Considerations for Negotiating Construction Scope of Work Provisions
When negotiating a construction contract, the parties must be especially critical of the scope of work provisions to ensure the agreement clearly sets forth the services and work provided by the architect and contractor—clarity is key. Beginning with a solid framework for the construction and services required under the contract will not only support the project’s successful completion but also avoid delays, payment disputes, or other issues that may stress the relationship between the parties and lead to additional conflicts.
Scope of Work Provision
The scope of work provision describes the responsibilities of the owner, the work or services to be performed by the architect or contractor, and any additional duties of the architect or contractor. A well-drafted scope will also address the process for handling unforeseen events, expectations in terms of quality of the work, and the handling and interpretation of the construction documents. The scope of work will also include drawings, specifications, general conditions, and modifications.
By setting forth the duties and responsibilities, the contractor and architect will have a clear understanding of the work to be completed, and they will be better equipped to provide accurate schedules, fees, and cost estimates. Gaps in the scope of work may require the owner to pay additional money and require extension of the project completion date. Generally, owners are encouraged to insist on language requiring the contractor to construct the project in accordance with the requirements outlined in the construction contract, drawings, specifications, and other construction documents, as well as any requirements reasonably inferred that are necessary to complete the work.
Two common issues that arise related to the scope of work provision include an incomplete or poorly defined description and scope creep.
An incomplete or poorly defined scope of work causes issues for the owner as well as the contractor. For instance, a poorly drafted scope of work may result in work that is incomplete, defective, or varies from a party’s expectations in terms of quality or other standards. When expectations are unclear, the parties may also experience issues coordinating responsibilities for a project.
Another common issue, often referred to as scope creep, occurs when the scope of work expands beyond the originally agreed-upon parameters. Not only does this issue cause tension in the parties’ relationship, but it may result in cost overruns, delays, or payment disputes.
Developing a Scope of Work
Time spent contemplating and negotiating a scope of work is time well spent. A thorough, mutually agreed upon scope will serve not only to avoid potential disruptions but also provide clear expectations. When working with your construction attorney to develop your scope of work, consider the following:
- Provisions for handling delays, disputes, changes to scope, and discrepancies between documents
- Incorporating by reference the design documents, specifications, and other relevant construction documents
- Representations that the design documents and other plans and specifications are complete and can be relied upon by the parties
- Express warranties by the contractor that it will perform the work consistent with the construction documents
- Assurances and representations from the contractor and architect regarding the standards of workmanship and quality for performing the work
- Careful review of assumptions or exclusions
Ultimately, the fewer changes made to the scope after a construction contract is signed, the more efficient and less costly the project will be, and it all begins with a well-defined scope of work. By clearly setting expectations and requirements for the work, the owner and contractor or architect will have a solid framework for a successful project. If you have questions regarding your construction contract or are interested in learning more about our Construction Law practice, contact Victoria Moran at Victoria.Moran@mwhlawgroup.com.