Court documents regarding the recently reported case ruling in favor of Permasteelisa North America (PNA) revealed some interesting insight into the pre-construction jockeying between glazier and general contractor as the parties work to agree on a contract.
The appeal opinion was in response to a decision by a U.S. District Court in Wisconsin. PNA was the defendant in a case brought by general contractor C.G. Schmidt Inc. (CGS) in which it contended that PNA had walked away from a contract at the last minute, leaving CGS to find an alternative glazing contractor at a higher price. CGS had alleged breach of contract and promissory estoppel.
Here’s how it happened:
CGS sent a blank contract and a manual stating that the bidder must accept all terms of the standard CGS subcontract as a condition for submitting a bid.
PNA submitted a bid with a base price, pricing schedule, alternate pricing and project scope signed by a vice president of the company. In May 2013, CGS selected PNA, but said it was not ready to go to contract yet as it did not have finalized, signed contracts with the owner.
Over the next 12 months, back-and-forth between the parties continued with value-engineering changes, price changes and discussions about some of the contract terms, which PNA raised a number of times. A kick-off meeting attended by both sides was held in late March 2014.
Much of the delay was because CGS had to continue to negotiate a guaranteed maximum price amendment with the owners of the project.
Court documents showed that CGS needed the amendment finalized and in place before it would commit to pay PNA. That finally happened, but there remained discussion about some of the terms, including liquidated damages and delay damages.
On June 13, 2014, CGS sent over a contract.
PNA originally submitted a bid to construct the curtainwall for $12,675,421. After CGS had agreed to the guaranteed price amendment with the owner and consulted with PNA, PNA’s revised bid was sent out at $8,047,368. Yet, six days later the general sent over a revised draft with a price about $220,000 less and then another revision eight days later for about $27,000 less.
On a job that was originally bid at nearly $13 million, the general contractor now had an expectation of purchasing it for $7.8 million.
Because of this and the fact that it had originally planned to produce the curtainwall in Thailand—which was no longer a viable option due to civil unrest there—PNA refused to honor the bid, and CGS sued.