Joint ventures, teaming arrangements and extensive subcontracting sometimes blur the identity of the “contractor” on the project. The parties working at the site may not match up with the name on the contract. It is the party on the contract, of course, that is responsible to the project owner. Should the owner care who actually performs the work?

In a case reported this week, a prime contractor on a federal project subcontracted 87 percent of the work. The contractor designated the president of the subcontracting corporation as assistant project manager, with authority to “run the project.” That individual issued directives on the contractor’s company letterhead. The government argued that the contractor essentially brokered the contract, violating the Anti-Assignment Act and thus annulling the contract. A federal administrative board rejected that argument.

Other cases this week involve a contractor’s liability to a subcontractor for unnecessary rework ordered by a project owner and the ability of a terminated time and materials contractor to recover anticipated lost profit. A Louisiana court said the contractor should have intervened on behalf of the subcontractor. A California court said there was no legal prohibition against recovery of the profit, but the contractor failed to prove its damages.

A teaming arrangement involving extensive subcontracting and subcontractor involvement in project administration did not in itself violate the Anti-Assignment Act. The contractor retained ultimate responsibility and risk for contract performance.