One of 2019’s most significant construction cases underscores the importance of strictly adhering to a contract’s written terms. The case resulted from the FBI’s award to a general contractor a construction contract for a large FBI facility. Part of the project involved fabricating and installing precast concrete panels on an existing parking garage structure. The general contractor hired a subcontractor to fabricate and install the precast concrete panels.

The FBI required the general contractor to verify and accept the existing parking garage structure by comparing the contract documents to the as-built conditions and verifying all dimensions. Before subcontracting, the general contractor and subcontractor discussed who would be responsible for verifying the as-built drawings and dimensions. The subcontractor understood that the general contractor would verify.

The subcontractor began fabricating the concrete panels but then discovered the specified dimensions were wrong causing the panels not to fit. The subcontractor incurred an additional $975,000 to redo the panels it had already made and otherwise complete the work. The subcontractor made a bond claim and sued the general contractor for this extra work. The general contractor defended on the ground the terms of the written contract made the subcontractor responsible for verifying the dimensions notwithstanding any conversations the parties may have had.

The judge denied the subcontractor’s claim. The judge ruled that the written subcontract obligated the subcontractor to verify the dimensions of the precast concrete panels. The subcontract contained a typical “flow down” provision under which the subcontractor agreed to be bound by “each and all of the terms and provisions” of the prime contract and to assume all of the obligations that the general contractor assumed toward the FBI. In addition, the subcontract expressly required the subcontractor to “verify and accept existing conditions” and made the subcontractor “responsible for taking field measurements necessary to . . . verify dimensions.”

The court rejected the subcontractor’s evidence of conversations about the scope of work in light of these clear contract terms. Under the facts of this case, the judge found no basis to set aside the written subcontract. Courts rarely do.

United States f/b/o Modern Mosaic Ltd. v. Turner Construction Co., 946 F.3d 201 (4th Cir. 2019).

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