Case Study on "Arbitration Panel: Construction Contract Complaint"

Case Study 5 pages (1360 words) Sources: 4 April 28, 2019

[EXCERPT] . . . .

A case study concerning a construction contract where the construction company is filing a claim

Gilbert Construction Co. Inc. (GCC) v. U.S. Government Bureau of Reclamation

The issue

GCC, the contractor on the contract with the Government to build the Las Lomas Canal as per the design provided by the government through their “contracting officer” Wellington Engineering Company (WEC), made a claim requests on an equitable adjustment to the price and the time of the contract, which was as a result of cracking at the liner, which GCC had refilled. The project owner, U.S. Government is against this claim and thus, the issue proceeds to an arbitration council.

Introduction

It is the common norm that construction projects have unique and significant reliance on the law. This is because the average construction project has numerous entities that are independent and they combine through the specific knowledge and expertise towards the completion of a singular goal. In addition to the challenge of bringing together the synergies of the various entities for the successful completion of the desired goal is the reality that any project has finite resources and time. As a matter of fact, time and resources are defined in the contract and the constraints of each are experienced by each party (Hild, 14). Given that the constraints of the contract are defined within the legal contract, it is also true that the same provides remedies for the failure to perform within the defined constraints, or within the law within the jurisdiction within with the project is implemented.

It is a settled matter that a contract binds and play to the benefit of, and only, the parties involved. Therefore, the liability for professional negligence may at time accrue to third parties. third parties that happen to have a claim against any alleged negligence within the terms of a contract are normally limited to the direct third-party beneficiaries, as opposed to indirect third-party beneficiaries (Hild, 19). To this effect, in the specific case under analysis within this paper, WEC will be an interesting third party for it bears direct benefit to the project and its implementation. In this paper, I will present an argument in favor of GCC and why their claim should succeed.

Overview of the issue

It is a fact agreed by both parties that there was a crack in the top of the liner. According to GCC, the lining cracks are as a result of expansive and dispersive canal subgrade soils and also that the soils where to satisfactory to the required refill standards. in addition, the design drawings provided by the project owner through WEC were defective and/or the representative of the government in the project (WEC), failed it its supervisory role in inspecting and/or quality control as was required in the provisions of the contract. The Government refutes these claims and argues that there is no evidence to show that the soils used for the refill were substandard.

Argument for GCC’s claim

According to the U.S. contract law, delay claims can either be excusable or inexcusable. A delay must be excusable for it to qualify for the extension of time and/or additional compensation. For delay claims to be excusable, they are normally defined in the contract, and beyond the control of the contractor (Schumacher, 11). An example of such is design error and/or omissions, changes initiated by the owner. In this case, therefore, the primary question is whether the cause of the crack in the top lining was as a result of owner error or/and omission.

It is a common fact that there were cracks at the top liner of the concrete. According to GCC, this was a result of poor design drawing and the subgrade soils used. According to the contract, it was the responsibility of the owner to provide the design and the materials to be used for the project, including how the materials where to be used. According to the plaintiff (GCC), they included patterned horizontal and vertical tooled indentations in the concrete which were meant to prevent water seepage and thus control cracking along the indentations (GCC, 3). This argument counters the project owner’s… READ MORE

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