most common failure by contractors on recouping monies for changes to the contract. I’ve fallen victim to this also.
My project (there’s more than one) was a wate… Read More >