Smith, Currie & Hancock's Federal Government Construction Contracts: A Practical Guide for the Industry Professional, Second Edition
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More About This Title Smith, Currie & Hancock's Federal Government Construction Contracts: A Practical Guide for the Industry Professional, Second Edition


Federal Construction Law for Construction Professionals

Any firm intent on benefitting from the boom in federal government construction contracts must navigate an increasingly complicated and demanding set of laws, regulations, and practices that govern these projects and the contractors performing them. To help guide you through this maze, here is the updated edition of the easy-to-understand guide to the practical reality of these special requirements, and how managers and owners of construction industry firms can use them to effectively avoid pitfalls on current projects and compete successfully for new projects.

Smith, Currie & Hancock's Federal Government Construction Contracts, Second Edition walks the reader through actual federal contracts, highlights critical clauses, and simplifies governmental and legal jargon to provide ease of use by the nonlawyer.

Updates to this Second Edition include:

  • Coverage of the newly enacted American Recovery and Reinvestment Act of 2009

  • Specifics of federal government grants to state and local public construction contracts

  • New insights on Design-Build, Early Contractor Involvement (ECI), BIM, Green Construction, and Web-based project management techniques used by the federal government

  • A revised look at the increasingly detailed business ethics and compliance program requirements for contractors and subcontractors as mandated by the federal government for its contractors

  • A unique Web site at provides the user with a Table of Acronyms and Terms commonly found in federal government contracts, an extensive list of Web sites of interest to federal government construction contractors, checklists, sample forms, as well as specifications related to innovations in project delivery

By making transparent the many rights, risks, and legal responsibilities involved in a federal government construction project, Smith, Currie & Hancock's Federal Government Construction Contracts, Second Edition provides construction industry professionals—from general contractors, subcontractors, and designers to surety bond agents—with the insight and understanding they need to avoid problems and run a successful project from start to finish.


Thomas J. Kelleher, Jr., Lead Editor, is Senior Partner with Smith, Currie & Hancock LLP and Editor of Common Sense Construction Law, Third Edition.

Thomas E. Abernathy IV, Coeditor, is a Partner with Smith, Currie & Hancock LLP and a past chair, American Bar Association, Section of Public Contract Law.

Hubert J. Bell, Jr., Coeditor, is a Partner with Smith, Currie & Hancock LLP and a past chair, American Bar Association, Section of Public Contract Law.

Smith, Currie & Hancock LLP, founded in 1965 and with offices in Atlanta, Georgia; Charlotte, North Carolina; Tallahassee and Ft. Lauderdale, Florida; Las Vegas, Nevada; and Washington, D.C., has nationally recognized practices in the areas of construction law, government contracts, and environmental law. The firm represents clients in all fifty states, as well as Mexico, Canada, and South America, Europe, Africa, and Asia.


Foreword xix

Preface xxi

Introduction xxv

Author Biographies xxvi

1 Federal Government Contracts and Commercial Contracts: A Brief Comparison 1

I. Government Construction Contracting Process: An Overview 1

II. Relationship of Commercial and Government Contract Law 7

III. Sources of Federal Laws Affecting Government Construction Contracts 9

IV. Procurement Integrity and Standards of Conduct 18

Appendix 1A: A Brief History of the Disputes Process in Government Contracts 41

2 Authority to Bind the Government, Contract Financing, and Payment 45

I. Authority of Government Employees or Agents 45

II. Availability of Funding 59

III. Contract Payment Procedures 67

IV. Government Setoff/Debt Collection Rights 72

V. Assignments/Novations 73

Appendix 2A: Sample Letter to Contracting Officer Requesting Clarification on the Scope of an Authorized Representative’s Authority 77

Appendix 2B: Notification of Potential Changes by a Contracting Officer’s Representative or Other Government Representative 78

Appendix 2C: Limitation of Government’s Obligation (May 2006) 79

3 Contract Formation 91

I. Basic Principles of Contract Formation 81

II. The Government Procurement Process 85

III. Competing for the Award 87

IV. Bid Guarantees (Bonds) 96

V. Responsive Bids and Proposals 99

VI. The Evaluation Process 103

VII. Late Bids and Proposals 119

VIII. Relief for Contractor Bid/Proposal Mistakes 121

IX. Bid Protests 124

4 Contract Types 143

I. Introduction 143

II. Organization of a Typical Construction Contract 144

III. Project Delivery Categories 144

IV. Indefinite Delivery Contracts 154

V. Pricing Categories 159

VI. Options 167

VII. Project Delivery and Contract-Type Risk Analysis 169

VIII. Building Information Modeling 169

5 Socioeconomic Policies 177

I. Introduction 177

II. Small Business Contracting Programs 178

III. Equal Employment Opportunity and Affirmative Action Programs 198

IV. Buy American Act 200

V. Labor Standards 204

VI. Environmental Laws 212

VII. Employee Safety and the Occupational Safety and Health Act 214

Appendix 5A: SBA Program Requirements for Joint Ventures and Subcontracting 219

6 Government Contract Interpretation 221

I. Importance of Contract Interpretation 221

II. Goal of Contract Interpretation 221

III. Circumstances Surrounding Contract Interpretation 225

IV. Resolving Ambiguities 230

V. Allocation of Risks and Obligations 234

VI. Standard FAR Clauses Affecting Allocation of Risks and Contract Interpretation 244

VII. Interpretation of Subcontracts under Federal Contracts 247

Appendix 6A: Sample Table of FAR Clauses with Flow-down Requirements 251

7 Differing Site Conditions 255

I. Historical Overview 255

II. Federal Government Contract Clause 257

III. Recovery for a Type I Changed Condition 259

IV. Recovery for a Type II Changed Condition 262

V. Other Conditions: Weather and Quantity Variations 265

VI. Factors Affecting Recovery 268

Appendix 7A: Site Investigation Checklist 278

8 Contract Changes 281

I Purpose of the Changes Clause 281

II. FAR Changes Clause 283

III. Authority to Issue Changes 290

IV. Express Changes: Bilateral and Unilateral 295

V. Constructive Changes 299

VI. Cardinal Changes 306

VII. Value Engineering Changes 309

VIII. Prerequisites to Recovery 312

IX. Novations 322

Appendix 8A: Value Engineering—Construction (Sept. 2006) 324

9 Delays, Suspension, and Acceleration 329

I. Types of Delay: Basic Principles 329

II. Causes of Excusable Delay 333

III. Causes of Compensable Delay 336

IV. Scheduling and Delays 341

V. Right to Complete Early 343

VI. Concurrent Delay 345

VII. Suspension of Work 346

VIII. Time Extensions 350

IX. Relationship of Delay Remedies under the Suspension of Work and Changes Clauses 355

X. Acceleration 356

Appendix 9A: Suspension of Work (Apr. 1984) 362

10 Inspection, Acceptance, Commissioning, and Warranties 363

I. FAR Clauses Affecting Inspection and Acceptance 364

II. Contractor Quality Control Systems 366

III. Strict Compliance versus Substantial Compliance 369

IV. Government’s Right to Inspect 371

V. Limits on Government’s Inspection Rights 372

VI. Cost of Inspection 375

VII. Acceptance 377

VIII. Project Commissioning 382

IX. Warranties 386

Appendix 10A: Use and Possession prior to Completion (Apr. 1984) 391

Appendix 10B: Warranty of Construction (Mar. 1994) 392

Appendix 10C: Whole Building Design Guide 394

Section 01 91 00 (Section 01810)—Commissioning 394

Part 1. General 394

Part 2. Products 399

Part 3. Execution 400

11 Contract Terminations 407

I. Introduction 407

II. Terminations for Default 407

III. Government Damages 427

IV. Terminations for Convenience 438

V. Constructive Terminations 445

VI. Termination Settlements 448

Appendix 11A: Termination for Convenience of the Government (Fixed-Price) (Alternate I) (Sep. 1996) 454

Appendix 11B: Checklist: Potential Default Termination 458

12 Payment and Performance Bonds 463

I. Introduction 463

II. Miller Act Payment Bonds 464

III. Miller Act Performance Bonds 472

Appendix 12A Standard Form 25 —Payment Bond 479

Appendix 12B Standard Form 25—Performance Bond 481

13 Equitable Adjustments and Costs 483

I. Overview 483

II. Equitable Adjustment Theory 485

III. Methods of Pricing Equitable Adjustments and Claims 508

IV. Cost and Pricing Data 513

14 Project Documentation Techniques 523

I Documentation Generally 523

II. Notice Obligations in Government Contracts 524

III. Notice to Representatives/Agents of Contracting Officer 531

IV. Written versus Alternative Forms of Notice 533

V. Failure to Give Notice—Consequences 538

VI. Coordinating Notice Requirements in Subcontracts and Purchase Orders 540

VII. Documentation Recommendations 543

VIII. Documenting with Project Management Software 557

Appendix 14A: Notice Checklist 562

Appendix 14B: Sample (Partial) Notice Checklist: Federal Government Construction Contracts 564

Appendix 14C: Forms 566

15 Contract Claims and Disputes 571

I. Introduction 571

II. The Contract Disputes Act 571

III. Contractor Claims under the CDA 574

IV. Subcontractors and the CDA Claims Process 602

V. Government Claims 605

VI. Contracting Officer’s Decision 607

VII. Contract Disputes and Alternative Dispute Resolution 618

VIII. Recovery of Attorneys’ Fees in Government Contract Claims 620

Appendix 15A: Sample Freedom of Information Act Letter 624

16 Federal Grants Funding Construction Contracts 627

I. Overview 627

II. Role of Federal Agencies in Grant-Funded Contracting 628

III. Administration and Interpretation of Grant-Funded Contracts 634

17 The American Recovery and Reinvestment Act and Government Construction Projects 643

I. Overview 643

II. Registration and Reporting Requirements 647

III. Buy American Requirements 650

IV. Accountability and Ethics 654

V. Wage-Rate Requirements 657

Appendix A: Internet-Based Resources Applicable to Government Contracting 659

Appendix B: Glossary of Terms and Acronyms 665

Index 673