In low bid construction, how do you plan for unanticipated events with unknown price tags?

Welle Law Construction Law BlogCosts Will Change

In low bid construction, projects can cost more than expected due to differing site conditions, design errors, or delayed site access, just to name a few of the items that are difficult to include in your bid.  Increased costs, however, are not limited to equipment and labor expenses on the jobsite.

For instance, if you want to do anything about labor and equipment costs, you have to decide whether to invest even more valuable time to try to minimize those costs.  This could include your time, or your project managers’ time, which you probably prefer to be spent bidding or building the next job.

Sound familiar?  Now try adding legal costs to the equation.

Raise or Fold?

The greatest impediment to making an informed decision is lack of information.  When deciding if or how to use an attorney, how do you choose between the unknown potential costs of doing nothing and the unknown costs of calling your attorney.

For example, imagine your dirt crew isn’t meeting specified compaction.  It could take one or several weeks to take soil borings, analyze the results, meet with the engineer, and decide how to respond.  On day one, you do not yet know if the engineer will support you, how long the issue will tie up your resources, or if any costs will ultimately be your responsibility.

Is this a $3,000 decision, or a $300,000 decision?  Will you spend $3,000 or $300,000 responding?  In low bid construction, it’s important to know–but you are often called upon to respond with little or no information about either of these numbers.

Another Option

Lack of information does not lead to better decisions.  It leads to fewer decisions.

Important decisions must often be made before you know the potential cost of the issue, or the potential cost of the response.  That is precisely the moment when your contract requires you to act.

Welle Law will help contractors work through this paradigm by quickly helping to assess both (i) the potential project costs and (ii) the actual legal costs.  Costs are a fundamental part of every legal strategy, and must be carefully weighed by you and your attorney when deciding if or how to respond when your project costs are undoubtedly and unpredictably changing.

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This blog is for informational purposes only and should not be interpreted as legal advice. You should contact your attorney regarding any particular issue or problem. Nothing on this website creates an attorney-client relationship between Welle Law LLC (or any of its attorneys) and the reader.

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