Contracts Set Boundaries

Posted on August 24, 2012. Filed under: KBR, Piss Ants | Tags: , , , , , , , , , , , , |

15th in the series The Great Cluster Fu…   A treatise on questionable journalism and pre-litigation practices

Your words for the day (definitions according to Dean)

  • deal = an arrangement, often informal and unwritten, sometimes illegal, between two parties for mutual benefit.
  • contract = a formal, legally binding agreement between two parties for mutual benefit.  In business, due to the complexity of applicable laws (local, federal, international) and mandated engineering and environmental standards, these agreements are always set down in an extensive written form.

You would think that an attorney understands the basics of contracts.  Ol’ Raiznor sounds like a legal school dropout in his characterization of the LOGCAP III Water Plant Task Order from The Government to KBR.  But, then, he is not giving a lecture to first-year law students; it is more like a refresher course in Fast Talking Con Artistry 101.  You will note that Super Dan avoids the word “contract” as though it might bite him.  Instead, he employs the word “deal,” carefully enunciating it with a calculated hint of distaste.

Everybody knows what a contract is.  You buy a house, you sign a contract.  You buy a car, you sign a contract.  You rent a residence, you sign a contract.  You enlist in the military, you sign a contract.  You borrow money, you sign a contract.  Is anyone in doubt about what a contract is? 

Everybody knows what a deal is.  The phrase “it’s a deal” is a conditional expression of enthusiasm uttered when it looks like a mutual arrangement has been achieved; continuity of that enthusiasm (except to the most naive among us) is dependent upon a written version of the “deal” with all the whereas‘s and wherefore‘s carefully in place.  A deal without a written contract can be as disagreeable  as a glass of pure lemon juice taken straight up.

Contracts define the boundaries of benefits and obligations.  In business, contracts usually involve the transfer of hard goods or services for money.  One party provides or performs (the contractor), and the other party sets the conditions of that performance and pays (the client).  There is an element of good faith inherent in the agreement:  the product or services are to be provided at the designated level of quality and timely completion, and the money is to be paid in the agreed amount at the agreed time.

Change orders are the rule, not the exception, in every major construction project, whether highway or building.  There can be dozens of these for every project and they may originate from either party, but — since they involve changing the original agreementboth parties must agree to the new conditions.  These changes may be precipitated by weather conditions, availability of supplies, unforseen site conditions, changes in design of the project or of a component…   just about anything.  It is simply the way business is conducted.

An independent arbiter may be sought by either party when there is an impasse over the meaning of terms set forth in the contract.  In litigator terms, one party sues the other in civil court.  Such actions are common in business, and, thousands of these take place every year without a running commentary from Ms. Sparky or every news outlet in the country.  These actions are strictly the business of the contract parties and no one else.  Social and political views have absolutely nothing to do with the interpretation of contractual terms.

Next up:  About that “no-bid” comment by Raiznor

Series references:  KBR, Mary L. Wade, Qarmat Ali, Doyle Raiznor, Ms. Sparky

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