During the course of construction, contractors will sometimes find that the owner and/or architect are demanding more work than the contractor reasonably interprets the plans and specifications to require. The typical owner and/or architect solution to the dispute is simply to tell the contractor its interpretation is incorrect and direct the contractor to proceed with what the contractor considers additional work. Later, the owner may attempt to rely upon the lack of a written change order authorizing the performance to deny compensation and/or time for performance of additional work.

Does the contractor walk off the job or proceed with the additional work notwithstanding this dispute? Most contracts require contractors to proceed with the work notwithstanding the existence of a dispute; otherwise, the contractor might be subject to a default termination. However, such provisions also typically require the owner to continue payments under the contract for undisputed work. The idea is to keep the project moving forward—i.e., to prevent the contractor from bringing the project to a halt pending resolution of disputed items and to prevent the owner from holding the contractor’s funds hostage pending the resolution of the dispute.The contractor must therefore generally proceed with the performance of additional work without immediate compensation for that work.

However, it does not mean that the contractor is performing the work gratuitously. The refusal of the owner to issue a change order for the additional work may not insulate it from liability. "[U]nder Mississippi law, where the owner orders the contractor to perform extra work outside the contract, the contractor is entitled to compensation for that work, despite the fact that no change order was issued." See Sentinel Industrial Contracting Corp. v. Kimmins Industrial Service Corp. In Sentinel, the Mississippi Supreme Court recognized the inherent inequity in allowing the contractor to demand a subcontractor perform extra-contractual work without a change order and then deny compensation because a change order had not been issued.

This same rationale should apply to the situation where an owner directs the contractor to perform work without a change order. When this occurs, the contractors must place the owner and/or architect on written notice of its objection to the additional work and reserve its right to recover the costs and/or time associated with the change order work. Simply stated, the duty to proceed does not entitle the owner to avoid paying for legitimate change order work even in the absence of a written change order.

In an attempt to avoid liability for the various deficiencies in its plans and specifications, some architects and engineers rely upon the general disclaimers set forth in the contract documents. However, the United States Supreme Court has held these general disclaimers are unenforceable as a matter of law. In U.S. v. Spearin, the Supreme Court ruled that the Owner is responsible and affirmatively warrants the adequacy of its plans and specifications and that responsibility "is not overcome by the usual clauses requiring builders to visit the site, check the plans, and to inform themselves of the requirements of the work." Similarly, in Baldi Bros. Constructors v. U.S., the U.S. Court of Federal Claims ruled that such general contractual provisions, even including a provision which states the owner does not guarantee the statements of fact in the specifications, will not relieve the owner from liability for providing misleading information to the contractor

Neither the Owner nor the design professional can fully shield itself from liability for its errors and/or omissions in the plans and specifications through disclaimers in the contract documents. Likewise, disclaimers shifting the burden of costs associated with errors and/or omissions are also generally unenforceable. A contractor is therefore typically entitled to rely on the representations in the plans and specifications, but the contractor should nevertheless perform a reasonable site inspection and review of the plans and specifications so that obvious errors and/or omissions can be addressed prior to bidding.

When a contractor does find itself confronted with such general disclaimers and the owner and/or architect nonetheless issues a directive to proceed, the contractor must document its position with regard to the error and/or omission to protect its position. The lack of such documentation may substantially impair, if not be fatal, to the contractor’s claim for additional compensation and/or time.

There is an emerging trend in public bids to include a requirement for a mandatory pre-bid meeting. The requirement to attend the pre-bid meeting is typically set forth in the Instructions to Bidders ("ITB") and provides that a contractor’s failure to attend will result in its bid being rejected as non-responsive.  

As a preliminary matter, there is no Mississippi statute or regulation which requires a public agency to conduct a pre-bid meeting or for a contractor to attend a pre-bid meeting to qualify it to submit a bid.  This is a "requirement" typically included in the Instructions to Bidders by the Owner/Architect.  One reason it may be included is to give "local" contractors an advantage over "foreign" contractors. "Foreign" contractors are forced to expend additional time and effort to attend the pre-bid meeting, and cannot simply throw a bid together and submit it to the public agency. Another reason the requirement is included may be to give the opportunity for the Owner/Architect to give final, pre-bid information on the project requirements and, sometimes, even to serve as an alternative (though not a good one) to an amendment to the ITB.

A contractor that does not attend the pre-bid meeting risks the potential for having its bid rejected as non-responsive.  If the Owner/Architect truly intends to enforce this requirement, at bid opening the Owner/Architect should examine each bid to determine the identity of the bidder and compare it to the list of attendees at the pre-bid meeting.  If the bidder did not attend the pre-bid meeting, the Owner/Architect should return the bid unopened.

In most instances, the Owner/Architect will open the bids and address the issue only if the apparent low bidder has not attended the pre-bid meeting.  The bigger the spread between the apparent low bidder and the second low bidder, the more likely it is that failure to attend the mandatory pre-bid meeting will be waived. The Mississippi Attorney General has opined that "a bidding irregularity may be waived if: (1) the irregularity does not destroy the competitive character of the bid by affecting the amount of the bid thereby giving the bidder an advantage or benefit over other bidders and (2) the irregularity does not involve noncompliance with a statutory or regulatory requirement."  Because the requirement to attend a pre-bid meeting is not a statutory or regulatory requirement, Owners/Architects frequently waive the pre-bid meeting requirement without a challenge.  

If, however, the Owner/Architect does not agree to voluntarily waive the irregularity, an argument can be made that by opening the contractor’s bid that did not attend the pre-bid meeting; the Owner/Architect has already waived the requirement.   

There is another alternative. A contractor that is concerned about the requirement for a mandatory pre-bid meeting can file a pre-bid protest with the public agency challenging this requirement as unduly restrictive on competition and not in the best interests of the public.