Volume: 16, Issue: 21 - 11/15/2018
A mechanic’s lien is usually a contractor’s best form of payment security on a private construction project. A properly filed lien gives the contractor considerable leverage, impeding the project owner’s ability to convey or borrow against the property. Consequently, most state mechanic’s lien laws provide some protections for owners. One is the discharge of liens that willfully exaggerate the amount.
Mechanic’s liens secure payment for the value of the work performed. The best evidence of value is the contract price. In a recent New York case, the contractor submitted requisitions reflecting 78% completion of its scope of work. The contractor filed a lien that reflected a much higher percentage of completion. The contractor said there was an additional unsubmitted requisition supporting the value of this additional work. Read more.
An unsubmitted requisition could be considered in determining the value of the work performed. The amount of a mechanic’s lien had not necessarily been willfully exaggerated. There is no rule of law that only requisitioned work can be considered regarding the value of the work completed as of the date of a lien filing.
While a contractor’s appeal of a default termination was pending, the contractor was allowed to pursue a separate action for recovery of termination for convenience costs. Although entitlement to those costs had not yet been determined, the appeals board could avoid “litigative inefficiency” through its case management of the concurrent appeals.
Volume: 16, Issue: 20 - 10/31/2018
A classic claim for a differing site condition is easy to summarize: the actual physical conditions in the field differed from the conditions indicated in the contract documents. In application, however, this can become difficult.
The overriding issue is the representations in the contract documents. Project owners sometimes make empirical statements whose accuracy or reliability they then disclaim. Courts are skeptical of this duplicity. More problematic is silence regarding the details of site conditions. To what extent are contractors allowed to interpret, draw inferences, and make conclusions? Read more.
Contract documents for rehabilitation of a levee did not make affirmative representations regarding the suitability or constructability of subgrade materials. The contractor made impermissible assumptions and could not rely on contract silence to support its $4.5 million claim for a differing site condition.
Under the Contract Disputes Act, an agency may delay issuance of a final decision on a contractor claim beyond the 60-day limit. The extension must be based on reasonable considerations. This does not include the agency’s own internal staffing problems.
Volume: 16, Issue: 19 - 10/15/2018
Most states have some version of a “prevailing wage” statute. These laws allow the establishment of minimum compensation levels for workers on publicly funded construction projects and are based on trade and location. The stated purpose of the laws is to attract and retain skilled workers for public projects. The stipulated wage levels also enable union contractors to compete with non-union contractors when bidding public contracts.
Not all workers involved in the construction process are covered by prevailing wage laws. Coverage is usually limited to on-site workers, so parties involved in off-site fabrication or truck drivers delivering materials to a job site may be excluded; but concrete truck drivers may be an exception. Read more.
Favorable treatment of ready-mix concrete delivery drivers under a state prevailing wage statute could withstand an Equal Protection challenge. The drivers had more involvement with on-site construction activities than drivers of other vehicles delivering construction materials. And, that participation required a higher level of skill.
Where a contractor was in material breach of the construction contract, the project owner’s recovery was not limited to the cost of completion of the work. The owner could treat the contract as void and elect to be restored to the financial position it occupied prior to entering into the contract.
Volume: 16, Issue: 18 - 09/28/2018
Long before the current trade disputes, the Buy American Act was passed to support domestic producers of goods. Enacted during the Herbert Hoover Administration, the law provides a federal procurement preference for U.S. manufactured products. The Federal Acquisition Regulation has implemented this policy by requiring the use of domestic products unless certain stipulated exceptions apply. In a recent case, a bidder filed an exception on construction materials and was improperly rejected as non-responsive. Read more.