General Contractors and Construction Managers that do work with the OFCC should be aware of the OFCC’s purported right to reject certain subcontractors without having to pay for the additional costs that usually come with going to the next subcontractor. Recently the OFCC has invoked such a right and refused to pay the additional cost to use a subcontractor acceptable to the OFCC and the local school district.
This right to reject any subcontractor by the OFCC should trouble the industry when other industry standard agreements, such as the AIA 133-2009 CM Agreement, allow the GC and/or CM to receive the difference in costs when the owner rejects a subcontractor that is otherwise qualified to perform the work. Furthermore, the arbitrary action of the OFCC in making these decisions results in certain subcontractors being effectively disbarred without having the opportunity to tell their side of the story.
Going forward, those pursuing work with the OFCC are encouraged to price the added risk that comes with the OFCC’s insistence on having the right to reject qualified low bid subcontractors without having to pay additional costs. Additionally, potential bidders should submit questions in writing during the RFP and bidding process requesting that the OFCC provide a list of unacceptable subcontractors so that this information is known upfront by all parties, rather than simply by a select few on the owner team. If the OFCC wants to reject subcontractors without recourse, then it should at least inform potential bidders of subcontractors it finds unacceptable before bids are submitted.