CAMBRIDGE MASSACHUSETTS BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Sometimes You Just Need to Call it a Day: Court Finds That Contractor Not Entitled to Recover Costs After Public Works Contract is Invalidated

June 29, 2020 — Garret Murai - California Construction Law Blog
January was a tough month in the courts for Hensel Phelps Construction Company. Hot off the heels of Hensel Phelps Construction Co. v. Superior Court, a case concerning the 10-year statute of limitations under Civil Code section 941, comes Hensel Phelps Construction Co. v. California Department of Corrections and Rehabilitation, Case No. B293427 (January 28, 2020), a bid dispute case . . . The Tale of a Bid, a Bid Protest, and Two Cases A. The Bid and Bid Protest On March 15, 2015, the California Department of Corrections and Rehabilitation (CDCR) issues an Invitation for Bid for the HVAC project at the Ironwood State Prison. The deadline to submit bids was April 30, 2015. Hensel Phelps Construction Co. submitted a timely bid and was determined to be the “apparent low bidder” with a bid of $88,160,000. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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Topic 606: A Retrospective Review of Revenue from Contracts with Customers

October 12, 2020 — Christopher Sisk & Robert Mercado - Construction Executive
The anticipation has been building regarding implementation of the new revenue recognition standard, known as Topic 606, by private companies. Public companies have reported under Topic 606 since the beginning of 2019. For private companies, the time is now. As of January 2020, private companies became subject to Topic 606 for all entities with a year-end of Dec. 31, 2019, or subsequent. However, with the COVID-19 pandemic affecting businesses across the board, this year any company with a year-end financial statement not yet issued can defer implementation of Topic 606 until the contractors’ next year end that falls after Dec. 15, 2020. What have we learned about the impact of Topic 606, if any, on construction contractors’ financial statements? The most significant impact relates to the presentation of contract assets and contract liabilities, and the disclosures associated with Topic 606. The recording of what is known as “the cost to fulfill a contract” is another area that has been affected. PRESENTATION OF CONTRACT ASSET AND CONTRACT LIABILITY A contract asset is defined in Topic 606 as an entity’s right to consideration in exchange for goods or services the entity has transferred to a customer, conditional on something other than the passage of time. Reprinted courtesy of Christopher Sisk & Robert Mercado, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Mr. Sisk may be contacted at Christopher.sisk@marcumllp.com Mr. Mercado may be contacted at Robert.mercado@marcumllp.com Read the court decision
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US Court Disputes $1.8B AECOM Damage Award in ‘Remarkable Fraud’ Suit

April 26, 2021 — Mary B. Powers - Engineering News-Record
A federal appeals court has thrown out a $1.8-billion award granted by a lower court three years ago to an AECOM unit in a bizarre legal battle involving a Nevada company that claimed to have won multiple contracts using the name of Morrison Knudsen—the former well-known Boise-based construction contractor that was sold in 1996, and through acquisitions, became part of design-build giant AECOM in 2014. Reprinted courtesy of Mary B. Powers, Engineering News-Record ENR may be contacted at ENR.com@bnpmedia.com Read the full story... Read the court decision
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Drone Use On Construction Projects

June 05, 2023 — Brent N. Mackay - ConsensusDocs
The use of drones, or small unmanned aircraft systems (“UAS”), has become common throughout the construction industry in all phases of construction, including pre-construction, progress of the work, project closeout, and maintenance. This article examines the federal regulations related to drone use, as well as considerations for construction professionals related to state and local laws, project location, and weather issues. Federal Regulations Regardless of the state in which the project is located, companies and persons operating commercial drones must observe regulations promulgated by the Federal Aviation Administration (“FAA”), which has the exclusive authority to regulate aviation safety, airspace navigation, and air traffic control. Reprinted courtesy of Brent N. Mackay, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs) Mr. Mackay may be contacted at bmackay@watttieder.com Read the court decision
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Is the Event You Are Claiming as Unforeseeable Delay Really Unforeseeable?

September 26, 2022 — David Adelstein - Florida Construction Legal Updates
Is the item or event you are claiming as an unforeseeable, excusable delay really unforeseeable? This is not a trick question. Just because your construction contract identifies items or events that constitute unforeseeable, excusable delay does not mean those items can be used as a blanket excuse or crutch for the contractor. That would be unfair. For instance, it is not uncommon for a construction contract to list as unforeseeable, excusable delay the following events or items: “(i) acts of God or of the public enemy, (ii) act of the Government in either its sovereign or contractual capacity, (iii) acts of another Contractor in the performance of a contract with the Government, (iv) fires, (v) floods, (vi) epidemics, (vii) quarantine restrictions, (viii) strikes, (ix) freight embargoes, (x) unusually severe weather, or (xi) delays of subcontractors or suppliers at any tier arising from unforeseeable causes beyond the control and without the fault or negligence of both the Contractor and the subcontractors or suppliers.” See, e.g., F.A.R. 52.249-10(b)(1). While the itemization of excusable delay may be worded differently, the point is there may be a listing as to what items or events constitute excusable delay. An excusable delay would justify additional time and, potentially, compensation to the contractor. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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Difference Between a Novation And A Modification to a Contract

May 10, 2022 — David Adelstein - Florida Construction Legal Updates
In contract law, there are two doctrines that have similarities but are indeed different. These doctrines are known as novation and modification. There are times you may want to make arguments relative to these doctrines because they are important for your theory of the dispute. Thus, you want to make sure you understand them so you can properly plead and prove the required elements to substantiate the basis of the theories. Understanding the elements will help you understand the evidence you will need to best prove your factual theories. A novation is essentially substituting a new contract for an old contract.

“‘A novation is a mutual agreement between the parties for the discharge of a valid existing obligation by the substitution of a new valid obligation.’” Thompson v. Jared Kane Co., Inc., 872 So.2d 356, 361 (Fla. 2d DCA 2004) (citation omitted). To prove a novation, a party must prove four elements: “(1) the existence of a previously valid contract; (2) the agreement of the parties to cancel the first contract; (3) the agreement of the parties that the second contract replace the first; and (4) the validity of the second contract.” Id. at 61. Whether the parties consented to the substitute contract can be implied from the factual circumstances. Id.

Parties are more familiar with a modification because it is not uncommon that parties may agree to modify contractual terms. The contract remains in effect but certain terms or obligations are modified. For example, a change order to a contract is a modification. Read the court decision
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Reprinted courtesy of David Adelstein, Kirwin Norris, P.A.
Mr. Adelstein may be contacted at dma@kirwinnorris.com

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New York Philharmonic Will Open Geffen Hall Two Years Ahead of Schedule

April 11, 2022 — James Tarmy - Bloomberg
After decades of setbacks, the New York Philharmonic will finally perform in a gut-renovated concert hall in October. “The key is—two years early—on budget and on schedule,” says a triumphant Deborah Borda, the president and chief executive officer of the New York Philharmonic, standing under a scaffold in what will be the completely revamped concert hall. A happy ending was by no means guaranteed. The venue, set at New York’s Lincoln Center, had problems almost as soon as its doors opened in 1962. Concertgoers and performers complained that the sound was muddy and deadening. Read the court decision
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Reprinted courtesy of James Tarmy, Bloomberg

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COVID-19 Could Impact Contractor Performance Bonds

March 30, 2020 — Ben Williams & MG Surety - Construction Executive
As COVID-19 continues to expand around the United States and the world, it may only be a matter of time before U.S. construction projects are affected by the virus. Performance bonds guarantee that a project will be completed by a contractor according to the contract. However, what if a contractor cannot complete a project on time due to widespread disease? What, if any, impact could the virus have on a contractor’s surety bond program? Risk Factors Several risks associated with the virus could trigger a performance bond claim. 1. Materials. The Chinese account for a large supply of construction materials, including steel, copper, cabinetry, etc. An inability to obtain these materials could significantly delay or stop a project all together. Even if a contractor is able to obtain them from other sources, it may be at a significantly higher cost than they put into the bid. 2. Labor. There is already a shortage of qualified labor in the construction industry. Additionally, construction already lends itself to the spreading of viruses; workers are often in close proximity, handling common materials, and they may not have an easily accessible place to wash their hands. Furthermore, even though many now have paid sick leave, there is often pressure not to use it. These things could magnify the labor shortage and make it difficult to complete projects on time. 3. Safety. Finally, the world is having a serious shortage of respirators. Because of widespread panic, many people have been purchasing N95 respirators—so much that the Surgeon General has asked people to stop buying them. It has created a shortage for people who really need them, like contractors. If contractors can’t get these safety masks, certain trades will either be unable to work, or risk continuing the project without masks, which would endanger workers and open them up to OSHA penalties. Reprinted courtesy of Ben Williams and MG Surety, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Mr. Williams may be contacted at benw@mgsuretybonds.com

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