Volume 6 - Number 34 | September 2, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 34 | September 2, 2008

Volume 6 - Number 34 | September 2, 2008

EDITOR'S NOTES | Issue 6-34: In the business world, second chances are rare, though not impossible. In the legal world, however, second chances are more common thanks to a lively appellate system. For example, during a jury trial, a contractor tried to present information that a wrongful claim against its performance bond impaired its ability to pursue additional public work resulting in lost anticipated profits. The court disallowed the argument, but the contractor successfully appealed the decision, garnering a second opportunity to make its case.

In another case, a losing bidder on a public contract may have a second chance to win the contract. The source selection authority used personally procured information to influence her decision when awarding a public facilities management contract. The contractor waged a successful protest against the agency.

Second chances were not possible for another contractor. The contractor finished its project late and unsuccessfully argued for defense coverage from its insurer for a breach of contract suit brought by the owner.

CONTRACTOR ALLOWED TO PURSUE LOST PROFIT INCURRED DUE TO PERFORMANCE BOND CLAIM: A contractor gets a second opportunity to prove lost anticipated profits after a public agency wrongly files a claim against the contractor’s performance bond.

PROCURING AGENCY USED IMPROPER UNDISCLOSED EVALUATION CRITERIA: Insider information presented during a source selection unfairly favors an incumbent contractor over a comparable competitor on a facilities management contract.

LIQUIDATED DAMAGES WERE NOT “LOSS OF USE” FOR PURPOSES OF INSURANCE COVERAGE: A contractor’s late project completion does not trigger its insurer’s duty to defend when the owner sues for liquidated damages.