In an extraordinary decision, the U.S. Civilian Board of Contract Appeals upheld the right of Kiewit-Turner, JV, to stop work and walk off a VA hospital project in Colorado.
In Appeal of Kiewit-Turner, JV, CBCA 3450 (12/9/14), the Board found that the VA's position that the contractor had to complete a $700 to $900 million+ project for $604 million was taken in bad faith, since the VA knew the cost would be significantly higher, and neither reined in its A/E firm nor was willing to ask Congress for more money. The Board was not willing to hold the contractor to the typical "complete the work and file a claim" process, which would require the contractor (and its pay-if-paid subs) to finance the work for hundreds of millions of dollars.
What makes this decision so groundbreaking is a board of contract appeals seldom will listen to - let alone grant - a request from a contractor for "declaratory relief," allowing the contractor to walk off the job. Kiewit-Turner has started demobilization, and we understand that the VA and the joint venture are now "in negotiations" over terms for Kiewit-Turner's possible return to the project.
While this was a particularly egregious situation, there is some room for application to other situations. For example, if an owner arrogantly attempts to force a contractor to finance construction far beyond the scope of the original agreement, it is possible that a board, court or arbitrator could decide that the contractor has the right to refuse.