When Project Specifications Become a Dispute
When Project Specifications Become a Dispute – Protecting Your Work and Your Crew
Every contractor knows that municipal projects come with strict timelines, high visibility, and little room for error. But even when you follow every specification to the letter, disputes can arise, sometimes from the very people who set those specifications. In this case study, we dive into a real-world experience that underscores the importance of contracts, documentation, and understanding your rights as a contractor.
The Experience: Dedicated Resources, Moving Goalposts
A contractor was awarded a municipal project that required highly specialized concrete restoration. The timeline was tight, and the specifications were clear. More specifically, the city representative were disputing their own terms included in the scope of work. The project required scrubbing the paint removal agent. We comply with the required approach, but after noticing it was not working as intended, we communicated that it might require grinding the concrete instead. The city representative agreed with the proposed approach but refused to formalize the change, stating: “ Here in the city, scrubbing is the same as grinding. It’s a matter of semantics”. To meet the city’s demands, the contractor made a significant business decision:
A specialized concrete crew was fully dedicated to this single project.
Other revenue-generating opportunities were declined due to the immediate timeline requirements.
The contractor strictly adhered to the project specifications provided by the city.
Midway through the project, a city representative began questioning the work’s compliance with the same specifications they appeared to have drafted. The city representative acknowledged that the method they required wasn’t working, but refused the change order, claiming there was no money budgeted for such change order.
The project was ultimately halted without a clear explanation, leaving the contractor facing not only the loss of payment but also significant opportunity costs.
The Lessons: How Contractors Can Protect Themselves
Contracts Must Address Opportunity Cost
When dedicating a specialized crew to a single project, make sure your contract includes provisions for lost revenue if the project is canceled or disputed without cause. This protects you from absorbing the financial burden of unused resources.Meticulous Documentation is Non-Negotiable
Keep a paper trail of all specifications, approvals, and communications. This includes emails, meeting notes, and any verbal instructions followed up in writing. When disputes arise, documentation is your strongest ally.Understand “Good Faith” Obligations
Both parties in a contract have a legal and ethical duty to act in good faith. If the party issuing the specifications later disputes the work, especially without evidence, it may be a breach of that obligation. Contractors should be prepared to raise this issue formally and early.Follow Specifications to the Letter
Adhering strictly tothe provided specifications ensures you can demonstrate compliance. Even minor deviations can weaken your position in a dispute, so document every step of the process to show you delivered exactly what was requested.Dedicate, But Diversify
If possible, avoid dedicating an entire specialized crew to a single project without contractual safeguards. Balancing workload across multiple projects can mitigate risk in case of abrupt cancellations.
The Bigger Picture
This experience isn’t unique. Contractors working with municipal clients often face similar challenges: shifting expectations, unclear communication, and political dynamics that can disrupt projects overnight. The key is preparation.
By incorporating opportunity cost clauses, maintaining rigorous documentation, and understanding your rights under good faith obligations, contractors can not only protect their work but also strengthen their business against unforeseen disputes.
