Bidders on public works contracts are regularly asked to submit additional documents with their bids. The number and complexity of these submissions increase with evolving procurement statutes and regulations. It’s not surprising that bidders start to think of them as “standard boilerplate”—the bid price is firm, but the other stuff can be cleaned up after bid opening. That may or may not be accurate.

In a recent New Jersey case, an appellate court upheld rejection of a low bid because the bid bond bore a date prior to the extended deadline for bid opening. Rejection of the second low bid was also upheld because the accompanying certificate of uncompleted work was pre-dated. In each case, the deviation was material and could not be waived. The information could not be corrected or supplemented after bid opening.

In the other case in this issue, the South Dakota Supreme Court addressed for the first time the need for expert opinion to support a project owner’s claims against design professionals and a specialty constructor.

A low bid was nonresponsive due to a bid bond that pre-dated the bid opening date. A second low bid was nonresponsive due to a certification of uncompleted work that similarly pre-dated the bid opening date.

Expert testimony was required to maintain claims against an architect, an engineer, and a specialty trade contractor. The project owner’s CEO did not qualify, as he was not a licensed design professional and had no experience in the trade work in question.

Liquidated damages for late completion of a construction project are generally enforceable if the daily amount set at the time of contract formation represents a reasonable estimation of the actual damages the owner will incur in the event of late completion. A Texas court recently addressed a situation in which the owner’s contractual calculation for liquidated damages appeared arbitrary.

The municipal project owner had stipulated a daily rate of $5,000 but offered no explanation of how that amount had been calculated. The owner relied solely on the contractual recitation that the contractor agreed the amount was a reasonable estimation of actual damages. Additionally, municipal officials repeatedly made public statements that the amount was a “penalty” that should “motivate” the contractor.

The second case in this issue involves the state residency of construction companies that are limited liability corporations. A federal appeals court ruled an LLC can establish state residency only if each individual member of the LLC is a resident of that state.

The third case considers the professional services exception to a state consumer fraud statute. An architect is exempt when providing traditional architectural services. There is no exception, however, if the architect engages in the marketing or promotion of real estate.

A liquidated damages clause was unenforceable because there was no evidence the project owner had made a reasonable calculation, prior to contract award, of the actual damages the owner might incur as a result of late completion. The contractor’s contractual agreement to the daily rate, in itself, was insufficient.

In order to establish “diversity” of citizenship for purposes of federal court jurisdiction, an LLC had to show the residency of each individual member.

Traditional architectural services should be included in the “licensed professional services” exception to liability under a state consumer fraud statute. But if an architect engages in the promotion or marketing of real estate, the exception will not apply.

The use of unlicensed trade subcontractors can be potent ammunition when a project owner asserts claims against a contractor for deficient work. How should this evidence be treated when the claimant attempts to use it to influence the fact finder?

A condominium association sued the builder of the project for defective construction. Statements indicating the unlicensed status of two key subcontractors were admitted into evidence during the jury trial. However, the trial judge refused to instruct the jury that the use of unlicensed subs was permissible.

The other case in this issue involves a written subcontract agreement that was never signed by either party. The contractor and subcontractor signed eight change orders, each of which referenced the unsigned subcontract. Was the arbitration clause in the subcontract binding on the parties?

While a state statute authorized the use of unlicensed subcontractors working under the supervision of a licensed contractor, a builder accused of deficient work was not entitled to a jury instruction to the effect that its use of unlicensed trade subs had been permissible.

Executed bilateral change orders incorporated the terms of an unsigned subcontract. Consequently, an arbitration clause in the subcontract agreement was binding on the parties.