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.

Claims for additional compensation are sometimes limited, by statute or contract clause, to the direct cost of contract performance. This is typically labor, materials and equipment furnished to the project. A Colorado court was recently presented with a situation where an unpaid subcontractor included contested, unliquidated delay damages in its claim.

The state public works statute allows unpaid subcontractors to put a hold on undisbursed contract funds held by the public project owner, but the hold is limited to amounts due for labor, materials and supplies. The subcontractor included delay impact damages, including lost profit and idle equipment, in its verified statement of claim. Under the statute, this was excessive and the entire amount of the claim—including permissible costs—was forfeited.

The second case in this issue also involves a subcontractor seeking delay damages. A federal appeals court, applying New York law, ruled that a 19-month delay was not uncontemplated and did not constitute abandonment of the subcontract. A no-damage-for-delay clause in the subcontract was enforceable against the sub.

The third case involves the application of a contract’s arbitration clause to a claim against the performance bond on that contract. Although the surety was arguably not a party to the arbitration agreement, it stepped into the shoes of its bonded contractor when it undertook completion work without a takeover agreement.

The inclusion of disputed delay damages in a subcontractor claim under the Colorado Public Works Act ran afoul of the statutory requirement that claims against public projects be limited to amounts due for furnishing labor or materials. Under the statute, the claimant forfeited its entire claim.

A no-damage-for delay clause in a subcontract was enforceable under New York law. A 19-month delay on a large, complex construction project was reasonable and within the contemplation of the parties to the contract.

The incorporation by reference of a subcontract into a performance bond did not necessarily bind the surety to the arbitration clause in the subcontract. The surety, however, stepped into the shoes of its defaulted principal, performing completion work and billing the prime contractor for that work. As such, the surety became obligated to arbitrate with the contractor.

Out-of-sequence work is a serious problem for trade contractors. If work is not performed in a logical sequence, the cost and duration of that work increases. In a recent case, a trade subcontractor was confronted with out-of-sequence work caused by the prime contractor. The sub mishandled the situation, putting itself—instead of the prime—in breach of the subcontract.

The drywall subcontractor discovered the prime had allowed installation of the mechanical equipment prior to the dry walling. Rather than seeking a price increase under the Changes clause of the subcontract, the sub refused to perform, prompting the prime contractor to bring in a replacement drywaller. The defaulting subcontractor paid the prime’s increased costs.

The other case in this issue involves a trade contractor’s warranty of its work. The masonry subcontractor warranted exterior stucco work to the prime contractor and the project owner. The sub found itself defending a breach of warranty claim asserted by a subsequent owner after numerous transfers of the property.

A prime contractor changed the scope of subcontract work when it directed the subcontractor to perform work out of sequence with other trade work. The sub’s contractual remedy was a claim for additional compensation. When the sub submitted no claim and refused to perform the work, the sub breached the subcontract.

In the absence of language to the contrary, a contractor’s express warranty of its work could be assigned by one property owner to another. The contractor could not avoid the warranty obligation simply because the owner was a “contractual stranger.”