Today, we have a question for our federal construction readers:
If your project is operating within an anticipated budget, are you still entitled to the additional costs associated with a differing site condition?
Recently, the Civilian Board of Contract Appeals (CBCA) answered our question with a resounding yes.
This point is particularly important in the context of requests for equitable adjustments or claims asserted against the government. You may think (or the government may try to convince you) that there is no entitlement when the project is below budget. That is simply not the case. The CBCA decision makes the point that damages are based upon the actual cost of performance — your bid should not be used against you. In short, extra costs due to differing site conditions should always be tracked and documented — even if you are meeting or below a projected budget.
The case in question involved construction contractor Tucci and Sons Inc., which filed a claim seeking more than $80,000 on a DOT Federal Highway Administration (FHWA) contract for the reconstruction of a 9.7 mile stretch of highway in Mount Rainier National Park. Tucci claimed that it experienced extra costs based on the unexpected need to work around a number of larger boulders impeding the work.
Keep reading this article at: http://www.mondaq.com/article.asp?articleid=470494