As one observer put it some time ago, a contractor is a gambler who never gets to cut, shuffle, or deal. It is the general, or prime, contractor who will likely have the multitude of “express” responsibilities to the contract riddled throughout the documents. In the worst cases, this type of language can be pervasive and applied almost in a shotgun pattern designed to drop an (unwary) elephant. The manner in which the various contractor responsibilities and warranties are catalogued, labeled, defined, recatalogued, and repeated for emphasis is most often in very sharp contrast to the way in which the corresponding responsibilities and obligations of the owner and the design professionals have been left to be “implied.” The contractor may be left to look to outside authorities—such as applicable laws and the increasingly nebulous idea of “trade custom”—in order to search for guidance that will specifically define such responsibilities.
In efforts to insulate themselves from liabilities and extra costs that may be born out of defects in the contract or in its administration, the drafters of construction contracts can combine layer upon layer of phrases, clauses, references, standards, boilerplate, exculpatory language, and the like in a scramble to shield themselves from every conceivable issue. This process can continue to the point at which the front-end documents of construction contracts have finally become fatter than the technical specifications themselves.
Ironically, it is an overly enthusiastic abundance of complicated dissertations on the contractor’s responsibilities that more often actually increase the likelihood of confusion and conflict. Such efforts that create such multiple layers of excruciatingly complex language often carry with them a significant risk of conflicting statements and even “requirements” that may be contrary to public policy and be therefore unenforceable. This whole idea, however, often does not seem to be taken seriously by the drafters of our construction agreements. The greater the number of statements made, the more detailed and complicated the statements are, the greater the number of specification interfaces, the greater probability of contradiction—and therefore ambiguities—every step of the way. It’s simple mathematics and probability. A specification that is too fat as far as the front-end (General Conditions and other general requirements) is concerned can have more problems than a specification that might be considered by designers to be “too thin.” It seems that some time ago, the principle of “saying it clearly and saying it once” has given way to “saying it over and over again in different ways and in different places.”
In any event, don’t be shaken by a seemingly overwhelming collection of confusing and exculpatory language. This is not to say that it should be lightly considered. Every word must be read and thoroughly understood. Many inclusions may in fact be very serious and require specific and focused attention. If there is any doubt regarding the applicability, legitimacy, or enforceability of any provision included in your contract, consult with your superiors and possibly with a competent construction attorney. Confirm exactly where you stand with respect to the written word before proceeding.
Besides the strict technical requirements of the work itself, then, the responsibilities of the contractor will generally fall within these categories:
1. Duty to Inquire.
2. Reasonable Review.
3. Plan and Schedule the Work.
4. Lay Out the Work.
5. Supervise, Direct, and Install the Work.
6. Adequate Workmanship.
7. Correction of Patent Errors.
8. Coordination of All Parts of the Work.
9. Review, Submit, and Coordinate Shop Drawings.
10. Properly Process All Contract Payments.
11. Provide Adequate Insurance.
12. Adherence to Safety Standards.
13. Warranty of Clear Title.
1. Duty to Inquire. The bid documents usually require bidders to bring any questions regarding inconsistencies, conflicts, or ambiguities to the attention of the owner and the design professionals prior to the bid. Such requirements may become an elaborate, strained effort intended to shift responsibility onto the contractor for a fundamental rule of contract interpretation: that ambiguities are resolved against the party who drafted the documents. In its practical application, owners and design professionals have often attempted to hide behind the contractor’s “duty to inquire” in even very subtle and hidden confusions and ambiguities in the contract language. In the final analysis, however, it is the obviousness or significance of an ambiguity that may place a duty upon the contractor to inquire about work to request clarification regarding such ambiguity. This may be true whether or not the specific responsibility to do so is clearly called out in the contract language. Certain legal cases have determined, however, that no such duty to inquire was determined to be any obligation of the contractor when the discrepancy in the contract documents was subtle in nature or hidden from a reasonable review.
This is the theory that is generally being applied by the courts, but in arbitration (where the arbitrator is more free to consider an issue in any manner in which he or she sees fit) the foregoing distinction applies probably even more so.
2. Reasonable Review. The contractor is responsible for “reasonable” review of the contract—but it is not responsible for complete search of documents to be conducted with the intent of determining flaws that may or may not be contained within those documents. The contractor is a businessperson performing many diverse and distinct functions every day and is not customarily involved in the preparation, review, or coordination of design work. While the contractor’s daily activities are being performed, one of these activities—bid preparation—is commonly being performed within just a few weeks immediately prior to the respective bid. In sharp contrast are the owner, architect, engineers, agencies, and whoever else had in many cases months or years in which to prepare and coordinate the contract documents. They’ve had enough time (and opportunity) to determine for themselves how the respective portions of the work will be divided so as to ensure that the sum of the parts will in fact equal a whole (completed project). If all that conscientious and time-consuming effort still results in a flawed set of documents, how can it be considered to be reasonable to expect the contractor to discover such defects during the short time immediately prior to a bid?
Because the owner warrants the adequacy of the plans and specifications to the contractor, the contractor should have the right to depend upon those documents. The contractor is therefore normally entitled to assume that the documents are correct [(with the exception of dealing with glaring, patent, and obvious errors as discussed in item (1.) above]. The drafters of the contract had every opportunity to be sure that the contract was correct in every respect before asking any businessperson to sign off to it after a comparatively short review period. It is this concept that underscores the rule of contract interpretation—that ambiguities are to be construed against the drafter.
3. Plan and Schedule the Work. There can very often be any number of ways in which to complete a particular project. The original bid may likely anticipate one reasonable sequence of construction that is apparently achievable, given the technical requirements of the contract and the stated time constraints. Assuming proper design workability, the contractor is normally responsible to anticipate the various components that will eventually make up the whole project in terms of sequence of construction. The interrelationships of each of these components should be determined, and a project plan should be completed as soon as possible. Timetables are added and a calendar is imposed upon the plan in order to transform the plan into a schedule.
If properly prepared, the resulting catalog of items, dates, times, and inter-dependencies will represent a complete method in which to build a project—all as can be reasonably construed from the information presented in the contract documents. It follows, then, that if any item had been misrepresented or confused in the documents, the resulting effect on the progress and schedule may belong to the party who created the original flaw. Such effects may manifest themselves in the form of interruptions, resequences, accelerations, or delays.
It is important to recognize that schedules will change. Courts have begun to more consistently recognize this fact of construction life. Contemporary legal thought regarding construction schedules is that for a schedule to remain valid it must be periodically updated. All significant effects of all parties must be considered; none must be emphasized more than can be justified, and none must be left out for convenience. This consistent recognition of the need for periodic schedule updates is also a recognition of the fact that the details of construction are likely to change periodically as well.
A final thought is that if a schedule is to commit the owner, architect, subcontractors, and suppliers with any level of effectiveness, the updated information must be communicated to and acknowledged by those respective parties in a timely manner, just as with any other proper documentation. Too many contractors seem to take the approach that their construction schedules should be prepared in a vacuum—and even with some degree of secrecy. Schedules are prepared and dictated to subvendors without having allowed evaluation or input by those subvendors. This issue is treated in more detail in the section in this Operation Manual dealing with Project Schedules. For purposes of this section, however, it is important to recognize that this type of closed-door treatment of progress schedules is most often a shortsighted approach that can hurt the entire effect much more than it might help. If, instead, the input, acknowledgement, and even approval of the owner, architect, and subvendors is solicited and achieved, such effort may go a long way in eventually proving the reasonableness of the baseline schedule and of the agreement of all parties to perform according to it. This approach can in contrast be a very powerful force that should not be underestimated.
4. Lay Out the Work. The contractor is normally responsible to physically lay out the work from the baseline and benchmark information provided by the owner, and then to proceed to lay out the remainder of the project. If errors permeate the work as a result of the owner’s error in the beginning data, the contractor might not be held responsible for consequential effects (assuming that its own layouts had been conducted at least to the level of the professional standard to be expected for that activity). This may be true unless it is a type of error that should have been discovered by a competent contractor who is complying with its own professional standard practice.
5. Supervise, Direct, and Install the Work. The first responsibility for supervision of the work is to enforce participation in and compliance with the construction schedule. Progress must be consistent with the commitments and arrangements established throughout the planning and scheduling of the contractor’s activities. This participation is orchestrated beginning with the overall game plan of job sequence, to the placement of field offices, material staging areas, and equipment control, through policing temporary protection and facilities, to the physical installation of the specific job components, and implementation of all close-out activities.
As the work is being installed, it is the methods, techniques, sequences, and procedures that are and remain the responsibility of the contractor. These are specifically different from ownership of the design details’ workability, as described in the section outlining the architect’s responsibilities. In other words, the contractor begins with a legitimate assumption that the job components will in fact fit together (the workability). It becomes the contractor’s assignment from that point to assemble those components in a logical, efficient sequence of activities.
6. Adequate Workmanship. A good specification will incorporate precise tolerances within which the respective work is to be installed, if it is to be considered “acceptable.” Clear descriptions of these parameters will accordingly eliminate any necessity for subjective evaluations. Such clear, nonsubjective descriptions may end arguments before they have an opportunity to blow themselves out of proportion. The quality-control specification for the placement of a concrete floor, for example, may require the finished floor surface to simply “be level,” or it may require the surface to “be level within 1/8″ in 10′ in any direction.”
In the first case, evaluation of performance will be very subjective indeed with respect to the meaning of the word “level.” Does “level” mean “flat”? Can any degree of “waviness” exist in the “level” slab?
In the second case, there is no question regarding the acceptability of the floor as it relates to its “degree” of “level.” All that is needed is to simply measure it. The slab either meets the 1/8″ requirement or it does not. The question of acceptability, in other words, is reduced to arithmetic. It is clearly quantifiable and is not at all subjected to opinion. This type of specification is in marked contrast to one that would have required the same floor slab to merely have been “level.” In the first example, the debate over “level” may last long after the building is occupied.
Lacking a precise technical definition, the next area in which to look for a description of an acceptable level of quality are any industry standard specifications that may have been incorporated into the contract documents by reference. Some standards are more applicable than others. Assuming a precise technical reference, such as requiring a particular weld to “conform to the requirements of AWS (American Welding Society) Code for Welding in Building Construction AWS D1.1-82,” the contractor will still be responsible for the specific, measurable requirements as if they had been directly included in specification language originally.
In the event that no technical specification or reference standard is included in the contract documents, it may be highly unlikely that there would not be some boilerplate expressly requiring the contractor to install the work in accordance with applicable building codes as they relate to that portion of the work. If beyond this the specification was so grossly incomplete as to leave out even these most basic requirements, the law may impose other restrictions. In this regard, the contractor implicitly warrants that the work will be performed in accordance with standard levels of workmanship and within the descriptions of accepted trade practice as defined in the community in which the work was performed. This idea of conformance to community standards cannot, however, be used to excuse the contractor from performing a more stringent requirement if such requirement is unambiguously described in the contract.
Finally, specific procedures outlined in manufacturers’ instructions will in most cases need to be followed precisely if the warranties for those items are to remain intact. If the detailed manufacturers’ information conflicts with the stated contract requirements, the owner and the design professionals should be the ones to make the decision regarding the direction to take. The decision to move away from procedures recommended by a particular product manufacturer is very likely to carry with it definite liabilities. These decisions are therefore left with other parties, if at all possible. Barring this type of conflict, the manufacturer’s directions will generally take precedence over other noted instructions.
7. Correction of Patent Errors. In most cases, contractors do not bear responsibility for the designer’s or owner’s errors in the contract documents. This is true unless the errors are so obvious or glaring (patent) that a competent contracting professional should undeniably have discovered them through a reasonable review. Therefore, where it can be demonstrated that an error can be considered to be patent, the contractor has a clear duty to bring such an error to the attention of the owner prior to bidding—or at the very least immediately upon its discovery.
For example, a Mason contractor’s experience will likely be that most (if not all) cavity walls that he or she has ever constructed have had some kind of through-wall flashing integral to the design. If the design detail on a particular project shows no through-wall flashing of any kind in any cavity wall, the defect in the design may be considered to be so obvious to an experienced (reasonably competent) masonry contractor that it will be considered to be incumbent upon that contractor to bring the design flaw to the attention of the owner. It remains, of course, that the definition of what qualifies as “obvious,” “glaring,” or “patent” is the fertile gray area that may itself defy easy resolution. In such a situation, the discussion of trade custom and usage may be most relevant.
8. Coordination of All Parts of the Work. The word “coordinate” can too often be used in an attempt to stretch the contractor’s responsibility with respect to the contract documents. In its worst case, the word can be used to abuse. Dictionaries define the verb “coordinate” as “to arrange in order” and “to harmonize in common action or effort.” In as many dictionaries as I have consulted, I have not been able to locate the definition of “to find the mistakes made by others and to correct them at no additional cost.” All too often, this, however, seems to be the definition that some owners would have if the contractor would allow it to be.
The coordination activities that a general contractor is responsible to perform as they relate to the construction process amount to:
1. Assembling pertinent information from all sources that may possibly affect a certain portion of the work.
2. Correlating that information with the respective specific job requirements as indicated in the contract.
3. Distributing relevant information to those requiring it in time to incorporate the information in their own work.
All of these activities must be accomplished while meeting the constraints imposed by the current progress schedule. The general, or prime, contractor is in a real sense nothing more than a conduit in this regard. “Coordination” becomes an ongoing mechanism by which defects in the contract documents may be exposed in time to avoid expensive impact on the project. “Coordination” is not the vehicle by which contractors become responsible for mistakes in the design. Do not let it become one.
9. Review, Submit, and Coordinate Shop Drawings. Technically, this activity of shop drawing review, submission for approval, and distribution should be included in item (8) above, “coordinate,” but is given special treatment here because as a contractor activity it is one of the most common and time-consuming. It is also one that affects virtually every component of every project.
Shop drawings submitted for approval must clearly and comprehensively describe the specific product(s) that they represent without ambiguity. They must include the exact information regarding how those respective products interact with the other parts of the work. Where differences exist between the item being submitted for approval and that which is specified, such differences should be highlighted in a manner that will allow their specific consideration without the risk of oversight. Failure by a contractor to note or otherwise highlight such differences will not likely relieve such a contractor from the responsibility for those differences, even if the submission bears the architect’s formal approval.
The contractor is responsible to coordinate all dimensions insofar as necessary to install the work properly relative to the surrounding construction. The contractor is not normally required to invent dimensions, providing dimensions originally missing from the design. That is the architect’s responsibility. If a structural steel shop drawing detailer, for example, takes upon himself or herself to decide upon the column location as might seem to be logically correct but not necessarily as a result of calculation or extrapolation of other data on the plans, such a determination must be called to the attention of the designer for that designer’s verification and approval. Otherwise, the detailer, and therefore the contractor, may likely bear the full responsibility for how well (or how poorly) that “missing” dimension fits within architectural, plumbing, ductwork, finish work, or other considerations.
Finally, the confirmed and approved submittal information must be forwarded to all who might require it in time to incorporate it without interrupting its other activities. If an approved pump, for example, is mounted on a beam and requires 208-V three-phase power, the information must be distributed to all affected subcontractors in time to allow them to complete their shop drawings for the affected items. The rule to remember is “when in doubt, send it.”
10. Properly Process All Contract Payments. The contractor is normally responsible for payment of all costs directly related to the physical completion of the work (once having been paid for such work by the owner). These include the cost of labor, materials, equipment, tools, machinery, transportation, and sales and consumer use taxes. In addition (in a straightforward lump sum general contract arrangement), the responsibility for all costs to provide for all items necessary and incidental to the work, such as temporary heat, light, utilities, etc., is also likely to be included. This description is as it is on many construction projects. Know, however, what the specific requirements are on the particular project, and manage them accordingly.
Beyond the absolute responsibility, most construction agreements normally require that the contractor make payments to its subvendors in the manner and to the same extent that payments for the work of those subvendors has been made by the owner to the prime contractor.
The pay-when-paid clause, long a staple in many contracts between the general contractor and subcontractors on both private and public work, has been challenged in recent years. In some states, the clause has been declared null and void. Thus, it’s best to check the state statutes before withholding payment from a subcontractor, if and when this situation arises in the state in which you are currently working.
The Federal Miller Act requires contractors to post a payment bond on federal construction projects, but this requirement also has “pay-when-paid” implications. In a 2001 case, Walton Technology v. Westar Engineering, the subcontractor sued the contractor under the Miller Act, requesting payment even though the general contractor had not been paid. The federal appeals court ruled that the surety was responsible despite the contractor’s “pay when paid” clause, so the subcontractor was able to reclaim the amount owed by the general contractor by utilizing this “call on the bond.”
11. Provide Adequate Insurance. As a standard article in construction contracts, the contractor will be required to obtain predetermined amounts of insurance coverage prior to allowing any work to begin at the site. Such insurance coverages will normally include:
1. Worker’s compensation insurance.
2. Fire and extended coverage insurance against fire and other risks normally included in standard coverage endorsements.
3. Public liability and property damage insurance.
4. Contractor’s protective public liability insurance covering the operations of subcontractors.
5. Automobile insurance for owned or hired vehicles.
12. Adherence to Safety Standards. The contractor is responsible for regularly, at all times, and without the need for any specific notice to take all necessary precautions for the safety of all individuals on the construction site. Safeguards for the protection of both the workers and the public as may be required by job conditions, progress of the work, and applicable authorities such as OSHA may include warning signs, barricades, scaffolding, lights, fire extinguishers, proper ladders and walkways, and similar items. Workers are to wear hard hats and proper clothing and use correct safety equipment (harnesses, etc.) in appropriate situations. Contractors should be thoroughly familiar with the requirements of an adequate safety and loss control program and treat the whole issue of safety as its highest priority.
13. Warranty of Clear Title. This contractor responsibility is most often in the form of an express warranty located within the General Conditions or other similar section of the contract documents. The guarantee of clear title is the owner’s assurance that the project is free of liens or other encumbrances on all materials, labor, and equipment incorporated into the work. A typical clause in such contracts may read as follows:
“The contractor represents and warrants that the title to all work, materials, and equipment for which payment shall have been made to the contractor shall vest in the owner upon said payment, free and clear of all liens, encumbrances and adverse interests of any kind whatsoever; however, the contractor shall remain liable for damage and loss to said work, materials, and equipment, until such time as the Project is fully completed and accepted by the owner, and final payment is made pursuant to the contract.”
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