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Be Sure You're Seeing Real Contract Discrepancies Before You Put Your Reading To The Test In Court

Thursday, September 04, 2008 03:42 pm

Be Sure You're Seeing Real Contract Discrepancies Before You Put Your Reading To The Test In Court

The United States Department of Veteran Affairs (VA) hired S & M Management Incorporated (S&M) to replace steam lines at a health care system campus in New York. Upon final inspection of the completed work, the contracting officer notified S&M that a number of punchlist items were still outstanding and gave the contractor 30 days to complete them. The punchlist items included missing or damaged manhole compensators, incorrect pipe insulation and faulty installation of two manholes.

An argument between the two parties ensued as to whether S&M was due payment for undertaking the above work as a change or whether the VA was due any costs over the allocated amount for completing the punchlist items itself. The VA sought a ruling that S&M was required to address all the disputed punchlist items; S&M responded that it had completed all required project work.

The Court of Federal Claims granted the VA's summary judgment in part and denied it in part because S&M was successful regarding some punchlist items and unsuccessful regarding others in demonstrating that it had completed the proper work. S&M's troubles came down to contract — especially specification — interpretation.

Wrong: Don't unduly restrict your reading

The contract's "like effect" clause sta [...]

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