Specificity in a construction contract is crucial to the project’s success, particularly when it comes to detailing the scope of work. Any ambiguities in the scope of work can lead to some costly payment disputes down the line.
A Florida District Court of Appeals recently dealt with this exact issue: A subcontractor and GC disagreed over the scope of work required under the subcontract. The court ultimately sided with the subcontractor declaring that the scope of work provided by the GC was ambiguous, and didn’t include the work that the GC had intended.
What is a scope of work in a construction contract?
One of the most important provisions in a construction contract is the scope of work section. A well-drafted scope of work should provide, in detail, an outline for everything that’s expected of the contractor, and an overview of the project as a whole. “Detail” being the keyword here.
Deep dive: How to Write a Scope of Work in Construction
Any work that isn’t included in the scope of work would be considered extra, which would, in turn, require additional compensation. To avoid any such additional costs, GCs should take particular care when drafting a subcontractor’s scope of work. However, as a recent case out of Florida highlights, even a presumably well-drafted scope of work may include some ambiguities.
GC fails to provide specifics in a subcontractor’s scope of work
The case in question is F. H. Paschen, S.N. Nielsen & Assoc. LLC v. B&B Site Development
- Owner: US Postal Services (USPS)
- General Contractor: F. H. Paschen, S.N. Nielsen & Associates, LLC (Paschen)
- Subcontractor: B&B Site Development, Inc. (B&B)
USPS hired Paschen as a general contractor to perform work at various locations, including the main office in Okeechobee, Florida. In turn, Paschen hired B&B to perform demolition and paving work for the parking lot of the main office.
Subcontract included concrete pavement replacement, but not asphalt replacement
The various bid documents provided to B&B, contained some inconsistent langauge, by using the terms “pavement” “cement concrete pavement” “existing Portland cement concrete pavement,” and “existing PCC pavement,” interchangeably.
The problem was, that a majority of the parking lot was portland cement, but a portion of the eastern driveway was asphalt, which B&B determined was in good condition and didn’t need replacing.
Subsequently, B&B submitted its proposal without without the inclusion of the eastern driveway. Paschen, however, failed to perform a walkthrough, and accepted B&B’s bid assuming the proposal included the asphalt area. The subcontract that was eventually executed between the parties included no reference to asphalt, only to concrete pavement.
As the project neared completion, Paschen reached out to B&B concerning the eastern driveway. B&B responded by stating that replacing the asphalt wasn’t within their scope of work, and they submitted a proposed work order estimating the cost of additional work at around $33,000. They then proceeded to replace the asphalt to avoid any project delays.
However, after conferring with the architect on the project, Paschen insisted that the asphalt area was included in the cost of the project — and refused payment.
Both parties filed motions for summary judgment, and the court granted B&B’s motion on all three counts. Paschen appealed.
Sub entitled to $33K for out-of-scope work
The Appeals Court ultimately agreed with the trial court decision that the asphalt pavement was not included in B&B’s scope of work.
The Court began by stating that “when the language of a contract is clear and unambiguous, courts must give effect to the contract as written and cannot engage in interpretation of construction as the plain language is the best evidence of the parties’ intent.”
Reading the contract as a whole, the court held that:
“The only reasonable interpretation of the subcontract is that the scope of work did not include the removal and replacement of the asphalt eastern driveway parking low. ‘Asphalt’ and ‘concrete’ are not synonymous terms. Nothing in the contract states that the Sub was required to remove any asphalt from the parking lot. The subcontract did not say that the Sub was required to remove pavement from the ‘entire’ parking lot. Nor did the subcontract describe the specific square footage of pavement that the Sub was supposed to remove.”
The court was not swayed by Paschen’s arguments. Although the subcontract included headings and titles such as “Replace Parking Area” and “Replace Pavement,” the actual provisions governing the scope of work specifically referred only to “concrete pavement” and contained measurements only for the concrete to be removed, with no such measurements for the asphalt area.
Read as a whole, the titles and headings of a contract cannot change the meaning of the agreement when the specifics of the contract state otherwise. Furthermore, even though the scope of work included the phrase “not limited to” the enumerated tasks; this is meant to imply that there may be some unenumerated tasks required to complete the work. But the Court concluded that such phrasing cannot be used to expand the scope of work beyond the contract plans and specs.
Importance of a detailed scope of work in construction contracts
So what went wrong here? Mainly, lack of communication and poor attention to detail.
When there is open communication on a construction project, any disparities between the contract documents, bid documents, and site conditions can be identified and dealt with. When such channels of communication aren’t there, contracting parties must rely on the specifics of the contract terms to determine exactly what needs to be done on the project, to avoid any additional payouts. This is why details are so crucial.
Courts frequently enforce contracts according to the exact terms contained therein. The contract itself doesn’t have to be a long, complicated document — but the scope of work portion should be crystal clear when it comes to what’s expected. Otherwise, you may find yourself spending time and money in court splitting hairs over the difference between concrete and asphalt!