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General Contractor’s Intentionally False Certifications Bar It From Any Recovery From Owner

Date: November 3, 2016  /  Author: Masaki James Yamada  /  Categories: Government Contracts, Contracting, Construction News and Notes, Memorable Quotes, Rants and Raves, Employment  /  Keywords: General Contractor’s Intentionally False Certifications Bar It From Any Recovery From Owner 1  /  Comments (0)

In a public works dispute in Massachusetts, a Massachusetts Court judge ruled that a general contractor could not recover any of its over $14 million claim against a public owner because it had violated its contract with the Owner by certifying that it had paid its subcontractors in full and on time when in fact it had not.[i]  The case involves a contract dispute arising from a state and federally-funded project to design and construct a fiber optic network in western Massachusetts.  The Owner was a state development agency established and organized to receive both state and federal funding to build a 1,200–mile fiber optic network known as MassBroadband123 in Western Massachusetts (the Project).  Of that amount, $45.4 million was awarded pursuant to the American Recovery and Reinvestment Act of 2009 (ARRA).  One of the stated goals of ARRA was (as its title suggests) to create jobs in the wake of the 2008 recession and to provide a direct financial boost to those impacted by the economic crisis.  In the context of the instant case, that meant that, if there were to be subcontractors on the job providing labor and materials, they needed to be paid on a timely basis in keeping with the statutory purpose of stimulating the economy.