When a subcontractor breaches its agreement, the contractor is forced to expend considerable time and effort dealing with the problem. The contractor is clearly entitled to recover the cost of corrective or replacement work as direct damages for breach of contract. Can the contractor also recover compensation for the time its employees devoted to the problem as a consequence of the breach?

An Indiana appellate court recently answered that question in the affirmative. A fabrication subcontractor shipped nonconforming materials to the job site. The contractor’s administrative staff spent hours obtaining replacement materials from another fabricator. The contractor was allowed to recover the in-house cost of those efforts, although the method of proof was surprising.

The second case in this issue addresses the mandatory use of project labor agreements on large federal construction projects. A Biden-era executive order appears to restrict the “full and open competition” required by the Competition in Contracting Act.

The third case involves a contractor’s sponsorship of a subcontractor delay claim against a public project owner. The sub was hindered by a no-damages-for-delay clause. Did the contractor owe a duty to the subcontractor to effectively argue that well-recognized exceptions to enforceability of the clause might apply?

When a fabrication subcontractor delivered noncompliant materials, the contractor could recover consequential damages for the time its employees spent dealing with the problem. Those damages were supported by a chart of “typical” hourly rates drafted in preparation for the litigation.

An executive order mandating the use of project labor agreements on large federal construction projects without any evaluation of benefit versus cost risk violated the Competition in Contracting Act and was unenforceable.

A subcontractor alleged facts that, if proven, would invoke one of the four exceptions to enforceability of no-damages-for-delay clauses under New York law.

State mechanic’s lien statutes have one thing in common: a filing period that starts to run on the date the lien claimant last furnished labor or materials to the project. To benefit from this statutory payment remedy, the claimant must strictly adhere to the requirement. No additional entitlement may be asserted after the deadline. But what if the claimant wants to reduce the amount of its lien to make it comport with the proof the claimant is able to offer in support of its payment claim?

A Colorado court recently allowed untimely reductive lien amendments. The reductions did not prove the initial timely lien filing had been “excessive” and therefore invalid. Nor did the late amendments taint the timeliness of the original filing. The reductions simply corrected honest mistakes in the initial payment calculation based upon information the claimant did not discover until after the filing deadline.

The second case in this issue involved the services of a licensed professional at the job site of a public project. Was the professional required by state statute to be registered as a public works contractor? Were the services considered public work?

Reductive amendments to a mechanic’s lien statement did not invalidate a timely lien despite being filed outside the statutory lien period. The amendments were based on information unknown to the claimant at the time of the initial filing. They were not for the purpose of curing an excessive lien.

A licensed professional providing on-site service on a public construction project was not required to be registered under a state contractor registration statute. The professional was not performing “public work” as defined in the prevailing wage statute.

Many successful claimants under federal contracts are entitled to attorney fees and other litigation expenses under the Equal Access to Justice Act. However, the government will not be liable for fees and expenses if its original denial of the claim is “substantially justified.” Does this refer to the government’s overall response to a consolidated claim or just the portion of the claim upon which the contractor prevailed on appeal? The U.S. Court of Appeals for the Federal Circuit recently ruled on this issue.

The Federal Circuit said the statute, as amended, requires examination of the overall administrative record. However, it is appropriate—and standard practice—to focus on the successful portion of the contractor’s appeal. The government’s conduct and reasoning in denying that portion of the claim is crucial.

The second case in this issue involves a contractor’s adoption of a subcontractor proposal as a term of the subcontract agreement. Language in that proposal created an unexpected problem for the contractor regarding its Commercial General Liability insurance coverage.

The third case addresses the proper way to appeal denial of a claim on a federal contract. The appeal must allege facts and make arguments consistent with the claim initially submitted to the government contracting officer. Otherwise, the contractor has essentially skipped that step of the claim process, and the appellate board has no jurisdiction.

In analyzing a contractor application for attorney fees under the Equal Access to Justice Act, a tribunal must judge the government’s “substantial justification” in the context of the entirety of the administrative record. It is proper, however, to focus on the portion of the claim upon which the contractor prevailed.

By converting a subcontractor proposal into a subcontract agreement, a prime contractor agreed to language contrary to the requirements of the contractor’s Commercial General Liability insurance policy. There was no coverage for property damage caused by the subcontractor’s work.