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Confused Contractor Fails To Gain Clarity Or Its Full Pay Check

Wednesday, June 04, 2008 03:00 pm

Confused Contractor Fails To Gain Clarity -- Or Its Full Pay Check

Reading contract documents carefully is worth every penny. In this case, a contractor, under a false assumption about the contract requirements, suffered a payment deduction of $175,000 the Armed Services Board of Contract Appeals refused to cancel.

Fox Construction Inc. (Fox) inked a contract with the Naval Facilities Engineering Command (the Navy) for a Naval Air Facility construction project that included modifications to ditch irrigation canals. Some, but not all, of the ditches at the site belonged to the Imperial Irrigation District (IID). The Navy excluded these IID-owned ditches from the contract with Fox, as it planned to pay IID directly to perform all required work on its own ditches, according to bid solicitation documents. Fox, misunderstanding this exclusion, did not include any amount for ditch work in its bid. When Fox failed to perform work on ditches not owned by IID, the Navy issued a deductive change to the contract, and the two parties wound up in a payment dispute.

Some of the work, done under protest, doesn't satisfy

A year into the contract, when the Navy realized Fox had made no progress on the non-IID ditches, the contracting officer informed Fox that the Navy would withhold payment if the contractor did not perform the ditch wo [...]

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