Construction Law Blog
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Contractors and potential contractors with the U.S. Department of Transportation (“DOT”) should be aware of another round of fraudulent letters purporting to be issued by DOT.[i] The letter is typically signed by someone claiming to be a “Senior Procurement Officer” and appears on official letterhead. The scam requests financial information be faxed to them and includes a form entitled, “Authorization to Release Financial Information.”
The Civilian Board of Contract Appeals Rules That Differing Site Condition Clause Trumps Disclaimer Provision
In this case, the Department of Interior's Bureau of Land Management ("BLM") contracted with Drennon Construction & Consulting, Inc. ("Drennon") to widen a road to the Tangle Lakes Campground located in central Alaska.[i] The project required the contractor to excavate a hillside and build a gabion (retaining) wall along it. As Drennon excavated the roadway, the hillside slopes collapsed (the soils were "at or near [their] angle of repose, so every scoopful that is excavated from the slope causes a landslide of materials from above").[ii] Both the government and the contractor agreed that the work should cease until a solution to the sloughing problem could be devised. Ultimately, the project was scaled back, the wall was not built, and the road was not widened.
Washington Court Holds that Contract with Five Subsequent Amendments Dates Back to First Commencement of Services
Recently, Division II of the Court of Appeals held that the priority of a lien for unpaid engineering services pertaining to a Contract with five subsequent Amendments dates back to the first commencement of services. This dispute involves the priority of a mechanic's lien filed by an engineering firm, Gibbs & Olson, Inc. ("G&O"), and the Deed of Trust of a lender, First-Citizens' Bank & Trust Company ("First-Citizens"). Winlock planned to turn its 50-acre pasture into a 200-lot subdivision. In February 2005, Winlock received a proposal from G&O for engineering and survey services.
A recent Connecticut Court of Appeals case is a warning to all subcontractors to review their contract provisions carefully. In Suntech of Connecticut, Inc. v. Lawrence Brunoli,[i] a subcontractor (Suntech) contracted to build a large curtain wall that was a substantial feature in an airport terminal. The structural and architectural plans did not match, and all the parties failed to notice the discrepancy during the bidding phase or prior to signing the agreement.
Two recent fines against public agencies illustrate the consequences to government agencies for failing to comply with records requests under Washington's Public Records Act.
Contractors who complete federal public projects are given Past Performance Evaluations ("PPE") by the public entity, as outlined by Federal Acquisition Regulation ("FAR") 42.15. Currently, after a PPE is sent to the contractor, the contractor has 30 days to comment on the evaluation before it is published in the Past Performance Information Retrieval System ("PPIRS"). Once the PPE is published in the PPIRS it becomes available for all other agencies to view. A new rule has been proposed (78 FAR 48123) that would require the evaluations to be included in the PPIRS database not later than 14 days after the delivery of the information to the contractor. This means the contractor would be limited to 14 days to respond to an evaluation before it is published for all agencies to obtain access, regardless of whether or not the contractor has been able to actually respond to or rebut a particular criticism.
Under Washington's Public Works Statutes (RCW 39.08 and 60.28), general contractors who perform public works are legally required to post payment bonds and have retainage withheld. The purpose of these laws is to protect the public entity (owner) from subcontractor and supplier claims against the public project, while preserving the interests of mechanic's lien rights (subcontractors and suppliers are provided bond claim and retainage rights, but have no lien rights in the public property).
The General Contractor/Construction Manager ("GCCM") method, sometimes referred to as Construction Manager/General Contractor ("CMGC"), is an alternative approach to the customary prime contractor procurement process. In the traditional approach, owners aim to have a complete project design finished when general contractors begin bidding. Under the GCCM approach, however, owners hire a contractor during the early design stages. This contractor takes on the role of construction manager during design development, project planning, and budget creation. When the project is almost ready to begin construction, the owner and contractor negotiate a "guaranteed maximum price" for construction services, and the construction manager becomes the general contractor. Unlike the competitive bidding procedure used in traditional contracting, owners using the GCCM method often make their selection on the basis of qualifications, such as experience or personnel, rather than price.
This blog post was prompted by recent e-mail exchange that took place on the Washington Bar Association Construction Law listserv. The initial question was whether parties can, by contract, extend the 90-day statutory lien recording dead deadline. This blog post summarizes the authorities and opinions cited in that debate. The bottom line was that the majority of opinions of lawyers participating in the exchange concluded that extending the 90-day lien recording deadline is not advisable because the statutes do not address the question and it has not been decided by the Washington's Supreme Court.
Washington Supreme Court Holds that Arbitration Clauses in Labor Agreement were Unconscionable and Unenforceable, Invalidating the Entire Arbitration Provision
Recently, the Washington Supreme Court invalidated an arbitration provisition that included arbitrations clauses in a labor agreement providing for a 14-day statute of limitations period, a two- and four-month limitations on back-pay, and a requirement that employees pay for half of the cost of arbitration.