Section 4.9.4 Contract and Standard Contractual Provisions

• Library: Construction Law Practice Manual 3rd Edition 2016

§ 4.9.4 Contract and Standard Contractual Provisions

Just as with all situations when the work of different professionals intersect, one frequently encountered contract-administration or enforcement issue for projects awarded via sealed-bid procurement is the relative degree of defect liability between a designer and a builder. Courts generally hold a builder free from liability for defects in plans provided by the government.²³ But the federal government often uses its construction contracts to shift even design risk onto its builders by requiring them to bring to the Contracting Officer’s attention prior to submitting a bid all patent discrepancies or defects in the plans or specifications. The contractor’s failure to do so can constitute a waiver of a claim for additional compensation to correct the defect.²⁴ Negotiated contracts typically shift greater risk of conflicts off to a contractor who is responsible for both the design and construction of a single project.

As with any contract involving an entity, only certain people are authorized to execute contracts to obligate the entity, and the federal government is no exception to this general rule. Only an employee of the federal government serving as a Contracting Officer can execute a services or supply contract.²⁵ Knowing the identity of the Contracting Officer is particularly important when dealing with the government, as the doctrine of apparent authority does not allow for the creation of a contract with the federal government if someone else directs the contractor.²⁶ Only someone with actual authority can bind the government, although Contracting Officers at times have delegated their actual authority to others.²⁷

The Federal Government uses more than 600 standard clauses in various acquisition contracts,²⁸ and it has developed a matrix showing when various clauses are required.²⁹

Perhaps the most powerful clause in...