Extra work claims by contractors are a major source of construction litigation. In the recent case of Mid-State Industries v State of New York, a contractor sought additional compensation for extra work, claiming that it relied on the State’s drawings showing 33,100 square feet of roof work. The contractor later discovered that the total area of the roof work was 47,200 square feet. According to the contractor, this error caused it to perform an additional 14,100 square feet for which it sought additional compensation.
Mid-State submitted a bid to SUNY for a project to replace the roof of a library located on the campus of SUNY Plattsburgh. Mid-State’s bid was based upon, among other things, an architectural drawing of the roof that was provided to prospective bidders with the project manual, and an addendum to that drawing noting that the scale should be one sixteenth rather than one eighth. Relying on these documents, Mid-State determined that the roof was 33,100 square feet and submitted a bid based on those documents. SUNY accepted Mid-State’s bid and entered into a contract with Mid-State for the roof replacement. After Mid-State completed a significant amount of work on the project, it noticed that it was short on materials. Mid-State then measured the remaining part of the roof and determined that the total area was actually 47,200 square feet. Mid-State then determined that the scale on the drawing (that had been corrected in the addendum) was still erroneous. Based on that error, Mid-State realized that it had underestimated the cost of materials and labor by about one third. Mid-State notified SUNY and SUNY's architect of this problem, completed the project and submitted requests for payment for the "extra work". When SUNY refused to pay, Mid-State commenced a lawsuit against the State. The State moved for summary judgment dismissing the claim, and Mid-State cross-moved for partial summary judgment on the issue of liability.
The Court of Claims granted the State’s motion to dismiss Mid-State’s lawsuit, and the appellate court affirmed. In doing so, the appellate court noted that the primary guide in determining whether a contractor is entitled to extra work are the contract documents. Where the contract reveals that the parties intended for the contractor to rely on its own investigation, no recovery for extra work may be had absent a showing of fraud or misrepresentation as to existing conditions. Here, the contract and bid documents contained a specific representation that Mid-State carefully examined all of the contract documents, personally inspected the worksite and “has satisfied itself as to all the quantities and conditions, and understands that in signing this Proposal, it waives all right to plead any misunderstanding regarding the same”. The appellate court held that Mid-State’s reliance on the scale in the state’s drawings could not rescue its extra work claim because a pre-bid inspection—which Mid-State represented it had made—would have revealed the actual dimensions of the roof area. The court noted that Mid-State attended a pre-bid meeting at the site, during which some potential bidders took measurements of the roof.
The appellate court also rejected Mid-State’s argument that the issuance of an addendum containing the (incorrect) revised scale superseded the contract documents—and particularly the provision requiring Mid-State to inspect the worksite. The contract here unambiguously stated that the contract documents (which include the addenda) are to be "complementary", and that requirements of one "shall be as binding as if called for by all". The appellate court held that this language demonstrates the parties' intent to harmonize the contract documents rather than pursue an interpretation that would render some provisions meaningless. Accordingly, the court ruled that the language modifying the scale on one drawing was sufficient to supersede the scale on any prior drawing. The addendum did not supersede the contract language concerning Mid-State’s obligation to perform its own investigation and to not rely on SUNY's estimates.
In the face of cautionary contractual language providing for a pre-bid investigation of the site, a contractor would be well-advised to conduct a pre-bid site inspection to verify the site conditions and dimensions. A contractor cannot expect to recover for extra work based on misrepresented conditions or dimensions where the contractor is contractually required to conduct its own pre-bid site investigation which may reveal inaccuracies.