Volume: 17, Issue: 17 - 09/16/2019
The federal courts, over the past four decades, have developed clear parameters for contractor recovery of unabsorbed home office overhead incurred as a result of owner-caused delay. An equation known as the “Eichleay formula” is used to measure these damages, and the courts have articulated prerequisites for the use of the formula.
Many state appellate courts, rather than “reinvent the wheel,” have adopted the federal rule. Ohio is among those states. On a recent Ohio case, an appeals court upheld denial of claimed unabsorbed overhead costs since all the requirements of Eichleay were not met. Read more.
A project owner’s nine-month extension of the contract period did not force the contractor into a “standby” position that prevented the contractor from taking on replacement work. Consequently, the contractor was not entitled to recover unabsorbed home office overhead in accordance with the Eichleay formula.
A California appeals court has ruled that a project owner could not circumvent a statute of limitations for professional negligence by characterizing its claim against an architect as a breach of contract.
A statutory seven-day period for filing a bid protest started to run on the date the contract was advertised for bid, not the date the bidder’s low bid was rejected. The bidder protested the legality of a requirement to submit a certification of E-Verify approval of workers within seven days of bid opening.
Volume: 17, Issue: 16 - 08/30/2019
A statute of limitations does not start to run until damage is, or reasonably should be, discovered. For those who design or construct improvements to real property, this creates a very long liability tail. The response has been state enactment of statutes of repose. The time period of these statutes commences upon a stipulated date – typically substantial completion of the project. When the time period expires, actual or prospective claims are extinguished. Even claims for losses that have not yet occurred are extinguished. A recent case show's how the Ohio Supreme Court addresses breach of contract allegations against architects and engineers. A second case highlights what subcontractors are required and not required to do before exercising lien rights. Read more.
Building Information Modeling (BIM) has firmly established itself with certain segments of the construction industry, and will continue to expand in scope and usage. WPL has provided online training webinars to the industry since 2008, playing a key role in helping firms implement BIM, with some firms becoming leaders in the industry. For the benefit of our current and future subscribers, WPL has now made it's entire BIM training library of 24+ recorded webinars available free to those with active subscriptions.
A 10-year statute of repose pertaining to the design and construction of improvements to real property extinguished claims for breach of contract as well as negligence. The statute, when read as a whole, was intended to protect designers and constructors against stale claims in general.
Unpaid subcontractors were not required to sue the prime contractor for payment before enforcing their mechanic’s lien rights against the project owner. Exhaustion of contract remedies is not required. But, there were discrepancies between the subcontractors’ payment invoices and the prime’s project activity breakdown, which raised issues regarding the correct lien amounts.
Volume: 17, Issue: 15 - 08/15/2019
It is becoming axiomatic that a contractor cannot prove owner-caused delay to project completion without critical path method (CPM) scheduling evidence. This was illustrated again in a recent case from the District of Columbia.
The public works contract required the contractor to maintain updated CPM schedules during construction. The contractor failed to do so, updating the schedule only twice over 14 months. The court said contemporaneous updates would have been the contractor’s strongest evidence. But the contractor could also rely on after-the-fact CPM analysis. Unfortunately, the contractor’s scheduling evidence was presented by an employee who did not qualify as a scheduling expert. Read more.
A contractor seeking recovery for extended overhead incurred as a result of owner-caused delay had the burden of proving delay to overall project completion. The contractor offered no contemporaneous CPM schedule updates and no expert analysis of the effect of the delay on the overall project performance period. The contractor’s claim failed for lack of evidence.
It was unclear whether an architectural services agreement calling for a design fee of 2% of construction costs had been abrogated and replaced by a subsequent agreement calling for the architect to receive a condominium unit as his design fee.