Justia Construction Law Opinion Summaries

In a case of first impression, the Pennsylvania Supreme Court granted review to determine whether the Commonwealth Court properly calculated the “cost” of steel products under the Steel Products Procurement Act (“Steel Act” or “the Act”), which required that “75% of the cost of the articles, materials and supplies [of a steel product] have been mined, produced or manufactured” in the United States. G. M. McCrossin, Inc. (“McCrossin”), a contracting and construction management firm, served as the general contractor for the Lycoming County Water and Sewer Authority (“Authority”) on a project known as the Montoursville Regional Sewer System Waste Water Treatment Plan, Phase I Upgrade (“Project”). In July 2011, McCrossin entered into an agreement with the Authority to supply eight air blower assemblies, which move air from one area to another inside the waste treatment facility. United Blower, Inc. (“UBI”), became a subcontractor on the Project. UBI was to supply the eight blowers required by the original specifications and was to replace the three digestive blowers as required by a change order. UBI prepared a submittal for the blowers which McCrossin in turn submitted to the Authority’s Project engineer, Brinjac Engineering (“Brinjac”). As part of the submittal, McCrossin provided Brinjac and the Authority with a form, which verified that 75% of the cost of the blowers was attributable to articles, materials, and supplies (“AMSs”) that were mined, produced, or manufactured in the United States. The total amount McCrossin paid UBI for the blower assemblies and digestive blowers was $239,800. The amount paid by the Authority to McCrossin for these items was $243,505. Authority employees began to question whether McCrossin and UBI provided products that complied with the Steel Act. The Supreme Court held the Commonwealth Court improperly calculated the cost of the steel products at issue, thereby reversing and remanding for further proceedings. View "United Blower, et al. v Lycoming Water & Sewer" on Justia Law

The Court of Appeals affirmed the decision of the Maryland State Board of Contract Appeals (MSBCA) granting summary disposition as to the Maryland State Highway Administration's (SHA) claims against Brawner Builders, Inc. and Faddis Concrete Products, Inc., holding that there was no error in the MSBCA's decision to grant SHA's motion for summary decision.SHA and Brawner entered into a contract for the construction of noise barriers along a section of interstate. Faddis manufactured noise wall panels for Brawner's use in connection with the project. SHA subsequently suspended approval of Faddis-produced noise panels. Faddis filed a procurement contract claim. The MSBCA issued summary disposition to the SHA, concluding that Faddis had no standing to file such a claim. At issue on appeal was whether Faddis's status as a "pre-approved supplier" of concrete panels on construction projects administered by the SHA constituted a "procurement contract" with the State under the State Finance and Procurement Article. The circuit court reversed. The court of special appeals reversed the circuit court. The court of Special Appeals affirmed, holding that the MSBCA properly dismissed Faddis's claims and entered judgment in SHA's favor. View "Brawner Builders, Inc. v. Maryland State Highway Administration" on Justia Law

In 2002, Farfield contracted with SEPTA for improvements on Philadelphia-area railroad tracks. The federal government partially funded the project. Work concluded in 2007. As required by federal regulation, Department of Labor (DOL) prevailing wage determinations were incorporated into the contract. Farfield was required to submit to SEPTA for transmission to the Federal Transit Administration a copy of Farfield’s certified payroll, setting out all the information required under the Davis-Bacon Act, 40 U.S.C. 3142(a), with a “Statement of Compliance” averring that the information in the payroll was correct and complete and that each worker was paid not less than the applicable wage rates and benefits for the classification of work performed, as specified in the applicable wage determination. Falsification of a payroll certification could subject Farfield to criminal penalties or civil liability under the False Claims Act (FCA).A union business manager suspected that Farfield had won government contracts with low bids by intending to pay less-skilled workers to perform certain work that would otherwise have been the bailiwick of higher-skilled, higher-paid workers. Ultimately, the union filed a qui tam FCA complaint. The United States declined to intervene. The court entered a $1,055,320.62 judgment against Farfield: $738,724.43 to the government and $316,596.19 to the union, plus $1,229,927.55 in attorney fees and $203,226.45 in costs. The Third Circuit affirmed. In view of the totality of the circumstances, Farfield’s Davis-Bacon violations were not minor or insubstantial. View "International Brotherhood of Electrical Workers v. Farfield Co" on Justia Law

The employee of a subcontractor on a state public works project sued the prime contractor’s surety bond for unpaid labor under Alaska’s Little Miller Act. The trial court ruled the employee failed to give notice to the contractor within the statutorily required 90 days of his last date of labor on the project. The trial court entered a directed verdict against the employee. The employee appealed to the superior court, which denied the appeal, and then petitioned the Alaska Supreme Court for hearing. This case presented two issues of first impression: (1) how to define “labor;” and (2) whether “notice” was effective on the date of mailing or the date of receipt. Under the Little Miller Act, the Supreme Court defined “labor” as work that was “necessary to and forwards” the project secured by the payment bond, and held the effective date of “notice” to be the date notice is sent via registered mail. The superior court judgment denying the employee's appeal was reversed and the matter remanded for further proceedings. View "Dat Luong DBA LVDH Construction v. Western Surety Co." on Justia Law

Woodrock, Inc. appealed the grant of summary judgment dismissing its negligence and other claims against McKenzie County, North Dakota. In September 2018, Woodrock sued the County for violations of N.D.C.C. ch. 48-01.2 and negligence. Woodrock alleged the County hired Edwards Gravel & Trucking, LLC to supply aggregate to aggregate stockpiles, the County did not obtain a payment bond from Edwards Gravel, Woodrock furnished materials for use in the project, and Edwards Gravel did not pay Woodrock for the materials. Woodrock claimed that the County violated N.D.C.C. section 48-01.2-10 and was negligent by failing to obtain a bond from Edwards Gravel and that the County was liable to the subcontractors and material suppliers who worked on the project. Woodrock requested damages in the amount of $298,629.54. On appeal to the North Dakota Supreme Court, Woodrick argued the district court erred in concluding a project to stockpile aggregate materials was not a public improvement and the bond requirement under N.D.C.C. 48-01.2-10 did not apply. The Supreme Court concluded supplying aggregate materials to stockpiles for general use in maintaining and repairing county roads did not constitute “construction of a public improvement.” Therefore, the Court affirmed the district court's judgment. View "Woodrock, Inc. et al. v. McKenzie Cty." on Justia Law

In 2003, the government awarded Parsons a $2.1 billion indefinite-delivery, indefinite-quantity contract for planning and construction work to be described in subsequent task orders. In 2005, the government issued a $34 million task order to complete an existing, concept-level design and construct the Temporary Lodging Facility and Visiting Quarters, at the McGuire Air Force Base. Design and construction were completed. The Air Force accepted the completed facilities for “beneficial use” in September 2008. In 2012, Parsons submitted a claim for approximately $34 million in additional costs that Parsons allegedly incurred in the design and construction process. The Armed Services Board of Contract Appeals awarded Parsons about $10.5 million plus interest.The Federal Circuit reversed in part after holding that the Board had Contracts Dispute Act jurisdiction 41 U.S.C. 7102(a)(1), (3). The court dismissed Parsons’ appeal as to its payroll claim and reversed the Board’s denial of recovery to Parsons for its claim to construction costs. On remand, the Board must award Parsons the difference between its cost in constructing a substituted design compared to the cost Parsons would have incurred in constructing a structural brick design. The court affirmed the Board’s conclusion that Parsons’ costs awarded by the Board were reasonable. View "Parsons Evergreene, LLC v. Secretary of the Air Force" on Justia Law

Dunbar, a Service Disabled Veteran Owned Small Business (SDVOSB), was awarded an Army Corps of Engineers ditch and tributary project in Arkansas. Dunbar then hired a subcontractor, Harding Enterprises, to work on the project. After Harding Enterprises defaulted, Dunbar made a demand on the bond guaranteed by Hanover, which Hanover denied. Hanover then filed suit seeking a declaration that it had no obligations under the bond and seeking to have the bond rescinded based on illegality of the subcontract.The Eighth Circuit reversed the district court's grant of summary judgment in favor of Hanover, holding that the district court erroneously concluded that the subcontract was undisputedly in violation of 13 C.F.R. 125.6(b)(2) because the percentage that Dunbar spent on contract performance relative to the prime contract price could not be conclusively ascertained until conclusion of performance of the prime contract. The court also held that the potential that Hanover may have liability under the False Claims Act if it were to perform under the bond does not justify discharging Hanover from its obligations and rescinding the contract. View "Hanover Insurance Co. v. Dunbar Mechanical Contractors, LLC" on Justia Law

ACC, the subcontractor on a Corps flood protection project, filed suit against the prime contractor, Hirani, for breach of contract and the providers of Hirani's payment bond, Colonial, under the Miller Act for unpaid labor and materials. The district court entered judgment in favor of ACC and awarded damages against both defendants.The DC Circuit remanded the case to the district court to make findings of fact as to when the Prime Contract was terminated and whether ACC performed labor or supplied material on April 29 and/or April 30. In the event that Colonial and Hirani cannot meet their burden to show that ACC's Miller Act claim was untimely, then this court can resolve the parties' other Miller Act contentions. If Hirani and Colonial show that termination occurred before April 29 or that ACC performed no labor or supplied no material on April 29 or 30, the court can then address the Miller Act statute of limitations issue. The court affirmed the restitution damages award against Hirani on ACC's contract claim where ACC has not provided the court with any basis to deviate from the principle of D.C. law that restitution, not quantum meruit, is the proper remedy where there is an express contract between the parties. The court deferred addressing other issues raised by the parties. View "United States v. Hirani Engineering & Land Surveying, PC" on Justia Law

In August 2013 the Alaska Department of Transportation and Public Facilities (DOT) entered into a contract with Osborne Construction Company to upgrade the Aircraft Rescue and Fire Fighting building at the Fairbanks International Airport to withstand damage in the event of an earthquake. The DOT appealed a superior court decision reversing the agency's decision in an administrative appeal. The agency denied a contractor’s claim for additional compensation because the claim was filed outside the filing period allowed by the contract. After applying its independent judgment to interpret the contract, the Alaska Supreme Court agreed with the DOT that the contractor failed to file its claim within the period allowed. The Supreme Court therefore reversed the superior court’s decision and reinstated the agency’s. View "Alaska, Dept. of Transportation & Public Facilities v. Osborne Construction Co." on Justia Law

In this construction contract dispute, the Supreme Court held that the San Antonio River Authority possessed the authority to agree to arbitrate claims under Texas Local Government Code Chapter 271 and exercised that authority in the contract and that the judiciary, rather than an arbitrator, retains the duty to decide whether a local government has waived its governmental immunity.The River Authority hired Austin Bridge and Road L.P. for a construction project. The parties agreed to submit any disputes about the contract to arbitration. Austin Bridge invoked the contract's arbitration provisions when disagreements about the scope of work and payment arose. After the arbitrator denied the River Authority's plea of governmental immunity, the River Authority sued Austin Bridge, arguing that it lacked the authority to agree to the contract's arbitration provisions. The trial court concluded that the arbitration provisions in the contract were enforceable. The court of appeals agreed that the River Authority had the authority to agree to arbitrate but concluded that a court, rather than an arbitrator, must decide whether the River Authority was immune from the claims against it. The Supreme Court affirmed, holding that chapter 271 waived the River Authority's immunity from suit for Austin Bridge's breach of contract claim. View "San Antonio River Authority v. Austin Bridge & Road, L.P." on Justia Law