Court Cautions Contractors to Not Rely Exclusively on Drawings when Calculating Bid

When first deciding to undertake a construction project, regardless of whether public or private, contractors often first turn to the drawings. The reason for this is simple, the drawings are a graphic representation of what is to be built; or, to cite the old adage, a picture is worth a thousand words. However, a court, in Maric Mechanical, Inc. v New York City Housing Authority, reminds us that where that picture, itself, is accompanied by words—there, a disclaimer—those words can destroy a thousand pictures.

Background

In September of 2021, the New York City Housing Authority solicited bids to replace the boilers at the Ravenswood Housing project in Queens. As is typical, drawings were provided with this bid solicitation showing, amongst other items, 40 shoring towers supporting the temporary boilers that would be needed during the project. The drawings contained a disclaimer providing that the record drawings “may or may not truly reflect existing conditions” and that “such information is included on the assumption that it may be of interest to the Contractor, but the Engineer, Owner and their consultants do not assume responsibility for its accuracy or completeness”. The contract also provided that the contractor had an obligation to determine for itself the true nature of existing conditions. As to the specific work, the specifications provided that all shoring was to be included in the lump sum.

Maric Mechanical was awarded the contract on June 21, 2022, and it promptly discovered that over 160 towers would be required—a fourfold increase from the 40 depicted on the drawings. Maric submitted a change order for over $600,000 in additional costs for the extra towers, and such was promptly denied. Maric then commenced a lawsuit to recover for this claimed extra work. NYCHA moved to dismiss the lawsuit, citing both the disclaimer as to the accuracy of the drawings, and the specifications requiring that Maric take responsibility for “all shoring”, and not just the shoring shown on the drawings. Maric opposed, arguing that the drawings were inaccurate and, therefore, the requirement for additional towers was a change after the contract bid. Therefore, Maric argued, it was entitled to an equitable adjustment under the contract. 

Decision

The court granted the motion to dismiss, holding that the need for the additional towers was not a change in the scope of the work where the contract required Maric to provide “all shoring”. Further, the court, citing well settled case law, held that although recovery may be had where a contract contains affirmative representations amounting to a warranty as to existing conditions, the contract at issue not only contained no affirmative representations, it contained a specific disclaimer as to the accuracy of the drawings. In that regard, the court held that Maric was precluded from seeking an equitable adjustment for work that was included in the original scope, and of which Maric should have been aware.

Comment

It is quite tempting when bidding a project to rely heavily on the project’s drawings—particularly where those drawings can be imported into a CAD program and take offs can be so easily done. The bidding process is literally that which sparks everything else, and without the submission of bids or pricing all else grinds to a halt. Accordingly, in order to “feed the machine”, estimators are in a constant state of reviewing project plans and specifications, and putting dollar values to the work set forth. Accordingly, contractors welcome any efficiency, and digital scalable plans have generally contributed to that efficiency. However, often lost in the proverbial sauce are the details of what the drawings actually stand for. Here, with the disclaimer, the drawings were little more than basic guidelines for the more complete specifications.

Absent the existence of “positive representations as to conditions, substantially amounting to a warranty” referenced by the court, contractors would be well advised to not only review the specifications and other contract documents in detail, but to also investigate the site for themselves to verify what true onsite conditions are. In fact, this requirement is often specifically found in the specifications—which, unfortunately, often gets dismissed as “boilerplate”, although it is as enforceable as any other substantive provision. Surely, as found by the court, if Maric were to have visited the site it could have seen for itself the inaccuracies in the drawings, and then submitted a bid that would have accounted for a sufficient number of shoring towers. Failing that, a contractor is essentially gambling that the drawings are accurate, and taking the entirety of the risk that they may not be.

If you would like more information regarding this topic please contact Thomas H. Welby at twelby@wbgllp.com or call (914) 428-2100