The Court of Appeals ruled that the Trusts' liens against the bond and retainage were improper. The Court of Appeals was bound by the Washington State Supreme Court's decision in I.B. E.W., Local No. 46 v. Trig Electric Construction Company, 142 Wn.2d 431, 13 P.3d 622 (2000), which held that trust funds, such as those in the Leo Finnegan case, that were created under federal law and governed by the Employee Retirement Income Security Act (ERISA), were governed by federal law that preempted the Trusts' right to recover against the payment bond and retention under Washington state law.

The case demonstrates that until the Trig Electric case is overruled by the Washington Supreme Court, lower Washington courts will hold that trust fund liens against the payment bond and retainage are invalid.

While this was certainly the World Series of bid protests, as noted in the previous posting, the process undertaken by Boeing and its team of attorneys is the same required by construction contractors in their protests of most federal procurements.

While the GAO recommendation is not determinative as to who will eventually be awarded the government contract, it provides Boeing another shot to obtain the enormous procurement. 

The GAO issued a full 69 page decision which is currently subject to a protective order because it contains proprietary and source sensitive information.  A copy of the GAO's preliminary statement regarding its decision can be found here.

In most instances the GAO and the Office of the Comptroller General of the United States consider protests to the award of federal government construction contracts.

Bellingham argued that Matia's lawsuit was barred because Matia did not notify the City before it filed its lawsuit as required by a City ordinance and state statute.  Cities can enact ordinances providing for claim filing requirements but they cannot be more restrictive than the authorizing state statute.  The authorizing state statute, RCW 4.96.010, provides that the pre-lawsuit claim filing requirements apply only to tort claims (i.e. personal injury, negligence, etc.).  Therefore, because Matia's claim was for breach of contract, and not tort, it was not required to comply with the pre-lawsuit claim filing requirements of the City and the state statute. 

Although the Division One Court of Appeals' ruling in this case may seem self apparent, the Division Three Court of Appeals reached the opposite result in a case decided in 2004. 

During the course of the project, Beco alleged that J-U-B improperly tested asphalt with the intent of promoting failed tests, unreasonably shut down the project causing delays to Beco, and unreasonably delayed the commencement of the project.  Beco alleged breach of contract, negligence, and intentional interference with contract claims against J-U-B.  Beco's breach of contract claim and negligence claims against Beco were dismissed early in the case, and the only issue on appeal was whether Beco could make a claim for intentional interference against J-U-B.

The Idaho Supreme Court reasoned that Beco could not make a claim against J-U-B for intentional interference.  In Idaho, a party cannot make a claim for intentional interference against another party to the same contract.  The cause of action is only applicable when a third party interferes with one party's contract with another.  In this case, J-U-B was acting as an agent of the City on the project because it was designated as the owner's representative and tasked with administering the general contract.  The Court reasoned that because J-U-B was the City's agent, and the actions that were the basis of Beco's claims occurred during J-U-B's administration of the contract, J-U-B was not a third party to the general contract, and therefore, Beco could not make a claim against J-U-B for intentional interference. 

The case represents the difficult task that general contractors have in making claims against the design professionals on projects.  Because the contractor does not have a contract with the design professional, it cannot allege breach of contract against the design professional.  In this case, Beco's sole remedy was to sue the City for breach of contract due to the actions caused by its agent, J-U-B. 

Court opinion:  Beco Constr. Co. v. J-U-B Engineers, Inc.

The Board held that the contractor was entitled to the consulting costs incurred in preparing the request for equitable adjustment, but because the consultant's work had not been monitored and because the consultant's services were categorized under generalized terms such as "schedule analysis," "developing issue files," "summarized findings/developed schedule REA" and "finalized REA," the Board determined it was not possible to discern the level of detail of work that was actually being performed by any given person on a given day and therefore, reduced the contractor's costs.

Government contractors, when faced with whether to present a request for equitable adjustment or file a certified claim, should weigh the recovery of claim preparation costs, but non‑recovery of interest in a request for equitable adjustment presentation vs. making a claim pursuant to which interest is recoverable under the CDA, but claim preparation costs are not.  To prevail, however, on the request for equitable adjustment, the contractor's burden is to show that the "genuine purpose" in incurring the attorneys' fees and costs was to further the negotiation process rather than to simply disguise a claim.  Find the case here