Pa. Associated Builders and Contractors, Inc. v. Dep’t of Gen. Servs
2007 Pa. LEXIS 2175 (Oct. 17, 2007)
On October 17, 2007 the Pennsylvania Supreme Court ruled that a lower court decision misinterpreted the state’s Procurement Code and that the Commonwealth Department of General Services (DGS) should be allowed to use a sealed proposal process to procure construction contracts.
In April, 2005, DGS initiated the use of the request for proposal (RFP) process to award construction contracts on larger projects (exceeding $5 million). In October 2005, Associated Builders and Contractors (ABC), a trade association of contractors and subcontractors, filed suit in the Commonwealth Court to enjoin DGS from using the RFP process for construction contracts, asserting that by statute construction work could only be awarded by competitive bidding requiring an award to the lowest competitive bidder. The Commonwealth Court held that the Procurement Code does not extend the RFP process to construction contracts, and, accordingly, enjoined DGS from utilizing the competitive sealed proposal bidding/RFP process on any future construction project under its policy determination. DGS appealed the Commonwealth Court’s decision.

Central Ceilings, Inc. v. Nat’l Amusements, Inc.,
70 Mass. App. Ct. 172, 873 N.E.3d 754 (Sept. 18, 2007)
National Amusements, Inc., entered into a contract with Old Colony Construction Corporation for the construction of National’s cinema theater complex. Old Colony subsequently entered into a subcontract with the plaintiff, Central Ceilings, Inc., for a portion of the construction of the Project. Although delays made meeting the original completion date next to impossible, National stressed to Central its strong desire to have the theatre complex open for the Labor Day weekend. In response, Central made it clear to National that meeting such an aggressive completion date would require it to accelerate the work schedule. In addition, since Old Colony was experiencing cash flow problems and owed Central a substantial sum of money for work already completed, Central demanded assurances from National that it would be paid for its work before it would continue with the accelerated work on the Project. As a result, one of National’s agents orally agreed to pay Old Colony’s obligations to Central. Thereafter, Central completed its work and achieved substantial completion by August 25.

PSEG Power New York, Inc. v. Alberici Constructors, Inc.
2007 U.S. Dist. LEXIS 66767 (N.D. NY. September 7, 2007)
During the course of litigation arising out of a contract for the construction of a combined-cycle power plant between the principal contractor Alberici and PSEG, an e-discovery dispute arose around the production of email. In response to Alberici’s request for documents including email and any email attachments, PSEG produced over 211,000 pages and a disc containing email, but not the email attachments. Later it was discovered that during the process in which PSEG’s vendor downloaded the emails for production, the tie between the email and its corresponding attachments was broken, making it very difficult to determine which attachment belonged to which email. However, the raw data remained intact. Around the same time, and before the close of discovery, PSEG moved for summary judgment. The District Judge struck the motion sua sponte, stating that the motion was to be renewed after discovery had been completed and the parties had consulted with the magistrate judge.

ACE Constructors, Inc. v. U.S.
2007 U.S. App. Lexis 22309 (Fed. Cir. September 19, 2007)
The US Court of Appeals for the Federal Circuit upheld a contractor’s claim for additional compensation due to differing site conditions.
ACE Constructors, Inc. (“Contractor”) entered into a contract with the United States Army Corps of Engineers (“Government”) to build a structure designated as the Ammo Hot-Load Facility, at Biggs Army Airfield at Fort Bliss in El Paso, Texas. The project included construction of a loading area for cargo planes, various roadways, buildings, a storage pad, a loading apron, and a taxiway for airplanes. The site contained hills and other terrain that needed to be excavated, leveled, and filled. The bid solicitation materials included architectural drawings and engineering specifications prepared for the government by the engineering firm of Crawford, Murphy & Tilly, Inc., which plans were incorporated into the contract.

BEGL Construction Company, Inc. et al. v. Los Angeles Unified School District and Star Insurance Com
154 Cal.App.4th 970; 2007 Cal.App. LEXIS 1432 (2007)
In August 2000, the Los Angeles Unified School District (the “District”) entered into a public works construction contract with BEGL Construction Company, Inc. (“BEGL”) for a seismic retrofit of the Science Building at its Los Angles Center for Enriched Studies (“LACES”) and demolition and reconstruction of the LACES West Arcade. Because the project was a public work, BEGL was required to post a performance bond and a payment bond. Subsequently, after BEGL commenced performing work, the West Arcade was removed from the scope of the contract.

South Texas Electric Cooperative v. Dresser-Rand Company
2007 U.S. Dist. Lexis 66345 (S.D. Tex. Sept. 7, 2007)
Plaintiff, South Texas Electric Cooperative (“STEC”) contracted with Defendant, Dresser-Rand Company (“Dresser”) for the design and construction of a steam turbine unit. As part of the contract, Dresser was required to provide equipment, materials and field services free from defects in material and workmanship. Moreover, the equipment had to meet certain performance specifications.

Federated Dep’t Stores, Inc. v. M.J. Clark, Inc.
2007 U.S. Dist. LEXIS 51826 (N.D. Ill. July 17, 2007)
After a flood caused by a leak in the sprinkler system during remodeling at a Bloomingdale’s store in Chicago damaged the first five floors of the store, plaintiffs, Bloomingdale’s and its owner Federated, sued defendant contractor, subcontractor, and building manager for breach of contract, negligence, and indemnification.
The agreement between the contractor and owner provided the contractor agreed to indemnify the owner. It further provided that each party waived all rights against the other for any loss or damage “for which property insurance is carried or required to be carried pursuant to [the parties’] Agreement.” Specifically excepted from the waiver were the contractor’s indemnification responsibilities. During the time of the flood, the owner was covered by an “all risk” insurance policy. Among other things, the policy excluded ordinary wear and tear and errors in design or faulty workmanship.

Donald C. Winter v. CATH-DR/BALTI JOINT VENTURE
2007 U.S. App. Lexis 19565 (Fed. Cir., August 17, 2007)
The United States Court of Appeals for the Federal Circuit (“CAFC”) affirmed in part, reversed in part, and vacated and remanded in part the United States Armed Services Board of Contract Appeals (“ASBCA”) decision that CATH-dr/Balti Joint Venture (“CATH-Balti”) was entitled to an equitable adjust for contract modifications, issued by the Resident Officer in Charge of Contracts (“ROICC”), that called for work not covered under its contract with the United States Navy (“Navy”). The primary basis for reversal was the unambiguous language of the Federal Acquisition Regulation (“FAR”), e.g., 48 C.F.R. § 1.601(a) and 48 C.F.R. § 43.102, Defense Federal Acquisition Regulation Supplement (“DFARS”), 48 C.F.R. § 201.602-2, and FAR Clause 48 C.F.R. § 52.243-4 (Changes Clause), DFARS Clause 48 C.F.R. § 52. 201-7000 (Contracting Officer’s Representative), and Naval Facilities Engineering Command (“NAVFAC”), 5252.201-9300 (Contracting Officer Authority) and 5252.242-9300 (Government Representatives), which were incorporated into the contract and clearly indicated that the ROICC did not have the authority to change the scope of work or authorize compensable changes.

Dur v. Western Branch Diesel, Inc.
2007 U.S. App. LEXIS 16237 (4th Cir. July 9, 2007)
Following the precedent of the Supreme Court of Virginia in Sensenbreunner v. Rust. Orling & Neale, Architects, Inc., 374 S.E.2d 55 (Va. 1988), the Fourth Circuit Court of Appeals upheld the district court’s grant of a motion for summary judgment. The Court held that damage to an owner’s boat caused by an electrical fire fell within the scope of the contract between the owner’s general contractor and the subcontractor and amounted to nothing more than economic loss, which barred the owner from maintaining a cause of action for negligence against the subcontractor.

Mellon v. Shriners Hospitals for Children
2007 Mass. Super. LEXIS 188 (Mass. Super. Ct. June 26, 2007)
The Superior Court of Massachusetts recently considered whether an architect of record on a construction project owed a duty to a third party construction worker on the project for injuries sustained as a result of improper installation of grates. To resolve this issue, the Court found that the whether a duty was owed rested on the language of the architectural services agreement at issue and the level of control the Architect exerted on the job site.