PROBLEM 37 PAYMENT TO CONTRACTORS Problem: The Stone Company, contractors for the new elementary building in Milton, N. K., has presented to the Board of Education its statement of the amount due to date for services rendered in connection with the contract for this building. The bill was presented in the form of the architect's certificate shown here. Mr. Charles Adams, a newly elected member of the Board, objected to the payment of the bill because the Board itself had not yet had the opportunity of inspecting the progress of the work done by the contractors. Assignment 1. Was Mr. Adams justified in his opposition to payment of this bill? 2. Are members of Boards of Education personally liable in case of overpayments to contractors? 3. Does the usual architect's contract with a Board of Education place the responsibility for certification on the architect? 4. Give illustrations of how it is possible for overpayments to occur. 5. Assume that overpayments have been made beyond the cost of the work done and that the contractor refuses to complete the work, what protection should have been provided the Board of Education against loss? 6. The American Institute of Architects' standard form of bond for faithful performance of contracts is reproduced below. What features of this bond offer the greatest protection to Boards of Education? STEEPLE, N. K. THIS IS TO CERTIFY That under the terms of the contract dated December 3rd, 1925 for work upon NEW ELEMENTARY SCHOOL, The Stone Company of Milton, N. K. THE STANDARD FORM OF BOND1 KNOW ALL MEN: That we. (Here insert the name and address or legal title of the Contractor.) hereinafter called the Principal, and..... (Here insert the name and address or legal title of one or more sureties.) and and hereinafter called the Surety or Sureties, are held and firmly bound unto (Here insert the name and address or legal title of the Owner.) hereinafter called the Owner, in the sum of ($ .) for the payment whereof the Principal and the Surety or Sureties bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly, by these presents. WHEREAS, the Principal has, by means of a written Agreement, dated.. .entered into a contract with the Owner for. a copy of which Agreement is by reference made a part hereof; Now, THEREFORE, the Condition of this Obligation is such that if the Principal shall faithfully perform the Contract on his part, and satisfy all claims and demands, incurred for the same, and shall fully 1 For use in connection with the third edition of the standard form of agreement and general conditions of the contract. This form has been approved by the National Association of Builders' Exchanges, the National Association of Master Plumbers, the National Association of Sheet Metal Contractors of the United States, the National Electrical Contractors' Association of the United States, the National Association of Marble Dealers, and the Heating and Piping Contractors' National Association. Copyright, 1915, by the American Institute of Architects, the Octagon, Washington, D. C. indemnify and save harmless the Owner from all cost and damage which he may suffer by reason of failure so to do, and shall fully reimburse and repay the Owner all outlay and expense which the Owner may incur in making good any such default, and shall pay all persons who have contracts directly with the Principal for labor or materials, then this obligation shall be null and void; otherwise it shall remain in full force and effect. PROVIDED however, that no suit, action or proceeding by reason of any default whatever shall be brought on this Bond after.... ..months from the day on which the final payment under the Contract falls due. AND PROVIDED, that any alterations which may be made in the terms of the Contract, or in the work to be done under it, or the giving by the Owner of any extension of time for the performance of the Contract, or any other forbearance on the part of either the Owner or the Principal to the other shall not in any way release the Principal and the Surety or Sureties, or either or any of them, their heirs, executors, administrators, successors or assigns from their liability hereunder, notice to the Surety or Sureties of any such alteration, extension or forbearance being hereby waived. BIBLIOGRAPHY Agreement with Architect. National School Building Journal, 4:10:443, 463. 465, October, 1923; 4:11: 520-23, 525, 527, 529, 531, November, 1923. AMERICAN INSTITUTE OF ARCHITECTS. Documents relating to this subject. American Institute of Architects, The Octagon, Washington, D. C. DONOVAN, J. J. ET AL. School Architecture-Principles and Practices. Macmillan, 1921. EVANS, E. J. Building Contracts. E. P. Dutton, 1922. HENZLIK, F. E. Rights and Liabilities of Public School Boards Under Capital Outlay Contracts, pp. 18-100. Bureau of Publications, Teachers College, Columbia University, 1924. LOCKHART, G. L. Public Schools-Their Construction, Heating, Ventilating, Sanitation, Lighting, and Equipment, pp. 121-24, 131-140. H. W. Kingston Co., St. Paul, Minn., 1918. MILLS, W. T. American School Building Standards. Franklin Educational Publishing Co., Columbus, Ohio, 1915. Simplifying School Building Contracts. 66:88, June, 1923. American School Board Journal, |