Study finds U.S. contractors aren’t always judged the culprit, but design-build does not help them prevail.
When Fluor Intercontinental, a unit of the big engineering and construction services company, won a $74.4-million contract in early 2005 to build a new U.S. embassy compound in Haiti’s capital, Port-au-Prince, it ran into trouble with soil conditions that differed from what the firm believed would be present. 
Fluor had sought a full 51% of the original contract value—$38 million—for extra costs that included additional security. In 2013, the Civilian Board of Contract Appeals seemed to recognize Fluor’s point about extra costs, but in contract disputes, winning on principle can still leave a company with empty pockets: The board awarded Fluor only $1.2 million.
Fluor is one of a number of contractors that wound up either losing cases or coming up short in damage awards in contract disputes with government agencies, according to a new study of 107 disputes by the Construction Financial Management Association. Design-build contracts, surprisingly, provided no measurable protection to the contractors when disputes arose, the study found.
Initiated by the Princeton, N.J.-based association as a way to determine where the fault in troubled federal public-works projects belonged, the study provided a more textured picture of controversial projects than can be gathered from anecdotes and news stories.
While contractors were at least partially vindicated just under half the time, they were far less likely to win in the larger cases with more money at stake, read more…
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