This article was originally published in Government Construction (Volume 5, Issue 2 – Summer 2020), an ABA Division 13 Quarterly Newsletter. It is republished here with permission.

The United States Civilian Board of Contract Appeals (the “Board”) recently issued a decision that may be particularly pertinent in light of the COVID-19 pandemic. In Pernix Serka

COVID-19 has created a severe disruption to the construction industry. Certain jurisdictions, including Boston, San Francisco and Pennsylvania, have placed restrictions on construction projects deemed “nonessential” and require waivers for certain projects to continue. Owners, contractors, suppliers and others may currently have more questions than answers. This article addresses some important concerns, and provides links to additional resources that more specifically address these concerns.
Continue Reading COVID-19 and the Construction Industry: Important Considerations

Aquatic Renovations Sys. v. Vill. of Walbridge, 2018 Ohio App. Lexis 1581 (April 13, 2018)

This post was published on July 7, 2018 in The Pennsylvania Record.

On May 2, 2012, Aquatic Renovations Systems, Inc. (“Aquatic”) entered into a contract with the Village of Walbridge (“the Village”) for the installation of a new pool liner (“Contract 1”).  Prior thereto, the Village council adopted an ordinance which authorized the mayor to enter into Contract 1 (“Ordinance”).  On April 12, 2013, the mayor signed a new contract for the balance of the work (“Contract 2”).  A few days after Aquatic completed its work, the pool liner began to lift.  The Village then refused to pay Aquatic for the completed and approved work.

Aquatic sued the Village for non-payment, alleging the Village breached Contract 2.  Aquatic also alleged that the Village was liable under a theory of quantum meruit and unjust enrichment.  The trial court granted the Village’s motion for summary judgment, holding that Contract 2 was not valid because it did not comply with the Ohio Revised Statute which required the mayor, the clerk, and the Village administrator to authorize all Village Contracts.  Thus, because Contract 2 was unenforceable, Aquatic could not recover under a breach of contract, quantum meruit or unjust enrichment theory.


Continue Reading Void Means Void – Municipal Contract That Did Not Conform to Statute Is Void and No Claim for Breach or Quasi-Contract or Unjust Enrichment Is Permitted

Balfour Beatty Infrastructure, Inc. v. Mayor and City Council of Baltimore, 2017 U.S. App. Lexis 7252 (4th Cir., April 25, 2017)

The United States Court of Appeals for the Fourth Circuit recently addressed whether the City of Baltimore (the “City”) had abandoned a contractually required administrative dispute resolution process and relieved Balfour Beatty Infrastructure, Inc. (the “Contractor”) of any obligation to use the administrative dispute resolution process before seeking judicial review of the Contractor’s claims.

The City and the Contractor entered into two contracts (the “Contracts”) whereby the Contractor agreed to build certain parts of a wastewater treatment plant servicing the Chesapeake Bay. The Contracts stipulated that time was of the essence and permitted the City to assess liquidated damages if the Contractor failed to meet the specified completion date.  The Contracts also incorporated by reference the administrative dispute resolution process set forth in the City’s “Department of Public Works Specifications – Materials, Highways, Bridges, Utilities and Incidental Structures 2006,” known as the “Green Book,” which requires contractors engaged by the City in connection with public works projects to seek administrative review by the City’s Department of Public Works of any dispute related to their contracts before suing in court.


Continue Reading Fourth Circuit Affirms Dismissal of Contractor’s Complaint, Declining to Create ‘Ultra Vires’ or ‘Bias’ Exceptions to the Requirement That Contractors Exhaust Their Administrative Remedies Under Maryland Law Before Suing a Government Agency

United States ex rel. J.A. Manning Constr. Co. v. Bronze Oak, 2017 U.S. Dist. LEXIS 6054 (N.D. Okla. Jan. 17, 2017)

 In May 2014 the Cherokee Nation issued a bid notice for bridge and roadway construction in Mayes County, Oklahoma (the “Project”). Funding was authorized pursuant to the Secretary of Transportation and Secretary of the Interior’s Tribal Transportation Program, 23 U.S.C. § 202, by which federal funding is offered to Native American tribal governments to pay the costs of certain transportation projects located on, or providing access to, tribal lands.

Bronze Oak, LLC submitted a bid proposal and was hired as the general contractor for Project, and J.A. Manning Construction Company (“JAMCC”) was hired as a subcontractor to supply labor and materials to the Project. Bronze Oak’s bid proposal provided that any resulting contract would be construed under U.S. and Cherokee Nation laws.  A payment bond was issued for the Project naming Bronze Oak as the principal, Mid-Continental Casualty Company as surety, and the United States as obligee.  The payment bond also stated it was for the protection of persons supplying labor and materials pursuant to the Miller Act.


Continue Reading Federal Court in Oklahoma Rules that Bond Issued on a Sovereign Tribal Construction Project is Not a Miller Act Bond Even Though it Stated it was Issued Pursuant to the Act and Named The United States As Obligee

Montano Elec. Contractor v. United States, 2015 U.S. App. LEXIS 5928 (Fed. Cir. Apr. 13, 2015)

The Army Corps of Engineers (“the Corps”) hired a general contractor, who subcontracted certain electrical work to Montano (“Subcontractor”).  When Subcontractor was not paid for its work, Subcontractor sought assistance from the Corps’ contracting officer, who explained that he was unable to assist because Subcontractor did not have a contract with the government and the government was thus not a party to Subcontractor’s dispute; however, Subcontractor should pursue any claims it had against the general contractor in federal district court under the Miller Act.


Continue Reading Federal Circuit Court Affirms that Federal Claims Court Lacks Jurisdiction Over Claims By Subcontractor

Clipper Pipe & Service, Inc. v. The Ohio Cas. Ins. Co., 2015 Pa. LEXIS 1275 (PA  June 15, 2015)

The Supreme Court of Pennsylvania held that CASPA, 73 P.S. §§501-516, “does not apply to a construction project where the owner is a governmental entity.”  The decision once and for all resolved the issue of whether the Contractor and Subcontractor Payment Act (“CASPA”) applies to payment disputes between prime contractors and subcontractors on public works projects,  either instead of, or in addition to, the prompt payment provisions of the Commonwealth Procurement Code, 62 Pa.C.S. §§ 3931-3939 (commonly referred to as “the Prompt Payment Act”).


Continue Reading Supreme Court of Pennsylvania Holds Contractor and Subcontractor Payment Act (“CASPA”) Inapplicable to Public Works Projects

Total Eng’g, Inc. v. United States, 2015 U.S. Claims LEXIS 30 (Fed. Cl. Jan. 26, 2015) 

The United States Army Corps of Engineers (the “Government”) awarded a contract to Total Engineering, Inc. (“Total”) for preliminary site construction work for the United States Army Medical Research Institute of Chemical Defense Replacement Facility.  When failures occurred in a steam line system that Total had installed, the contracting officer issued a cure notice and ultimately terminated Total for default.
Total’s contract required it to construct a steam line system, consisting of steam and condensate lines anchored to parallel concrete piers inside a concrete trench.  During a hydrostatic pressure test, the Government noted cracks in the piers, pipe detachment from several concrete piers, and damage to an anchor support.  The parties disputed the cause of the failures.  Total contended that the Government’s faulty design caused the failures, and the Government alleged that deficiencies in Total’s work were to blame.


Continue Reading Court of Federal Claims Holds that Contractor’s Defense of Defective Specifications Is Not an Independent Claim Requiring Submission Under Contract Disputes Act

Philadelphia Auth. for Indus. Dev. v. United States, 114 Fed. Cl. 519 (2014)

In this action, the United States Court of Federal Claims denied the Government’s motions to dismiss and for summary judgment, holding that plaintiff had sufficiently pled and supported claims against the Government based upon misrepresentations and omissions in data supplied by the Government in a negotiated procurement.  The Court held that negligent estimate, superior knowledge, misrepresentation and mutual mistake were viable theories upon which to pursue such a claim.  It rejected the Government’s position that a claim for negligent estimate could not be maintained in the context of a negotiated procurement, and also held that the plaintiff’s expectation of a limited loss did not negate the element of reliance with respect to much larger losses attributable to undisclosed or misrepresented information.


Continue Reading Court of Federal Claims Determines That Government Contractor May Recover for Losses Attributable to Omissions and Inaccuracies in Data Provided By Government in Negotiated Procurement

Metcalf Constr. Co. v. United States
742 F.3d 984 (Fed. Cir. 2014)

This action arose out of the design and construction of military housing units at a U.S. Navy facility in Hawaii.  Pre-bid documents for the project supplied by the government provided test information regarding soil conditions on the site.  The government also included a disclaimer that this information was “for preliminary information only” and the resulting contract required that the contractor conduct its own independent soil investigation.

Metcalf Construction Company (the “Contractor”) was awarded the contract.  When the Contractor conducted its independent soil investigation it discovered that the soil was not as represented.  The Contractor notified the government and discussions ensued.  In those discussions, the Contractor recommended a different design and construction approach to account for the newly uncovered conditions, while the government generally insisted on following construction requirements set out in the original contract.  After a year’s delay, the Contractor decided that the cost of waiting for the government to approve the design changes had become too high, and it began to implement those changes without a contract modification.  As a result, the Contractor spent approximately $26 million over the original contract amount to remedy the soil conditions and finish the project.


Continue Reading Federal Circuit Court Clarifies Standard for Establishing Government’s Breach of the Implied Duty of Good Faith and Fair Dealing in Addressing Claim for Differing Site Conditions