Volume 7 - Number 11 | March 16, 2009 - Construction Claims Advisor

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You are here: Home » Volume 7 - Number 11 | March 16, 2009

Volume 7 - Number 11 | March 16, 2009

EDITOR'S NOTES | Issue 7-11: Critical path scheduling has long been an integral tool of the construction process. It enumerates all the activities necessary to complete a project, the time required to complete each activity and the dependencies between them. When project delays compromise the critical path, the management team must exercise good faith in determining appropriate costs and liabilities, especially when concurrent delays are involved. That decision cannot be a random assignment of culpability. This week’s first case considers the decision of a contractor to assign all delay liabilities to one subcontractor, despite evidence that showed more than one party was responsible for the project’s delays.

The second case is a lesson in fiscal responsibility as well as the definition of a prevailing party in a mechanic’s lien. The attorney fees and costs for one party were more than three times the amount of the disputed lien!

And third, a subcontractor working under two separate contracts on one project could only collect payment on one of the contracts. Because the owner went bankrupt, the prime contractor did not receive payment. As a result, the sub was also denied payment for the work performed on the second contract, which contained a pay-if-paid clause. The first contract omitted this clause.

CONCURRENT DELAY COULD NOT BE APPORTIONED AMONG PARTIES: Unless a project’s critical path can prove otherwise, a contractor cannot make one subcontractor the scapegoat for concurrent delays on a GSA project.

FLORIDA SUPREME COURT DEFINES “PREVAILING” MECHANIC’S LIEN PARTY: An ambivalent statutory definition of a “prevailing party” in a mechanic’s lien causes problems when determining the award for attorney fees and costs. In this case, the fees far outweigh the actual lien amount.

TEXAS COURT ENFORCES “PAY-IF-PAID” CLAUSE IN SUBCONTRACT: A pay-if-paid clause omitted from one subcontract but not another gives rise to payment questions when the project owner goes bankrupt.