Owner’s Duty to Coordinate and Cooperate on Multi-Prime Construction Projects

This is the second blog post in a six-part series about an owner’s duty to coordinate and cooperate on multi-prime construction projects. The purpose of this series is to provide awareness of the owner’s duties along with case examples on the subject. This post defines the duty to coordinate and cooperate on multi-prime construction projects.

The Duty to Coordinate and Cooperate
Every contract implies the duty to coordinate and cooperate, which requires the contracting parties to deal fairly, positively, and in good faith. Specifically, a contractor has the right to enjoy a least-cost performance of its contract without interference by the owner or the owner’s agents.

An owner’s lack of coordination and cooperation can lead to schedule delays or negatively impact a contractor’s least-cost performance. Typically, on a traditional design-bid-construction project, the owner and its engineer monitor project progress, but they assume limited responsibility for the coordination and performance of the contractor’s work. The contractor is contracted directly to coordinate and schedule its scope of work.

However, on multi-prime construction projects, the owner has an implied duty to actively participate in coordinating and sequencing the various prime contractors because the owner retains control over the performance of each individual prime contract. If a contractor can prove that it was delayed or disrupted due to owner-caused delay or interference caused by other prime contractors, then the owner may be liable for the delay and disruption costs. Even if the owner or owner’s agent tries to shift the responsibility of its duty to coordinate and cooperate through language in the contract documents, the owner may still be held liable for overall coordination of the various prime contractors.

Thus, an owner must be careful and aware of its coordinating duties to ensure that its actions or inactions do not negatively impact the prime contractors’ work. A breach of an owner’s implied duty to coordinate or cooperate can entitle a contractor to relief from liquidated damages or recovery delay and disruption damages under court-recognized entitlements. Entitlement examples include differing site conditions, delayed access to the work, owner maladministration, implied warranty, and constructive change.

As is required for all disputes, a contractor’s claim for a breach of the owner’s duty to coordinate or cooperate must be supported by facts and consistent with the requirements of the contract documents. It is imperative that a contractor provide the owner detailed discussion and explanation, including timely notice; demonstrate causation due to the owner’s actions or inactions, supported by contemporaneous project records; and substantiate contractor damage calculations with sufficient backup documentation.

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