By John Swansinger, Partner in the Real Estate and Construction Practice Group at
Buckingham, Doolittle & Burroughs
We have a big problem. We won a contract to build a new army base. The Army’s construction manager has issued countless unilateral changes that are upsetting our work. The base we thought we were building is now turning into the Taj Mahal. The constant changes to get there are killing our productivity. In some cases we don’t have the capacity to perform or the time within the contract to complete it. If we keep trying to pacify the Feds, we would go under. We are headed for a showdown. We want to tear up this contract and start over.
Stay cool, Sweat. While you should always be proceeding in the diligent performance of your work, you may have an escape hatch: the “Cardinal Change Doctrine,” which is often applied to Federal projects. The “Cardinal Change Doctrine” has been defined many ways but essentially gives the Contractor an out when a change or series of changes pile on to fundamentally alter the scope of the work. Under the doctrine, you are able to avoid the contract if: (i) is there a significant change in the magnitude of the work; (ii) is the change designed to alter the quality, character, nature or type of work contemplated by the original contract; and (iii) does the cost of the work ordered greatly exceed the original contract cost? Wipe off your brow, gather the info and ask your lawyer to give it a look, Sweat. YouDig?