Opinion ID: 901222
Heading Depth: 1
Heading Rank: 6

Heading: City's ClaimLump Sum Contract

Text: [¶ 8.] The City argues that the contract is a lump sum contract, and that Prunty was required to submit change orders for additional units and have prior authorization in order to be paid for any additional work beyond the contract amount. Under a lump-sum agreement, the contractor agrees to complete the work for a set price, regardless of the actual costs incurred in completing the construction. United States v. Johnson, 937 F.2d 392, n. 2 (8thCir.1991). The City relies on the contract provision that specified a total sum of $925,587.77. The provision states: The CONTRACTOR agrees to perform all of the WORK described in the CONTRACT DOCUMENTS and comply with the terms therein for the sum of $925,587.77 or as shown in the BID schedule. The City claims that Prunty is only entitled to the lump sum amount specified in the contract. The only way Prunty would be entitled to amounts in excess of the contract amount is if Prunty had submitted and the City had approved a change order prior to the work being done. The City further argues that municipalities cannot be held liable for sums greater than the approved original bid because subsequent increases were not approved at a duly-authorized meeting as required by SDCL 9-1-5, 5-18-11 & 5-18-19.