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Hold Your Breath: Govt. Can Revoke Its Acceptance Of Your Work After Almost A Year

Friday, September 04, 2009 06:06 pm

Hold Your Breath: Govt. Can Revoke Its Acceptance Of Your Work After Almost A Year

When the government becomes dissatisfied with work it has already given its stamp of approval, it can't take its sweet time deciding to revoke acceptance of that work. But there's no precise formula to indicate how long is too long. This case illustrates what constitutes dragging ones heels.

The government awarded American Renovation and Construction Company (ARC) two design-build contracts, amounting to approximately $26 million. The work involved the phased construction of 194 military housing units at Malmstrom Air Force Base in Montana. Sometime after the government had accepted the work and occupied the units, several front door stoops, garage walls, driveways, sidewalks and other areas of construction showed evidence of sinking. Inspections revealed heaving slabs, settling backfill and drainage problems.

As a result, the government revoked its acceptance of the work and terminated both contracts for default. The government claimed that it acted properly due to latent defects in the work, gross mistakes amounting to fraud, and ARC's failure to deliver the required as-built drawings or to accomplish warranty repairs to solve the construction problems

Design/build doesn't mean do it any way you like

Because these were design/build contracts, the government believed ARC was responsible for the design

ARC, on the other hand, contended that it had provided what the government wanted and "it didn't work." ARC acknowledged the defective workmanship, but argued that the government's specification of slab-ongrade construction in an area of fat clay had caused the deficiencies. (A slab-on-grade is a concrete slab placed directly on the soil and supported by the soil.) However, ARC provided no objective evidence to show that the slab-on-grade construction was defective.

On the flipside, there was plenty of evidence that ARC did not follow the government's specifications to the letter, as the co [...]

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