Volume: 16, Issue: 9 - 05/17/2018
Most state mechanic’s lien statutes recognize that demolition is an improvement to real estate and therefore a lienable service. In many situations, there can be no redevelopment, no site remediation, and no new construction without demolition.
The lien statutes have done well in recognizing that de-construction is a phase of construction. However, the lien statutes have failed to account for an important aspect of demolition – the salvage of equipment and materials. Mechanic’s lien statutes are structured around the “contract price.” On many demolition projects, the salvage rights and salvage revenue is a fundamental component of the contractor’s compensation. How does that factor into the contract price? Read more.
The “lien fund” available to unpaid subcontractors is not limited to the earned amount of the stipulated prime contract price, but can include revenue derived from salvage rights under a demolition contract.
A “Best-Value Tradeoff” analysis was supported by a head-to-head technical comparison justifying a price premium. Unsupported comments regarding possible cost savings from the higher price, technically superior proposal were extraneous to the comparison and did not undermine the analysis.
Volume: 16, Issue: 8 - 05/02/2018
One of the fundamental purposes of a written construction contract, signed by each party, is to refute the allegation of oral side agreements, implied agreements, or other agreements relating to the same scope of work. When properly drafted, a contract should serve as a complete, integrated agreement, superseding any negotiations or discussions relating to the work. A party’s remedy is under the terms of the written contract, not in equity and not under some other alleged agreement. Read more.
The Kentucky Supreme Court has ruled that a subcontract on a federal HUBZone set-aside was a complete, integrated agreement. The subcontractor could not claim compensation for performing prime contract work beyond the scope of the written subcontract. A concurring opinion said the sub’s claim was invalid because it alleged violations of the subcontracting limitation for HUBZone projects.
The “look-back” period for repeat safety violations, stated in an OSHA manual, created no substantive limitation rights for contractors and was not binding on the government. The period stated in the manual was for the guidance of OSHA personnel and was only intended to promote uniformity.
Volume: 16, Issue: 7 - 04/13/2018
The scope and ramifications of a pre-bid site inspection are frequently misunderstood. When submitting a bid, the contractor probably acknowledges it has familiarized itself with the physical conditions in the field. In fact, the contractor may or may not have availed itself of the opportunity to inspect the site prior to bid submittal. In either event, the contractor will be charged with knowledge of site conditions that could have been observed during a reasonable inspection.
A federal appeals court recently applied this rule. A contractor, who failed to participate in a pre-bid site inspection, was on notice of saturated subsurface soils. Such conditions were visible on the surface of the site, only 100 feet from the excavation area. Read more.
Bidders are not required to conduct an independent pre-bid subsurface investigation. However, every contractor is charged with knowledge of site conditions that could have been observed during a reasonable pre-bid site inspection. This includes soil conditions visible on the surface.
A project owner could not include the amount of subcontractor mechanic’s liens in a judgment against the prime contractor and then contest the validity of those liens. Under the “election of remedies” doctrine, the owner was precluded from defending against the liens.
Volume: 16, Issue: 6 - 03/30/2018
Public works contracts often mandate certification of sizable claims for accuracy and completeness. The federal Contract Disputes Act originated this requirement and it has been replicated by many state and local jurisdictions. Failure to certify can be fatal to a claim, as the requirement is frequently jurisdictional.
On a recent federal project, the contractor asserted claims for delay and retainage. The government terminated the contract for default. The contractor appealed, now claiming that defective government specifications were impossible to perform. None of the claims were certified. Read more.
New Library Additions
Attention Construction Claims Advisor subscribers. This week we have added two of our more popular webinars from 2017 to the Construction Claims Library. Both webinars are now available as a download for your use:
- Practical Construction Law for Architects, Engineers and Construction Managers
- Small Unmanned Aerial Systems: Keep Your Drones from Going Rogue