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After-bid Bargaining Prevents Contractor From Recovering Under Estoppel

Monday, February 04, 2008 02:17 pm

After-bid Bargaining Prevents Contractor From Recovering Under Estoppel

A U.S. District Court ruled that a prime contractor's issuance of its own standard subcontract form negated its ability to apply the theory of promissory estoppel in order to hold a subcontractor to its bid.

In its bid to act as general contractor on a Georgia Department of Transportation (GDOT) parkway extension construction project, APAC-Southeast, Inc. (APAC) included Coastal Caisson Corp.'s (Coastal) bid to perform drill-shaft foundation subcontract work. Coastal's bid included terms and conditions releasing the subcontractor for costs incurred as a result of certain subsurface conditions and requiring the contractor to pay standby rates to Coastal in the event of a delay.

After APAC signed the prime contract with GDOT, it submitted to Coastal a written subcontract (a standard form that APAC commonly used) proposing terms and conditions different from those in the subcontractor's bid -- namely, assigning both delay and subsurface condition risks to Coastal. When Coastal balked, the parties discussed and apparently verbally agre [...]

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