ce167f11_Midterm_2_Solutions - CE 167: Engineering and...

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CE167 Midterm #2 1 CE 167: Engineering and Project Management Professor William Ibbs Fall 2011 General Instructions This exam is to be completed in a bluebook – answers not recorded in a bluebook will not be graded. Place the exam sheets on the inside of your bluebook when finished and hand them in back with the bluebook. Put your name on both your blue book and the exam sheet. Show your work step-by-step. Write legibly, and state any necessary assumptions. If you have a question during any portion of this exam, raise your hand & speak privately to the proctor. Questions: 1. [14 points] As a general contractor in New Jersey, you are bidding on a large hospital project owned by Big HMO. You decided to subcontract the concrete work, and accept a quote from Small Family Business at 7.808 million dollars to perform the scope of work. As the GC, you were awarded the contract as the lowest responsive and responsible bidder. After the bid award and NTP, however, the Small Family Business notified you that they could no longer perform the scope of work for the price quoted due to a sharp increase in concrete prices as a result of recent turmoil in the energy markets due to unrest in Libya. Small Family Business submitted a revised quote for their work, noting that in their original quote that they had included various disclaimers, such as “this is provided for informational purposes and no reliance should be placed thereon. …[subcontractor] will not be responsible or liable in any manner pending execution of a written agreement covering the work in question…The submission of this information should not be regarded as a firm offer.” You reject the revised quote, and the Small Family Business withdraws its prebid offer, stating “We’d go bankrupt if we do it for that price! I have 8 children to feed, you know!” Ultimately, you retained a replacement subcontractor at a cost of 10.3 million dollars. You submit a change order to the owner, but they deny your request. a. As the General Contractor, what should you do? 5 points The GC could make a claim against the bid of the subcontractor based on promissory estoppel. In effect, they relied on the subcontractor’s bid upon submitting their bid to the owner, and subsequently won the bid. Some may claim Force Majeure, and while this point can be argued in that the material price spikes are beyond the control of either the GC or the sub, Force Majeure usually only applies to time extensions, and not price increases. Other points that may be argued but are not applicable are DSC, Cardinal Change. Arguments may also be made in terms of inadequate contingencies, but this may depend on how much the price of concrete has
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CE167 Midterm #2 2 increased. Clearly, in this case, it has increased beyond what would normally be an acceptable contingency. b.
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This note was uploaded on 01/06/2012 for the course CIVIL AND 167 taught by Professor Ibbs during the Fall '11 term at University of California, Berkeley.

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ce167f11_Midterm_2_Solutions - CE 167: Engineering and...

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