Rely on Bad Numbers Estimated For a Contract? Consider Filing a “Negligent Estimate” Claim or Similar Legal Claim

Numbers

Numbers (Photo credit: Jon Matthies)

Some contractors and subcontractors working on U.S. Government (USG) projects discover too late that numbers quoted in the solicitation or contract were bad estimates.  Worse, a contractor in that situation may have relied on those numbers being accurate, with this reliance turning out to cause the contractor to lose money.

For example, a contractor relying on contract numbers that are overestimated may over-order supplies, and overspend on personnel and facility costs, only to learn later that such extra expenses were wasted because the scope or volume of the contract turned out to be far less than the estimates originally given. Worst of all, a contractor or subcontractor in this position may learn that the other party (USG or prime contractor) had known, or had good reason to know, that the numbers were inaccurate from the first day.

If you find yourself in a bad-estimate situation like this, and you are a contractor on a USG project, you should know there are potential legal options, including a potential legal claim for having made a “negligent estimate” on your contract scope of work.

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