The courts in 2010 dealt a severe blow to a contractor's right to perform extra work based upon an agency's oral directive. In P&D Consultants v. City of Carlsbad (Dec. 2010), P&D entered into a written contract with the City to provide civil engineering services. The contract provided (as do all public contracts) that written change orders were required to modify the work and cost of the work to be performed. Because the procedure used by the City often took several weeks to execute agreed upon change orders, the City often orally directed P&D to go forward with the agreed upon work without having a written change order in hand. The City requested that P&D perform extra work set forth in amendment 5. As before, P&D began the work prior to having a written change order in hand. A dispute subsequently arose between the City and P&D about the value of the work in amendment 5. P&D Sued the City for additional compensation it believed it was entitled to under amendment 5. At trial P&D argued that the contract's written change order requirement had been waived by the City's oral authorizations of prior work and the parties conduct in going forward with the agreed upon work without having a written change order in place. Held: a public contract cannot be legally orally modified or modified by conduct. P&D was not entitled to extra compensation because the contract required the contractor to have a written change order in place prior to starting the work. "By ostensibly relying on the [City's] oral authorization or direction to begin or perform extra work without a written change order, P&D acted at its peril." The court also denied P&D's other theories of recovery and entered judgment for the City.
Just another reminder for those performing public works projects, you must get a written change order before you perform any extra work or you will not get paid for the extra work.