Volume: 16, Issue: 5 - 03/15/2018
Construction contracts are replete with notice requirements. If the contractor sees something, discovers something, believes something, then timely written notice must be provided. It is therefore no surprise that disputes regarding the sufficiency of notices are common. Many times the dispute centers on the proper form or format of the notice.
Strict compliance with notice provisions may or may not be enforceable, and may vary between private, public and federal contracts. In this federal contract, the court ruled that substance overruled form. Read more.
Under the standard government “Specifications and Drawings for Construction” contract clause, notification of a discrepancy can be conveyed through a request for information. Nothing in the contract language or case precedent mandates a special form or format for notification.
An involuntary bankruptcy petition involving other entities within a contractor’s corporate family did not operate to stay a subcontractor’s payment claim against the contractor.
Volume: 16, Issue: 4 - 02/28/2018
A contractor's past experience is a valuable asset. Public construction procurement frequently requires experience with certain work in order to be a "technically acceptable" competitor for a contract. Private project owners also value past experience and do not rely on low price alone when awarding contracts.
The importance of past experience raises a question: Can experience be gained through the work of one's subcontractors or must the construction work be self-performed? Read more.
An offeror on a federal project is entitled to credit for the work experience of prior subcontracted work. A prime contractor is responsible for the work of its subcontractors and can therefore treat that work as its own. In the absence of solicitation language to the contrary, the prior work need not have been self-performed.
A prospective lower-tier subcontractor, not a party to a subcontract, could not invoke an arbitration clause in the subcontract. Non-parties may invoke arbitration clauses, but only when the allegations involve duties created by that contract. In this case, the duties were created by common law and state statute, not contract.
Volume: 16, Issue: 3 - 02/15/2018
When a publicly bid construction contract is awarded, the legal mandate is usually "low responsive, responsible bidder," sometimes expressed as "lowest and best bidder." In such a scenario, contract award should be based on the lowest bid, compliant with the terms of the solicitation, submitted by a bidder capable of completing the contract.
The sufficiency of the bidder has traditionally been a business assessment of the financial, technical, and administrative capabilities of the company. Some public project owners, however, have started adding other requirements. Read more.
A municipality was allowed to define "lowest and best bidder" to require bidders to contribute to employee health care plans and retirement programs. The amendment to the competitive bidding ordinance was not preempted by the federal ERISA law because the municipality acted in the capacity of a proprietor, not a regulator.
A project involved improvements to underground utility lines. No "building or structure" was involved. Consequently, a state statute limiting the enforceability of indemnification against a party's own negligence did not apply. An indemnification clause in a subcontract was fully enforceable.
Volume: 16, Issue: 2 - 01/31/2018
"Changed work" on a fixed-price contract can go both ways. If the project owner increases the scope of work, the contractor may be entitled to an equitable price increase. If the project owner decreases the scope of work, the owner may be entitled to a credit, a price decrease. So, what happens if the contractor devises a less expensive method for performing the work? Is the owner automatically entitled to a price credit? Read more