Daily News reporter Jenny DeHuff has a story about how the $50 million Dilworth Plaza renovation project has been delayed 10 months and that the City is paying the general contractor an additional $5 million because of the delay. According to Mayor Nutter’s spokesman the reason for the delay is:
“We understand that the project managers and their contractors found some stairwells and other things that were not in the original plans, and that required more time.”
This simply never should have happened. A construction contract should ALWAYS include an “existing conditions” clause requiring the contractor to visit the site and to make itself familiar with the existing conditions, it should require that the contractor immediately alert the owner of conditions that conflict with what is shown on the drawings, and state that the owner makes no warranty as to the accuracy of the as-built drawings. While it is true that a contractor is entitled to compensation for “latent” or hidden defects, stairwells are not latent and are pretty obvious. In Pennsylvania, as in most other states, failure to resolve such patent conflicts prior to entering into a government contract results in the claim being waived.
It is almost incomprehensible that the owner-contractor agreement would not contain an existing conditions clause or some similar language requiring the contractor to visit and inspect the site and to accept it in its current condition. Perhaps the City of Philadelphia and Center City District are suddenly flush with cash and giving away $5 million is no big deal or perhaps the City does not know what should have been in its contract.
(Update 12/4/13: If the City of Philadelphia SCR – standard contract requirements were used, then the contract for Dilworth Plaza would have included an “existing conditions” clause. The City SCR states that “Bidders shall examine the in detail the Project site and shall acquaint themselves with the conditions affecting the work under the contract and the overall Project, and, when applicable, the conditions of walls and foundations of overlaying and adjacent structures, the character of the paving, and the soil and subsurface soil. The Bid shall be prepared with due regard to the provisions of the Contract Documents and to the conditions existing or to be anticipated at the Project site.”
The SCR also state “If a Bidder discovers or encounters any ambiguity or discrepancy in the Contract Documents in the course of preparing its Bid, the Bidder shall promptly notify the Department of the ambiguity or discrepancy prior to the date and time for receipt and opening of Bids. The City, so advised, may, at its sole discretion determine whether such ambiguity or discrepancy exists and whether any corrective action is necessary.”
Moreover, paragraph 84 of the SCR seems to directly address the issue that caused the City to fork over $5 million. It states: “Completeness of Data. The term “structures” used in these Standard Contract Requirements shall apply to all surface, underground, and above-ground structures of whatever character within the Project site or immediately adjacent thereto, including buildings situated in or adjacent to the excavation. Where these structures are shown or indicated on the Plans, the information provided is in accordance with the information in the possession of the Department, but is approximate only. Such data are not warranted or guaranteed by the Department to be either complete or correct, and the Contractor shall and must assume, and adjust its Bid to account for, all risks resulting from conditions in the field that differ from the approximation shown.”
So, either the City’s SCR’s were not used or the City chose to ignore them. Either way, the question is why?)
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
