VOLUME 3   ISSUE 12   MARCH 21, 2014


By Bruce Jervis


Some payment schedules are structured as line items of estimated quantities of unit-priced work. When pricing its bid, the contractor necessarily allocated project overhead and anticipated profit among the line items. The contractor will be paid for the actual quantities of work performed. But what happens if the project owner deletes entire line items of work?


In theory, the contractor should be fine if it allocated overhead and profit evenly among the unit prices. A reduced scope of work should reduce project overhead costs. And, a contractor cannot reasonably expect profit on unperformed work or unincurred costs. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Owner Allowed to Delete Entire Line Items of Unit-Priced Work
  • Miller Act One-Year Filing Period Ruled Merely Procedural
  • ‘Unreasonably’ Low Bid Price Justified by Different Technical Approach


By Steve Rizer


Congressional legislation to reinvigorate the U.S. Small Business Administration’s (SBA) Bond Guarantee Program (BGP) inched closer toward enactment earlier this month, but even if the bill (H.R. 776) gets passed into law, would BGP -- a program whose mission is to obtain surety bonds for small and emerging contractors so that they can work on public projects -- be operating the way it should?


The Surety & Fidelity Association of America (SFAA) has been working with Congress and SBA on comprehensive overhaul of the program, but the necessary support for such a major change has proven elusive in recent times. Rather, to reinvigorate the program, Congress recently began to enact some key changes by including them in larger procurement legislation. In 2012, Congress enacted legislation that permanently raises the maximum amount of the bond that SBA can guarantee from $2 million to $6.5 million and prevents the SBA from unraveling bond guarantees made with SBA’s prior approval. Another new provision permits SBA to guarantee a bond up to $10 million if a contracting officer of a federal agency certified that such a bond guarantee is necessary. SBA made the higher bond guarantees available soon after the law became effective. ... Read more.


By Scott Turner


A state supreme court has held that a commercial general liability (CGL) policy’s “Other Insurance” clause could never relieve the issuing insurance company of its duty to immediately defend its insured, including additional insureds, even though that clause provided its coverage was excess to any other, available, primary CGL coverage and other primary policies were, in fact, available to cover the claim. Thus, “Other Insurance” clauses only can govern the later division of responsibility between those insurers for the cost of defending the insured. They cannot be used against an insured to deny a tender of defense. ... Read more.


By Steve Rizer


A recent survey conducted by JB Knowledge Technologies Inc. indicated that nearly 40 percent of commercial builders are employing some form of building information modeling (BIM) technology, but with BIM cloud solutions emerging, how will this number fluctuate?


In an interview with ConstructionPro Week, JB Knowledge President James Benham predicted that with BIM cloud solutions becoming available, “this number will only continue to grow, regardless of individual users’ hardware, allowing BIM tools to be an option for even the smallest of construction IT budgets. As the BIM data sets get larger and the cloud makes them more accessible, augmented-reality solutions … will create major competitive advantages.” ... Read more.





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