Scope Claims

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When a contractor or subcontractor is terminated for default, the terminating party may seek its damages for completing the defaulted contractor or subcontractor’s scope of work. The cost to complete the work will almost always exceed whatever money was left in the contract to complete the work.

Construction contracts will often expressly allow the terminating party to obtain the above excess completion costs. And under Florida law, “controlling weight should be given to the actual expenditures, made in good faith, that are necessary to complete the job covered by the original contract.” R.K. Cooper Builders, Inc. v. Free-Lock Ceilings, Inc.

But what happens when the excess completion costs include the cost to construct a second building when only one building was contemplated under the parties’ contract?

Will those excess completion costs be considered a form of consequential damages that may be barred under the parties’ contract? A federal court recently considered that question in United States ex rel. Sustainable Modular Management, Inc. v. JE Dunn Construction Company.Continue Reading Does a Consequential Damages Waiver Bar the Recovery of Completion Costs?

Disputes regarding a contractor’s scope of work are common. Frequently, there are times when a contract or solicitation is unclear as to whether a certain item of work is within a contractor’s scope. (Click here for the six most common contractor claims, which includes change-in-scope claims.)

In federal government contracts, if a contract is ambiguous as to whether a contractor must perform a specific item of work, the issue may turn on whether it was a patent or latent ambiguity. A patent ambiguity is one that is readily apparent or obvious. In contrast, a latent ambiguity is one that is hidden or could not be discovered through the exercise of reasonable care.

The distinction is important because if an ambiguity as to whether a contractor has to perform a specific item of work is patent or obvious, the contractor has an affirmative duty to seek clarification before submitting its proposal. If the contractor fails to seek clarification, the ambiguity must be construed against the contractor.Continue Reading Change-in-Scope Claims: Patent vs. Latent Ambiguities

Change-in-scope claims are one of the most common contractor claims. Typically, scope disputes center on whether work that the owner directed a contractor to perform was part of the original scope of the contractor’s work. If it was part of the original scope, then the contractor may not be entitled to additional compensation or time to perform that work. But if it was out-of-scope work, it may be a breach of contract for the owner to refuse to pay for that work.

At times, scope disputes can result in the termination of the parties’ contract. That’s what happened in a recent dispute between the federal government and a contractor in GSC Construction, Inc. v. Secretary of Army.Continue Reading Federal Court Rejects Scope-Change and Time-Extension Claims