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Unclear incorporation of RFP-response language kills guarantee of maximum price

A Nebraska case reinforces the lesson that incorporation-by-reference language must be clear:

  • A school district issued a request for proposal (RFP) for architectural services that would be rendered in connection with the construction and renovation of three schools. See Facilities Cost Mgmt. Group v. Otoe Cty. Sch. Dist., — N.W. —, 291 Neb. 642 (2015) (affirming partial summary judgment).
  • After an architecture firm submitted a response to the RFP, the school district followed up with additional written questions. One of those questions was whether the architectural firm guaranteed a maximum price — to which the architecture firm responded “yes.” See id., 291 Neb. at 647.
  • The architecture firm was awarded the contract, which stated that “[t]he Architect’s Response to the District’s Request for Proposal is attached to this Agreement for general purposes including overviews of projects and services.” Id. at 645-46 (emphasis added).
  • But the architect firm’s response to the RFP wasn’t attached to the contract; for that matter, it wasn’t even titled as stated in the contract provision. See id. at 654.
  • After cost overruns, the school district stopped paying the architecture firm’s invoices; the firm sued for the unpaid balance.
  • The school district defended in part on the ground that the contract was subject to the guaranteed maximum price stated in the architect firm’s “yes” response to the school district’s question.
  • The trial court granted partial summary judgment in favor of the architecture firm, holding that the firm’s RFP response was not incorporated by reference into the contract.
  • Agreeing with the trial court, the state’s supreme court held that “[t]he expression ‘for general reference purposes,’ interesting though it may be, contrasts with a provision, common in contract law, which incorporates another document by reference. … [The contract language] simply does not incorporate [the architect firm’s] responses into the contract.” Id. at 653-54.

(The supreme court reversed on another point, though, and remanded for a new trial.)

Caution: It’s not hard to see how another court might have held that the contract did incorporate the architecture firm’s guaranteed-maximum-price response.

Still, the contract’s drafters, who presumably worked for the school district, might have been more clear about their client’s intent.

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