One tends to think of “government” in a monolithic sense, but it comprises multiple agencies … at the federal, state and local levels. Each agency awards construction contracts in its individual capacity, which leads to a question: Can one agency’s management of a construction contract cause compensable delay to another agency’s physically interrelated construction contract?

A Texas court was presented with a situation in which a state DOT project was adjacent to, and physically interrelated with, a county highway construction project. The contractor on the county job alleged it had been delayed and disrupted by activities on the state project. Was this “owner-caused” delay?

The other case in this issue involved a state procurement statute that limited bid protest rights to issues where at least 10% of the estimated contract value was called into question. Was this a matter of standing to sue, which is discretionary and can be waived? Or, was the dollar threshold an ironclad jurisdictional requirement?

Delay and disruption to a county highway project was caused by construction activities at an adjacent state DOT highway project. Though the projects were physically interrelated, the contracts were awarded and administered by separate public entities. This was not “owner-caused delay.”

A statutory requirement that a bid protest challenges a matter involving at least 10% of the estimated contract value was jurisdictional and could not be waived. A disappointed bidder that did not meet that threshold simply had no protest rights.

What is the “reasonable value” of construction work? As the term suggests, this is usually not a simple numeric determination. Two cases in this issue illustrate what “value” is not.

In one case, a lower-tier subcontractor brought a claim against the prime contractor for its fair share of a settlement with the project owner. The sub argued the amount it assigned to its extra work, which was passed up to the prime and incorporated into the consolidated claim against the owner, should be determinative.

The other case involved the pricing of a project owner’s unilateral deductive change order. The contractor contended a schedule of values used for progress-payment purposes should govern. Unfortunately for the contractor, the contract expressly prohibited such use.

The third case in this issue applies the widely used AIA performance bond document to a late completion claim. The project owner argued that recovery against the bond for the contractor’s slow performance did not require the procedural steps of a formal default termination.

A lower-tier subcontractor’s quantum meruit claim against the prime contractor for a larger share of the settlement recovered from the project owner was not supported. Figures used in negotiating the settlement of the claim against the owner were not evidence of the reasonable value of the sub’s work.

A schedule of values, based upon prospective estimates of costs, was to be used solely for progress-payment purposes. It could not be used to price a deductive change order to a fixed-price contract.

Preconditions to owner enforcement of an AIA performance bond applied not only to completion of the contracted work but also to recovery of delay damages caused by the bonded contractor. 

An arbitration panel’s award of a time extension for owner-caused delays that were concurrent with contractor-caused delays must have assumed the contractor delays were not on the schedule’s critical path. In that event, the award was arguably consistent with the terms of the contract, although the contract said the float time in the schedule belonged to the owner.

A modest line of credit and limited years in business were evidence that supported a determination that a low bidder was not “responsible.” Rejection of the low bid by a county commission was not an abuse of discretion.