Seven Things to Know Before Entering a Government Construction Contract

These timely tips will lead to your successful performance of a government contract and provide the customer with services or products to meet their essential needs.

1.     Understand the contract. This is key to preserving your rights and identifying potential risks by thoroughly understanding your obligations under the contract. The best time to evaluate your rights and obligations is before you submit your proposal.  Obtain clarification from the Contracting Officer of any ambiguities in bidding documents. The Contracting Officer is a government employee who has the authority to enter into, administer, and/or terminate government contracts and make related determinations and findings. You must address patent ambiguities and other solicitation defects prior to submission, or you risk waiving your rights to file a bid protest with the US Government Accountability Office.

2.     Review and understand your rights and obligations under the key Federal Acquisition Regulations (FAR) Construction clauses: These key terms and conditions govern your and the government’s rights under the contract. Without knowledge of these terms, you will not be able to preserve your rights to recoup costs that are attributable to the government. They include: “Changes,” “Differing Site Conditions,”“Defaults,”  “Inspection,” “Permits and Responsibilities,” and “Suspension of Work.”  Most FARs have specific requirements for how and when you must raise these issues.

3.     Identify common causes of extra work. Besides formal changes for added or changed work authorized by the Contracting Officer, you may be entitled to cost and schedule relief based on the facts and circumstances which may not be readily apparent, known as “Constructive Changes.” These changes may result from defective specifications or from instructions or contract interpretations by Government representatives who may believe such guidance may restate the contract requirements but in fact require more costly work and added time than contemplated. To preserve your rights, you must notify the Contracting Officer in writing of the constructive change and allow the Contracting Officer to rescind or confirm the direction.

Extra work may also result from unanticipated or differing subsurface or other site conditions. It is important to document and understand the pre-bid site conditions and contract representations to prevail in a claim.  Delays and added costs may be incurred based on the Contracting Officer’s acts or failure to act and failure of the Contracting Officer to provide a schedule extension and require the schedule to be accelerated may result in a constructive change. Unwarranted rejection of work by government inspectors may also constitute a constructive change.

4.     Notify the Contracting Officer of potential changes. It is essential to avoid Contracting Officer denial of claim based on prejudice to the government or that you have already acquest to the change. Develop a checklist of the notice periods and form of notice for key FAR Construction clauses: ”Changes,” “ Differing Site Conditions,” “Inspection,”  “Permits and Responsibilities,” and “Suspension of Work” to provide for timely notice of the potential change.

5.     Know the responsibilities of each government representative. The Contracting Officer and in some cases the Contracting Officer’s authorized representative have actual authority to issue change orders. Government Site Representatives and Inspectors do not have authority to issue change orders, but their directions or actions may cause a constructive change. You must notify the Contracting Officer in writing of any such change.

6.     Develop a Key Document Retention System. Create a complete history of events from pre-bid through contract performance to document the facts needed to establish the basis for equitable cost and schedule relief. Retain essential Pre-bid documents including all documents incorporated by reference in the RFP. All requests for clarification of the solicitation should be in writing and documenting all discussions with the customer. Differing site conditions are a common cause of added costs. Document the pre-bid site inspection with memos, photos, or video tapes of the site examined and conditions observed.  Establish uniform logs for all contract correspondence and a job site log recording job progress of the work and dates for completion of key events in the work completion. Your project manager should document anything that may result in added costs.

7.     Submit your claim. For claims over $100k, you must certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of your knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the Government is liable; and that you are duly authorized to certify the claim. The claim should contain the following: A factual statement of your claim, with as much detail as necessary to fully present your position; quotation of key documents, contract clauses, relevant reports by experts, illustrative graphs, drawings and photographs; and a thorough discussion of the legal and contractual basis for the claim, demonstrating why the facts you have presented entitled you to equitable relief.

In summary, there are many legal issues that arise in all phases of the construction contract acquisition process. Galvanize Law offers a free initial consultation to address your legal concerns and preserve your rights to pursue a claim. Contact us to learn more.

This article was written by Bob Strauss, Esquire. Mr. Strauss was previously Senior Counsel with the Raytheon Company and has over 40 years of experience in Government Contract Law.