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.
