As if you needed confirmation that the Federal Miller Act is a powerful tool for unpaid subcontractors, this is it. Even when a Prime ordered and accepted the Sub’s work, but didn’t have to pay under the Subcontract, the Subcontractor still got paid by the Prime’s Surety.
On a project for the U.S. Army Corps of Engineers in Qatar, a Subcontractor agreed to provide labor and materials for telecommunication systems. The Prime ordered and accepted a portion of the work and the Sub performed. The Corps then terminated the Prime for default, so the Prime refused to pay the Sub.
The Prime breached the Subcontract but because of its termination by the Corps and terms of the Subcontract, the Prime was not on the hook for any damages to the Sub. Notably, the Court stated that, if “the Court were to base its decision on whether a party had acted unprofessionally towards another party, had mislead another party (whether intentionally or not), or had wrongly accused another party of failing to perform under a contract, then the court would find the [Prime should pay the Sub].” But, the Court’s jurisdiction is limited to interpreting and applying only the applicable law, including the parties’ agreement.
However, under the Federal Miller Act, the Prime’s Surety was liable for the full amount of damages. The Surety’s liability is independent of its Principal’s liability and required only a showing that the Sub had performed the work and had not been paid.
Pragmatically, the Surety will pay the Sub and then demand reimbursement from its Principal, the Prime.
U.S. f/u/b/o VT Milcom, Inc. v. PAT USA, Inc., Case No. 5:16-cv-00007, (W.D. Va., July 14, 2017).
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
Trick or Treat in Government Contract Claims
Without a request for a contracting officer’s final decision, claimants may seek treats, but get tricked instead.
Owner Nonpayment is No Defense to Miller Act Claim
As if you needed confirmation that the Federal Miller Act is a powerful tool for unpaid subcontractors, this is it. Even when a Prime ordered and accepted the Sub’s work, but didn’t have to pay under the Subcontract, the Subcontractor still. . . .
Trust, but Verify
Rely at your own risk upon a Contracting Officer’s statements when statutes or contract provisions may conflict.
Payment for Verbal Changes When a Writing was “Required”
Even if your agreement can only be modified by a writing, you may still have a good argument to be paid for extra work.
