The Devil is in the Details: Scope of Work Goes Further Than Any Long-Form Contract
I recently had the pleasure of attending the Construction Owners’ Association of Alberta Best Practices 2016 Conference and was part of a panel presenting on the draft Scope of Work initiative of COAA. This initiative is aimed at providing a comprehensive scope of work document for use by the industry; it is a document template that can be tailored for specific required uses on a project, but that is intended to create a clearer and more appropriate scope of work. So, why is this important? There are many reasons that can be discussed in detail, but in short, here are a few that we believe are of particular importance:
The “handshake deal is a thing of the past” is something I hear often from clients. However, that does not mean everyone isn’t working towards a common goal and don’t work together. If there is a clear and concise scope, setting out the expectations and duties of both sides, everyone will be starting off with the same understanding and expectations;
When something inevitably happens on a project that one or both parties did not expect, a clear scope document will allow both sides to understand exactly what each is required to do and whether this new occurrence, and resulting addition or deduction of work, is something that falls in or outside of the contract (with resulting compensation and schedule effects);
Two different parties with only a handful of employees will have at least two handfuls of opinions and experiences of how it[a certain process or procedure} has "always been done”; everyone comes with a different understanding of standard project expectations, which means there will not be alignment on what the “standard” really is – just state it so everyone is on the same understanding;
As just one recent example, the sequencing of how work will be performed can be vital to a contractor’s bid price. Out-of-sequence work can happen for a number of reasons, but let’s use a common example: the site and higher tier contractor or owner are not ready for that contractor. As a result, the contractor has to perform piece-meal work and mobiloze with a full work force on the site for out-of-sequence work, causing considerable delays to the schedule and resulting costs for labour. This is what occurred in A.A.A. Aluminum Products Ltd. v. Grafos, 2015 BCSC 2128. The contractor was fortunate in this instance, as the Court implied a contractual term that: “For the plaintiff to execute its obligations and to rectify any defects it goes without saying it and its workers would have continued, unencumbered access to the property to complete the work and to rectify defects”. For the owner or the higher tier contractor, that may not be the expectation though (and obviously was not in this case), so just say it!
We still believe lawyers have a role in construction projects, however that role should be to help our clients, and the project, be set up for success. At the end of the day, it is the contracting parties that have the risk and benefits of that project and they are the ones with boots on the ground living every torqued bolt and every scoop of earth. Our job is to help the project parties to have a successful project, and resolve disputes when extra help is needed.