Under public contracts, your right to payment is like raw meat. If immediate steps are not taken to preserve it, it can turn from a valuable asset into a decaying mess.
On public projects, you can protect your profit margin by immediately preserving your rights when changes occur. If this does not consistently happen in your organization, it’s likely for one of two reasons. First, you might be failing to identify the change. Second, you might be failing to respond to the change.
Restricted site access is one common change that is frequently overlooked. It should almost always call for a time extension, and in most cases, for reimbursement of extra costs. However, this issue is routinely neglected until it’s too late for the tenderloin.
Are you identifying site access restrictions?
Site access does not disappear in a vacuum. A jobsite is often only partially restricted, or restricted for a certain purpose, and sometimes for multiple, complex reasons.
For example, the contractor in Moorhead Construction Company v. Grand Forks was (eventually) awarded its extra costs for Phase II contract work, after Phase I (earth work and site preparation) was completed both late and defectively. As a result, soil conditions were softer than specified at the end of Phase I, which prevented the Phase II contractor from using its heavy equipment, and required it to use more expensive methods to access the lagoon bottoms and embankments. The federal appeals court specifically recognized the contractor’s early, written, consistent communications in affirming payment to the Phase II contractor.
Site access involves more than an owner obtaining timely permits and right-of-way easements. The Moorhead case is an example of site access overlapping with differing site conditions. In addition, site access regularly involves:
- Unfinished preceding work
- Unanticipated utilities, including utilities that aren’t relocated on time
- Severe or unusual weather
- Changes to seasonal hauling restrictions
- Environmental regulations
Each of these situations can cause:
- Project delays
- Liquidated damages
- Lower production
- Idle crews
- Idle equipment
- Extra mobilizations
- Impact to other jobs
The government benefits from low, competitive bids, estimated by making reasonable assumptions about site access. Under most public contracts, extra costs and delays caused by unexpected site access restrictions are the government’s responsibility, particularly if the restriction is not disclosed in the contract.
You will benefit by recognizing site access as a distinct issue because different issues implicate different rights, and may require different responses to preserve those rights.
How (and when) are you responding to site access restrictions?
You won’t know the full impact for weeks or months. It’s easy to put your response on hold until you know whether the magnitude of the situation warrants a response. By that time, your claim may be releasing a slight odor.
The key is to plan a response that is both automatic and easy, so that it happens quickly, every time. At a minimum, remember three things when you encounter unexpected restricted site access:
- Write early.
- Write often.
- Be consistent.
Write the Engineer early and often. As a practical matter, it is your burden to enforce your rights. Most public contracts require contractors to meet various deadlines or risk waiving important rights, sometimes even to document a lack of response by the Engineer. Keep correspondence clear, to-the-point,
Be consistent. This requires that you quickly learn the facts and understand your rights, so that you can document these consistently, and correctly.
Site access restrictions are often beyond the contractor’s control. Responding quickly and consistently to site access issues will help you find more and better options in your freezer. Happy grilling.
Build it right. Keep it real.
© 2013 Welle Law LLC. No unauthorized use or reproduction.
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.