Claims by contractors for extra work continue to be a major source of construction litigation. There are few projects completed with no additions or changes to the original contract. Most contracts have a standard provision requiring that orders for extra work be in writing. Problems arise when the contractor does not obtain the approval for the extra work but proceeds to perform the additional work anyway.
In the recent case of Tadco Construction Corp. v. Dormitory Authority of the State of New York, the court ruled on the contractor’s extra work claims.
TADCO Construction Corp. entered into a written contract with the Dormitory Authority of the State of New York to perform certain work related to the marina rehabilitation project located at Kingsborough Community College. Under the parties’ agreement, the contractor agreed to perform all work and furnish all supplies and materials for the price of $1,436,642, subject to adjustments for extra work or alterations to or deductions from the work.
Before construction started, the contractor determined that fixing the floating dock system would only extend the life of the dock by a few years, and that replacing the dock, although more expensive, would give the dock a significantly longer lifespan. The contractor presented this information to DASNY, who responded that it would not entertain an increase in costs for the repair of the dock, and that it would only approve replacement of the dock if it did not increase the contract price. The contractor responded by telling DASNY that it intended to proceed with its plan to replace the dock “under protest” and that it would seek compensation for the increased costs of this plan later, by submitting a change order request.
When the contractor submitted the change order request for the cost of the replacement dock in the amount of $155,040, DASNY refused to pay it, arguing that the contractor had chosen to replace the dock system on its own initiative and that DASNY had repeatedly told the contractor that it would not approve a change in contract price if the contractor chose to proceed with the installation of the new dock system. Based on DASNY’s denial of the change order request, the contractor filed suit, seeking to recover the extra costs related to the replacement dock. DASNY responded with a motion for summary judgment, seeking to have the contractor’s extra work claims dismissed.
The court ruled in favor of DASNY, denying the contractor’s extra work claims. According to the court, recovery cannot be had for “extra” work which actually falls within the contract or the plans and specifications, but recovery may be had for work outside the contract where the contractor was in fact specifically ordered to do work that was not within the scope of that called for by the contract.
Here, the court ruled that the contractor chose to proceed with the dock replacement plan after being told by DASNY that it would not agree to any changes in the original contract plan that would result in increased costs. Because the work was not ordered by DASNY, the court determined that the contractor voluntarily substituted materials in the project at its own discretion, and the costs of that choice are not recoverable. Accordingly, the court granted summary judgment in favor of DASNY.
A contractor who wishes to be assured that he will be paid for extra work should follow the contractual requirements and obtain proper written authorization to do the additional work either from the owner or his duly authorized representative prior to performing the extra work. As this case demonstrates, a contractor should not ignore contract provisions relating to extra work in the hope that a court may make an exception to the contract and find a waiver under particular facts and circumstances.