PREAMBLE
The National Cooperative Highway Research Program (NCHRP) plans to award a contract for a study and report. Legal research reports sponsored by this project are published in NCHRP’s Legal Research Digest (LRD) series. Publications are made available to some libraries and to approximately 4,000 transportation lawyers and officials through the TRB distribution network.
BACKGROUND
During the COVID-19 pandemic, many transportation departments and authorities and their contractors and consultants looked to the force majeure provisions of their contracts to determine what conditions or terms would govern their performances; what risks and obligations would be upheld; and what potential waivers would apply.
The purpose of this project is to research the legal impacts that transportation agencies can expect to have as a result of an extremely unusual occurrence when the nature of the occurrence (e.g., a pandemic) is not specifically identified in contractual force majeure provisions; and the sufficiency or reasonableness of consequences for noncompliance with contract performance levels and with risk transfers.
OBJECTIVE
The objective of this research is to produce a legal research digest that addresses the following questions:
1. What are typical force majeure provisions and conditions in transportation construction, maintenance or toll road operation contracts? How did they apply to government mandated and imposed quarantine and business disruptions caused by the 2020/21 COVID-19 pandemic?
a. If force majeure clauses do apply, what are the key criteria and circumstances that weighed in favor of the conclusion that force majeure applies?
b. If force majeure clauses do apply, what performance, time of completion, and financial provisions in the contracts are affected for each side (i.e., the transportation agency and the contractor) and how would these provisions be affected?
c. If a contractor asserts or could assert force majeure as a basis for non-compliance with performance or financial provisions in a transportation contract, what defenses or remedies could a transportation agency assert to counter the claim of force majeure?
d. If a transportation agency asserts or could assert force majeure, and a contractor opposes the application of force majeure, what are the best legal arguments to make in support of the declaration of force majeure?
2. If the force majeure clause do not apply or fails to assert “pandemic”, what other language could be interpreted to be inclusive of a pandemic?
a. If a transportation contract for construction, maintenance or operation of a transportation facility has no force majeure clause, and either a transportation agency or a contractor has a physical or financial shortfall in performance under the contract, how would the cost of the shortfalls be allocated to each side in the absence of the force majeure clause?
RESEARCH IMPLEMENTATION
This research will be conducted in four tasks pursuant to a firm fixed price agreement.
The tasks will be as follows:
Task 1. Research plan and detailed report outline. The consultant will conduct background research and collect relevant material. Based on the initial but complete review of the source material, consultant will propose a detailed report outline. The outline should be about 8 to12 pages, include a proposed survey if one is to be used, and contain sufficient detail to inform the NCHRP project panel of what a 75- to 100-page report will contain. This outline should also contain the estimated pagination for each proposed section and/or subsection. This material will be submitted to NCHRP for consideration and approval.
Task 2. After approval of the work plan, the consultant should conduct additional research, and case and statutory/regulatory analysis.
Task 3. Draft report in accordance with the approved work plan (including modifications required by TRB).
Task 4. Revise report as necessary. The consultant should estimate that two revisions will be necessary. One revision may be required after review by the NCHRP staff and members of a select subcommittee. Additional revisions may be required after the full committee has reviewed the report.
