In 2020, I read many articles addressing how contractors can mitigate the effects of COVID-19 on construction projects. I also wrote similar articles, including tracking COVID-19 impacts and whether a contractor can get more time and money due to COVID-19 impacts.

Fast forward to 2022 and the new hot topic is inflation. The cost of many things used to build a project have gone up significantly the last year and a half, including lumber and plywood (+101%), copper and brass mill shapes (+52%), plastic construction products (+45%), and gypsum or drywall (+29%).

As a result, many contractors are feeling the pinch of these increased costs and find themselves in a position where they may lose money on a project if construction costs do not go back down.

Public owners are addressing the impacts of inflation on existing and new contracts in different ways. For example, the United States Department of Defense (DOD) recently issued a memorandum providing guidance to contracting officers (COs) how to deal with the impact of inflation.

Continue Reading How to Address Cost Increases Due to Inflation on Construction Projects

There are two types of differing site condition claims–Type I and Type II claims. Generally, a contractor may make a Type I differing site condition claim where the contractor encounters a subsurface or latent physical condition at the project site that differs materially from the conditions indicated in the parties’ contract.

Under a Type II claim, a contractor may assert a DSC claim where there are unknown and unusual physical conditions at the project site that differ materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the parties’ contract.

Both Type I and Type II DSC claims can be difficult to prove. Last week, after having a seven-day trial, a federal court rejected a subcontractor’s $2.4 million DSC claim in Phillips & Jordan, Inc. v. United States.

Continue Reading Federal Court Rejects Subcontractor’s $2.4 Million Differing Site Condition Claim

Payment bonds protect subcontractors, sub-subcontractors, and others who provide labor and materials for a public project. Subcontractors and others who want to make a payment bond claim must follow the legally-required steps. The required steps depend on the type of project (e.g., federal and state government projects) and the role of the company making the claim (e.g., subcontractor, sub-subcontractor, supplier to sub-subcontractor, etc.). If you do not follow the steps by the required deadlines, you may lose your payment bond rights.

This post provides a high-level overview of the steps that must be taken to perfect a payment bond claim on most Florida state and federal public projects.

Continue Reading How to Make a Payment Bond Claim on a Public Project

Many construction payment disputes come down to one key question—who is responsible for extra costs incurred while building a project? Parties frequently have competing breach-of-contract actions that focus on who is liable. But a recent federal court case shows that you should not give short shrift to the damages that flow from the alleged breach.

In Barlovento, LLC v. AUI, Inc., Civ. No. 18-1112 GJF/JHR, 2021 WL 3879072 (D.N.M. Aug. 31, 2021), the United States Air Force awarded a general contractor a $5.5 million contract to renovate a taxiway at a military base. The general contractor then subcontracted the removal and replacement of the taxiway pavement and base course. This required the subcontractor to place three layers – subgrade, base course, and concrete.

The subcontractor fell behind in its performance of the work, and ultimately, the general contractor held a meeting with the subcontractor and a potential replacement subcontractor that would perform almost all the remaining work. At that meeting, the general contractor announced that it would take the concrete paving work away from the subcontractor. Despite the decision to de-scope the original subcontractor, the general contractor ended up terminating the subcontractor for default.

Continue Reading General Contractor Awarded $22,000 of Its $1.3 Million Claim Against a Subcontractor

If you are a construction contractor on a federal government project that is default terminated, do not forget that you only have, at most, one year to appeal the termination.

Under the Federal Acquisition Regulations, the federal government, through its contracting officer, may terminate a construction contract for default. Frequently, the terminated contractor does not agree with the CO’s decision to terminate the contract, and the contractor will want to appeal the CO’s decision.

Continue Reading Contractor’s Appeal of Default Termination Dismissed as Time-Barred

After a general contractor on a federal government project allegedly terminated a subcontractor’s contract for convenience, the subcontractor sued the payment bond surety for the amounts owed to the subcontractor. In Maguire-O’Hara Construction, Inc. v. Cool Roofing Systems, Inc., the subcontractor claimed the surety was liable for the unpaid remaining balance on the subcontract of nearly $2.6 million, even though the subcontractor was only owed about $360,000 for completed work. The surety filed a motion for judgment on the pleadings seeking dismissal of the subcontractor’s $2.6 million claim, which asked the court to determine whether the subcontractor could assert a claim against the surety for unperformed work. The court’s answer? No way.

Continue Reading Federal Court Rejects Subcontractor’s Payment Bond Claim for Unperformed Work

This is the third post in a five-part series about the most common reasons for winning GAO bid protests. The third most common reason for winning a bid protest is when an agency fails to follow the evaluation criteria stated in a solicitation for proposals.

As an example, in McGoldrick Construction Services Corporation, B- 409252.2 (Comp.Gen Mar. 28, 2014), the U.S. Army Corps of Engineers issued a solicitation for construction and maintenance services. The proposal was structured as a two-phase evaluation. In the first phase, the bidders would be whittled down to a few qualified bidders that would compete for the award in the second phase.

Continue Reading Construction Bid Protests – Failure to Follow Evaluation Criteria

The coronavirus (COVID-19) is gaining speed and construction projects across the country and in Florida have reportedly been slowing or shut down as a result. It’s time for construction contractors, including those working on government projects, to consider whether they will be entitled to additional money and/or time on their projects. In this post, we will take a brief look at how things might shake out on federal government and Florida Department of Transportation (“FDOT”) projects.

Continue Reading Coronavirus and Government Construction Projects: Do Contractors Get More Money and Time?

If you are an unpaid sub-subcontractor on a federal government project, don’t forget to provide notice of your claim to the general contractor within 90 days and file a lawsuit no later than one year after last furnishing labor or material to the project or you will lose your payment bond rights. That’s exactly what happened in a recent federal court decision in which a sub-subcontractor lost its right to assert its $8.5 million claim against the co-sureties that issued a payment bond because the sub-subcontractor failed to give notice within 90 days and file a lawsuit within one year of last furnishing labor or material on a federal government project.

Continue Reading Sub-Subcontractor Loses Payment Bond Rights on $8.5 Million Claim for Failing to Provide Timely Notice and File a Lawsuit