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Volume 5 - Number 48 | December 3, 2007

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  EDITOR'S NOTES | Issue 5-48
The idea of paying a prevailing wage first emerged in the late 19th century. Originally meant to control the number of hours worked in a day, allow for overtime pay and legislate child labor requirements, the idea of prevailing wages surged in the 1930s as government-sponsored construction projects accounted for more than 50 percent of the nation’s building projects. Today, many states have some form of prevailing wage statute, also called Little Davis-Bacon Acts after the federal act of the same name that controls wages on federal construction projects.

In this week’s first case, a California appeals court decides that a hauling company is exempt from paying the prevailing wage for its work on a state project.

In a state court, the reason behind the late completion of a project is not as important as the fact that the project ended 14 days behind schedule. The proffered reason for the delay is rejected and liquidated damages are assessed.

The ASBCA takes a hard stance against a government agency that issued work directives to a contractor that affected the contractor’s efficiency on the project. The agency is ordered to make restitution insomuch as it restores the contractor to the financial position it should have been had the agency not interfered with the original contract agreement.

This week’s final case should be of particular interest to contractors that rely on information from utility companies. We have covered this case in the past—this most recent opinion reverses the previous ruling.
  UTILITY NOT LIABLE TO CONTRACTOR FOR INACCURATELY MARKED LINES

In a reversal of its previous opinion, a full panel of appellate judges (sans one) opines that a contractor cannot recover delay damages from a utility for wrongly marked lines if the utility is not a party to the construction contract.
  GOVERNMENT DIRECTIVE WAS CONSTRUCTIVE SUSPENSION OF WORK

A contractor’s increased performance costs can be levied against a government agency that constructively suspending the contractor’s work through a work directive. However, the amount has its limits—field overhead mark-ups cannot be included.
  LATE COMPLETION NOT CAUSED BY SLOW REVIEW OF PROPOSED “EQUAL”

A state appellate court largely ignores a contractor’s argument that a project engineer’s late response for approval on substitute parts was the reason for late completion. The court upholds a lower court’s ruling for liquidated damages.
 
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