By Bruce Jervis
When a project owner elects to terminate a contract for its own convenience, the owner chooses a “no fault” termination. Rather than terminating the contract for cause – a default termination – the owner exercises its contractual right to end the relationship, pay for work performed to date and compensate the contractor for the administrative and settlement costs of the termination.
Given the “no fault” nature of a convenience termination, isn’t it inconsistent to allow the project owner to recover damages from the contractor? Not necessarily, according to the Connecticut Supreme Court. An owner was allowed to assess liquidated damages for late project completion after terminating the contract for the owner’s convenience. The contract clause reserved “any other right or remedy” of the owner. Read more.
Indiana Gov. Mike Pence signed a bill this week that will eliminate the wage rates that must be paid on state or local government projects according to The Washington Times. Currently determined by government boards composed of labor and contractor representatives, the new law is intended to let free market forces determine wage rates. Supporters say the bill will lower project costs as much as 20%. Opponents to the bill say that it will open the door for low-paying, out-of-state contractors. The bill takes effect in July. Read the full story here:
Government work represents approximately 27%-28% of all construction dollars put in place annually according to Department of Commerce monthly spending reports. Federal and federally funded public works represent a good chunk of this work. One of the challenges we have observed in government contracting is complying with a vast set of rules and regulations; for federal work, this includes the Federal Acquisition Regulation (FAR).
To learn more about these challenges and issues, WPL Publishing Co., Inc. has decided to conduct a survey of our reader’s experiences in federal, state and local government construction contracting. This includes the procurement process, project start-up, contract administration, handling of change orders and project closeout. If you perform work on government work, please take a few minutes to complete our short survey. Results will be published in June. The survey can be accessed here. (https://www.surveymonkey.com/s/GovContracting2015A)
Please feel free to forward this email to others in your organization that work on government projects. Thank you.