Careful What You Ask For
Working for the City of New York can sometimes feel like a stroll through a minefield. There are so many ways to trip up. A contractor recently stumbled on yet another way.
Unicorn Construction Company contracted with the City to rehabilitate 12 City bridges. The “Work” of the contract was defined as including all 12 bridges, and the City was obligated to issue a certificate of substantial completion only after all 12 bridges were completed. The contract also included a shortened period of limitations for making any claims.
As the job progressed (and ran beyond the scheduled completion date), Unicorn requested an extension of time. In doing so, it acknowledged that the work on 10 bridges was complete, seeking an extension of time on only the remaining two bridges. Much later, when Unicorn attempted to assert a claim for “price escalations and extended overhead” the City argued that the time to file a claim had already expired as to the 10 bridges—pointing to the date in the earlier extension of time request where Unicorn had acknowledged completion.
Unicorn argued that it was a single, unified contract that could only be deemed substantially complete once the City issued a certificate stating that all 12 bridges had been completed. But the court agreed with the City that Unicorn’s admission that 10 bridges had been completed much earlier started the clock ticking. Accordingly, the court dismissed the action with respect to the 10 bridges and allowed it to survive only with respect to the last 2 bridges.
We have seen this happen over and over again. Where it is in the City’s interest to start the limitations clock ticking at the very earliest date, it will look to any admission by the contractor that its work is substantially complete. Often that trigger can be found in a “Substantial Completion Requisition” submitted by a contractor anxious to be paid. While we do not recommend that a contractor delay invoicing for work performed, it might be wise to treat such submissions as having started the clock ticking on the short period of limitations to bring a claim, and to diary ahead of the deadline for filing claims. Only then can a contractor hope to avoid a situation where its claim became time-barred even before the contractor thought it was ripe.