Prime contractors, have you ever submitted a subcontractor’s claim to a public owner? Subcontractors, have you ever wanted to submit a claim against the government, but you had no contract with the government?
Generally, if the prime has or could have at least some liability (even potentially), then the prime can “pass-thru” the sub’s claim against the government.
A pass-thru claim will fail if the prime has severed or extinguished all liability for the claim between itself and its sub. This can be done by language that may already be in the subcontract or by a later agreement of release or settlement.
But, the same subcontract with the right language or a later agreement between the prime and sub (e.g., liquidation agreement) can preserve liability to keep a pass-thru claim alive.
A short success story:
A prime contractor on a project in Slick Rock, Colorado for the U.S. Dept. of Energy agreed to remediate uranium mill tailings. The prime submitted a pass-thru claim by one of its subcontractors against the Government (the Sub’s claim “passed-thru” the Prime to the Government).
The Government’s efforts to dismiss the claim failed because the prime had to pay whatever recovery it got from the Government to the sub. Only when the recovered amount (no matter how small) was paid, by the Government to the prime and then from the prime to the sub, was the prime’s liability extinguished. Until that point, the fire of the claim kept burning.
M.K. Ferguson Co., et al. v. U.S., Ct. Fed. Claims, No. 12-57C (April 14, 2016)
Linking Obligations
If you want to bind the subcontractor to the prime in every way the same as the prime is bound to the owner, then the incorporation clause of the subcontract should be: . . .
Termination of Government Contracts for Convenience (T4C)
Imagine you’re a Government Contractor under a firm, fixed-price contract and you’ve done nothing wrong. Nevertheless, the Government has decided to unilaterally end its contract with you. Yes, the Government can do this...
Government Contractors: Build a Snowman in August
As a Government Contractor, when have you agreed to perform a certain way, but later realized that another way is better for everybody? When the Government agrees, expressly or impliedly, to the alternative performance, it waives a credit for the unperformed work.
Construction Dispute Settlement: Dealing with Details
Reap the benefits of settling a construction dispute by doing these things.
E-mail Signature Not Enough to Certify a Claim
Construction project professionals routinely send e-mails with “signatures,” which typically include the sender’s typewritten name, title, contact information, and/or company logo. But, this sort of e-mail “signature” is not enough to certify a claim to the Government.
Government Contractors: Ask for a “Sum Certain” in Your Claim
If your Claim includes an item for damages with an amount “TBD,” you could lose the entire Claim.
Contractors: Be Aware When Contracting with Virginia Public Agencies
Without a valid contract, a Virginia public entity has no duty to to pay for any of your work.
Constructive Acceleration
Contractors know that time is money. So, the point is clear when expressly told to “Speed Up! Go Faster!”
But, what do you […]
Construction Contracts & Whodunit
Imagine reading a crime novel and just when you think you figured out whodunit, a plot twist suggests a different culprit. In construction contracting, finding the right answer can be a difficult task when
