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?
