Volume: 15, Issue: 17 - 09/15/2017
By Bruce Jervis
For a contractor with a claim on a federal construction project, an essential occurrence is a “final decision” by the government contracting officer. Ideally, this is a formal written response addressing the merits of the claim. But if the contracting officer declines to respond within 60 days, it becomes a “deemed denial” of the claim. A final decision, formal or deemed, is a jurisdictional prerequisite to the contractor’s right to appeal. Read more.
A property owner complied with the statutory scheme for transferring a mechanic’s lien from the real estate to a bond. Notice to the contractor was sufficient. Notice to the contractor’s attorney of record was not required. When the contractor failed to sue on the bond in a timely manner, the lien was extinguished by operation of law. The court clerk was obligated to release the bond. The contractor was not denied due process of law.
The Civilian Board of Contract Appeals has clarified a provision of the Contract Disputes Act that empowers the board to direct a contracting officer to issue a timely decision on a claim. The board can shorten an extension taken by a contracting officer, but it cannot force a written decision, leaving the contractor to appeal a “deemed denial” of its claim.
Volume: 15, Issue: 16 - 08/31/2017
By Bruce Jervis
The problem of inconsistent dispute resolution mechanisms is widely acknowledged in the construction industry. An owner-contractor agreement calls for binding arbitration, but the subcontracts do not, allowing suits in court. The designers have no agreements with the constructors and no incentive to coordinate dispute resolution mechanisms. Read more.
A subcontractor litigated, during an arbitration proceeding with the prime contractor, the damages it incurred as a result of an allegedly defective design. The subcontractor was precluded from re-litigating the matter in a negligence suit against the design team.
A state statute awarding attorney fees to the prevailing party in a public works contract dispute did not apply to a public project owner’s recovery of attorney fees from sureties who dishonored a payment bond. The owner’s recovery of fees was not limited by the statute and the owner could recover in full under common law.
Volume: 15, Issue: 15 - 08/15/2017
If a project owner extends the performance period for an early phase of the work, shouldn’t it follow that the project completion deadline would be extended commensurately? Not necessarily. A recent decision illustrates that the prior extension must involve work on the schedule’s critical path – the sequence of work on a project that will take the shortest time to complete. Read more.
A state statute authorized public/private partnerships for the procurement of transportation projects. But the statute failed to confer protest rights on disappointed offerors, granting protest rights only to successful offerors. Only the legislature, not the courts, could correct this apparent incongruity.
On a contract with phased work, the government’s extensions of deadlines for individual phases did not mandate a commensurate extension of the overall project completion deadline. The contractor failed to show the impact of changes on the schedule’s critical path.
Volume: 15, Issue: 14 - 07/31/2017
Contractors choose to operate as corporations or limited liability companies for a number of good reasons. One is to isolate financial responsibility at the company level, without recourse against the individual company owners. For this to be effective, however, the individuals must respect the integrity of the business entity. Read more.