EDITOR'S NOTES | Issue 7-20
publication date: May 18, 2009
Contractors are sometimes shocked to discover how little control they have over the actions of their own surety. Once there has been a declaration of default by the project owner, the contractor cannot force the surety to challenge the legitimacy of that default. Nor can the contractor influence the surety’s method of accomplishing completion of the work, even though the contractor’s principals will ultimately be required to reimburse the surety for those costs. A recent decision by a California court emphasizes that the surety’s obligation on the performance bond runs to the project owner alone. The contractor is powerless.
A GAO decision describes the proper way for a procuring agency to make a price/technical tradeoff evaluation. A $20 million price premium was justified by a point-by-point technical comparison between the competing proposals, with specific advantages documented in detail.
An unlicensed contractor may be unable to enforce the contract or recover payment under the contract. But, a Florida court rules that the contractor is still protected by the workers compensation statutes despite noncompliance with the licensing statutes.
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