Five Issues to Consider in Government Contracting (Or Any Contracting!)
September 02, 2024 —
David Adelstein - Florida Construction Legal UpdatesThe appeal of Appeals of – Konecranes Nuclear Equipment & Services, LLC, ASBCA 62797, 2024 WL 2698011 (May 7, 2024) raises interesting, but important, issues that should be considered. In this case, the government (in a supply contract) procured four portal cranes from the claimant. After an initial test of one of the cranes failed, the government refused to accept delivery even after the issue was addressed by the claimant. The government did not accept the manner in which the claimant addressed the issue and would only accept cranes if the claimant employed “an unnecessary alternative solution [that] caused further delay and increased [claimant’s] costs.” On appeal, it was determined the government’s decision to delay delivery based on its demand for the alternative solution was not justified, i.e., constituted a breach of contract. Below are five issues of consideration in government contracting, or, for that matter, any contracting.
Issue #1- Patently Ambiguous Specifications
The government argued that the specifications were patently ambiguous and because the claimant failed to inquire regarding the ambiguous specifications prior to performance, its interpretation of the ambiguous specifications should govern. The contractor countered that the specifications were unambiguous and it met the specifications.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Forum Selection Provisions Are Not to Be Overlooked…Even On Federal Projects
September 16, 2024 —
David Adelstein - Florida Construction Legal UpdatesForum selection provisions are NOT to be overlooked. Ever. Treat them seriously. Even on federal projects where there is a Miller Act payment bond. Consider forum selection provisions on the front end when negotiating your contract.
In a recent opinion, U.S. f/u/b/o Timberline Construction Group, LLC vs. Aptim Federal Services, LLC, 2024 WL 3597164 (M.D.Fla. 2024), a joint venture prime contractor was hired by the federal government to build a temporary housing site. The joint venture prime contractor obtained a Miller Act payment bond. The joint venture then entered into a subcontract with one of its joint venture members and the member-subcontractor then engaged a sub-subcontractor. The sub-subcontractor claimed it was owed $3.5 Million and sued the member-subcontractor, as well as the prime contractor’s Miller Act payment bond, in the Middle District of Florida. The member-subcontractor and the Miller Act payment bond sureties moved to transfer venue to the Middle District of Louisiana pursuant to a forum selection clause in the contract between the sub-subcontractor and the member-subcontractor. The contract provided that the exclusive venue would be a United States District Court located in Louisiana.
Forum selection provisions are analyzed in federal court under 28 U.S.C. 1404(a): “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” U.S. f/u/b/o Timberline, supra at *2. A forum selection provision is presumptively valid and given controlling weight. Id. (quotations and citations omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Architects Group Lowers U.S. Construction Forecast
July 30, 2014 —
Nadja Brandt – BloombergSpending on non-residential construction in the U.S. will be less than initially projected as state and local governments scale back investments in such properties as schools and health-care buildings, the American Institute of Architects said.
Total spending on commercial and institutional development probably will increase 4.9 percent this year, down from an earlier estimate of 5.8 percent, according to a semi-annual survey by the Washington-based group.
A slowdown in funding for institutional projects, which include education, health-care, religious and public-safety facilities, has been a drag on the recovery of the wider industry, according to Kermit Baker, the AIA’s chief economist. The group expects institutional-construction spending to fall 0.1 percent this year, compared with January’s projection for an increase of 3.4 percent, Baker said.
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Nadja Brandt, BloombergMs. Brandt may be contacted at
nbrandt@bloomberg.net
Hawaii Appellate Court Finds Duty to Defend Group Builders Case
May 10, 2013 —
Tred EyerlyOn May 19, 2010, the Hawaii Intermediate Court of Appeals determined construction defect claims did not constitute an occurrence under a CGL policy.Group Builders, Inc. v. Admiral Ins. Co., 123 Haw. 142, 231 P.3d 67 (Haw. Ct. App. 2010) ("Group Builders I"). The appeal in Group Builders I, however, only addressed the duty to indemnify. The ICA has now issued a second decision (unpublished), holding that there is was duty to defend Group Builders on the construction defect claims under Hawaii law, based upon the policy language and the allegations in the underlying complaint. Group Builders, Inc. v. Admiral Ins. Co., 2013 Haw.App. LEXIS 207 (Haw. Ct. App. April 15, 2013).
The underlying suit involved allegations by Hilton Hotels Corp. that Group Builders, a subcontractor working on an addition to the hotel, was responsible for mold found after completion of the project. Hilton alleged that the "design, construction, installation, and/or selection of the . . . building exterior wall finish . . . did not provide an adequate air and/or moisture barriers." The counts alleged against Group Builders included breach of contract and negligence.
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Tred EyerlyMr. Eyerly can be contacted at
te@hawaiilawyer.com
Wisconsin Court of Appeals Re-affirms American Girl To Find Coverage for Damage Caused by Subcontractors
September 20, 2021 —
Tred R. Eyerly - Insurance Law HawaiiThe trial court's finding of no occurrence and no property damage due to faulty workmanship was reversed by the appellate court. No. 5 Walworth v. Engerman Contracting, Inc., 2021 Wis. App. LEXIS 401 (Wis. Ct. App, July 30, 2021).
Engerman was the general contractor on a construction project at a residence. Engerman was hired to build a poll complex. Engerman subcontracted the project to Downes Swimming Pool Co., Inc. Downes purchased shotcrete (sprayed concrete) from Otto Jacobs Company LLC for the swimming poll walls and base.
After completion, the pool immediately began leaking. An investigation determined that the shotcrete material was not installed correctly, contributing to cracking in the pool walls and the steel reinforcing bars were not sufficient to prevent cracks in the pool walls. The owner demolished the pool and constructed a new one. Thereafter, the owner sued Engerman, its insurers (General Casualty Company of Wisconsin and West Bend Mutual Insurance Company) and Downes and its insurer. Downes filed a third-party complaint against Jacobs and its insurer (Acuity Mutual Insurance Company) alleging Jacobs negligently provided inferior shotcrete to Downes.
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Tred R. Eyerly, Damon Key Leong Kupchak HastertMr. Eyerly may be contacted at
te@hawaiilawyer.com
County Sovereign Immunity Invokes Change-Order Ordinance
December 20, 2017 —
Lizbeth Dison - AHC Contruction Law BlogThe recent case of Fulton County v. Soco Contracting Company, Inc. addresses two very interesting questions for local government attorneys. First, can a county ordinance bolster a defense of sovereign immunity against a contractor’s claims? Second, can a county waive sovereign immunity by failing to respond to Requests for Admission?
Facts:
County hired Contractor to construct a facility near the airport. The contract provided that change orders must satisfy a county ordinance, which required approval by the Board of Commissioners. But in emergency situations, the County Manager could approve change orders, as long as the contractor executes a proposed modification and the purchasing agent approves it.
The project suffered substantial delays, which Contractor attributed to weather, design delays, delays by the County in providing decisions on changes, and delays in obtaining permits during the federal government’s shutdown. As a result of these issues, Contractor comes County changed the scope of the contract. Contractor asserted claims against County for the delays and the changes to the work. The appellate opinion addresses the change order claims.
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Lizbeth Dison, Autry Hall & Cook, LLP
What is Toxic Mold Litigation?
April 11, 2018 —
Vik Nagpal – Bremer Whyte BlogTo understand what
Toxic Mold Litigation is, it is important to first identify and understand what toxic mold is. Mold is a fungus which is essentially everywhere, and certain types of mold, known as toxic mold, may cause severe personal injuries and/or property damage. Toxic mold refers to those molds capable of producing mycotoxins which are organic compounds capable of initiating a toxic response in vertebrates. Toxic mold generally occurs because of water intrusion, from sources such as plumbing problems, floods, or roof leaks.
It is this ageless life form that has spawned a new species of toxic tort claims and has had legal and medical experts debating the complex health implications that follow. Here is some information as to what toxic mold litigation is and when you should hire a lawyer for toxic mold.
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Vik Nagpal Mr. Nagpal may be contacted at
vnagpal@bremerwhyte.com
What are Section 8(f) Agreements?
July 02, 2018 —
Wally Zimolong – Supplemental Conditions Like many areas of federal labor law, there are different rules for construction industry employers. One major difference is in how employers become unionized. Typically, under Section 9(a) of the National Labor Relations Act, a union becomes a collective bargaining agent of employees only after a majority of employees show support for union representation. In other words, the employees chose whether to be represented by a particular union. However, under Section 8(f) of the NLRA, construction industry employers can choose to become union without any showing of majority support by employees. In fact, construction industry employers don’t need to have any employees at all to sign a “8(f) agreement.” Thus, these agreements have become known as pre-hire agreements.
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Wally Zimolong, Zimolong LLCMr. Zimolong may be contacted at
wally@zimolonglaw.com