Bell BCI Company v. United States
81 Fed. Cl. 617; 2008 U.S. Claims LEXIS 116, (April 21, 2008)
Note: This case was affirmed in part, vacated in part, and remanded in Bell BCI Co. v. United States, 570 F.3d 1337 (Fed. Cir. 2009), to be discussed in a a future issue of Constructlaw.
Plaintiff, Bell BCI Company (Bell), a general contractor, sued the Government for $6,200,672 in damages plus interest under the Contract Disputes Act for unpaid balance of the price, unresolved changes, delay damages, labor inefficiency costs and profit thereon. Bell also asserted claims on behalf of five subcontractors.

Trocon Construction Corp. v. City of New York
2008 N.Y. App. Div. LEXIS 4316 (May 20, 2008)
The Appellate Division of the Supreme Court of New York held that an early completion bonus in a construction contract was not barred by a “no damages for delay” clause as it was a bid item of the contract.
The case arose out of a contract between a contractor and the City of New York for the reconstruction of part of Sixth Avenue in Manhattan. The contractor agreed to perform soil borings to locate and determine the size of underground voids believed to be contributing to sidewalk and pavement subsidence and to appropriately remedy the voids. Because the City of New York contemplated that the work on the project would interfere with vehicular and pedestrian traffic, the contract provided for various payment incentives for early completion, including an early completion bonus if work on both sides of the avenue was completed within 30 days. Delays arose principally due to a dispute over the boring operations when unexpected boulders were encountered. The contractor contended that it was not required by the contract specifications to perform borings through boulders, which should be completed using a different boring operation; the City maintained that such borings were included and should be performed using the same operation as provided for in the contract. The dispute was resolved by the Contract Dispute Resolution Board, which found that the contractor was entitled to compensation for the extra work performed. The Board claimed lack of jurisdiction to resolve the contractor’s claim for the incentive bonus for early completion of the work on the west side of the avenue.

Construction Co, Inc. v. United States
2008 U.S. Claims LEXIS 137 (May 21, 2008)
The United States Court of Federal Claims discussed the measurement of equitable adjustment for standby equipment costs in a case involving the United States Department of the Navy.
Metric Construction Co. entered into two contracts with the Navy to perform construction work on the small island of San Nicolas off the coast of California. Under the first contract, Metric agreed to make improvements and repairs to the Navy’s airfield runway on the island. The second contract called for repairs to certain of the islands roadways and storm drainage systems. Certain conditions on the island created logistical challenges for Metric in performing the work. These included limited landing areas for barges carrying equipment, bad weather, and the existence of a salt water spray over the site.

Sloan Constr. Co. v. Southco Grassing, Inc.
2008 S.C. LEXIS 99 (S.C. Mar. 24, 2008)
The South Carolina Department of Transportation (SCDOT) contracted with general contractor Southco Grassing, Inc. in connection with state highway maintenance project and, in accordance with the applicable statutory bond requirements, Southco provided a payment bond for the benefit of its subcontractors and suppliers in the full contract amount. Subsequently, Southco entered into a subcontract with subcontractor Sloan to perform asphalt paving work. In June 2001, before the paving work was completed, Southco’s payment bond was cancelled when the bond’s issuer became insolvent. Notice of the insolvency and cancellation was provided to SCDOT and SCDOT requested in writing that the Southco provide a replacement bond within seven days. Southco did not reply. In the meantime, Sloan completed its work, but in January 2002 notified SCDOT that it still had not received payment from Southco for its subcontract valued at approximately $52,000 and that the payment bond had never been replaced. In March 2003, despite that it had not made full payment to Sloan, Southco advised SCDOT that it had made all payments on the project, and SCDOT released final retainage to Southco.

Atlantic City Associates LLC v. Carter & Burgess Consultants, Inc.
2008 U.S. Dist. LEXIS 25144 (D.N.J. Mar. 27, 2008)
The United States District Court for the District of New Jersey recently had to decide whether it was proper for a general contractor to set off potential claims on a private project against amounts owed to the same subcontractor on a public project. Relying upon the New Jersey Public Works Bond Act and New Jersey Trust Fund Act, the District Court concluded that it was improper for the general contractor to set off the amounts because a contractual setoff provision was insufficient to rise to the level of a waiver of the subcontractor’s rights under the Acts.

Current Builders of Florida, Inc. v. First Sealord Surety, Inc.
2008 Fla. App. LEXIS 4698 (April 2, 2008)
The Court of Appeals of Florida held that a jury finding that a contractor which terminated a subcontractor failed to provide notice in accordance with the terms of a performance bond was sustainable, given that the contractor did not tender the remaining contract balance to the surety or give it an opportunity to provide for the completion of the work. Accordingly, the surety’s obligations under the bond were not triggered.

Cleveland Construction, Inc. v. Ohio Pubic Employees Retirement System No. 07AP-574, 2008 Ohio 1630
Appellant, Ohio Public Employees Retirement System (“PERS”) is the owner of an office tower project (the “Project”) in Columbus, Ohio. PERS entered into a $6.3 million interior trades contract with Appellee, Cleveland Construction, Inc. (“CCI”) to build portions of the $90 million office tower. The jury in the lower court case found that PERS materially breached its contract with CCI by failing to properly schedule and coordinate the project work.

Hunt Construction Group, Inc. v. National Wrecking Corp.
2008 U.S. LEXIS 27859 (D.D.C. Apr. 8, 2008)
The United States District Court for the District of Columbia discussed the split of authority on the issue of when a surety’s obligations are triggered under a performance bond, ultimately holding that a surety is liable only if timely notice is given of the obligee’s default, allowing the surety to exercise its options under the performance bond.
Hunt Construction Group (“Hunt”) was the prime contractor on a hotel construction project in Washington, D.C. National Wrecking Corporation (“NWC”) subcontracted with Hunt to perform excavation and other work on the hotel project. In April 2004, approximately five months after entering into the subcontract, NWC completed the work. Hunt alleged that NWC delayed in completing the excavation work, and as a result, Hunt was required to accelerate other parts of the work, so that it incurred costs in excess of $800,000 due to NWC’s delay.

Donald M. Durkin Contracting, Inc. v. City of Newark
2008 U.S. App. LEXIS 28987 (D. Del. Apr. 9, 2008)
The Delaware District Court held that a contractor who is improperly terminated is entitled to recover its expectation interest or the unpaid contract price less the amount it would have cost the contractor to complete the job. Other damages which are causally connected to the owner’s breach are recoverable as well, but costs of pre-termination performance or post-termination losses which are not causally connected are not recoverable. Further, the Court affirmed that Delaware follows the “American Rule’ which precludes recovery for attorneys fees incurred in consequence of the owner’s breach.

Regent Ins. Co. v. Storm King Contr., Inc.
2008 U.S. Dist. LEXIS 16513 (S.D.N.Y. Feb. 26, 2008)
In June 1999, the owner of The Emerson Inn hired Storm King to act as its general contractor in the remodeling and rebuilding of the Inn. Under their agreement, Storm King was not responsible for the design of the project or for compliance with applicable law, building codes, or regulations, and it was agreed that the remedy for any defective work would be limited to correction of the defects. Storm King entered into a subcontract with Sullivan Fire Protection for the installation of a fire sprinkler system. The subcontract incorporated the terms of the agreement between the owner and Storm King. Its scope of work section provided that Sullivan’s work was to be performed in accordance with the plans and specifications prepared by the design professional.