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Many subcontractors assume that the oral promise of a general contractor to enter into a contract at some future point can be enforced against the contractor when they have submitted a proposal that the contractor incorporated into its bid. However, as illustrated by the case of Trident Construction Co. Inc. v. The Austin Co., 272 F. Supp. 2d 566 (D.S.C. 2003), such a promise may not be worth the paper it's not written on.

The case

In Trident, a GC, a steel erection subcontractor, and a steel supplier met to discuss working together to obtain a Navy contract for the construction of an airplane hangar.

The subcontractor claimed that an agreement was forged in which the three parties agreed to join together exclusively as a team to pursue the project, and that, if the GC received the prime contract from the Navy, the subcontractor would receive the subcontract and the supplier would be the material supplier. Over the next several months, the subcontractor submitted several proposals to the GC, who requested various changes. The GC was awarded the prime contract based on its bid, which included the subcontractor's proposal to erect the hangar.

While the GC used the subcontractor's proposal in its bid, it intended all along to put the subcontract up for competitive bidding in hopes of obtaining a less-expensive proposal. After it was awarded the prime contract, the GC solicited other bids while at the same time continuing to negotiate with the subcontractor, even sending the subcontractor a proposed written contract.

When the subcontractor heard rumors that the GC was soliciting other bids, it contacted the GC who denied the rumors and confirmed that the parties were still a team. But the GC entered into a subcontract with a different entity. The subcontractor sued the GC for breach of contract, promissory estoppel, and unjust enrichment.