Since Y2K, sureties for federal projects in Virginia have been unable to defend against bond lawsuits by asserting pay-if-paid or pay-when paid clauses. Now, sureties are also unable to rely upon no-damage-for-delay (ND4D) and owner-related disputes clauses.
Recently, the Federal District Court for the Eastern District of Virginia held that a Prime’s Surety could not use the ND4D clause to defend against a Sub’s Miller Act lawsuit. Neither was the Sub required to wait until resolution of delays that the Owner may have caused, despite an express subcontract provision requiring as much.
The Court held that “the subcontract cannot eliminate the right to payment altogether, or delay it, unless the subcontract does so in a manner consistent with the terms of the Miller Act.” The only consistent means of which this author knows, and which the Court endorsed, were interim payment waivers for work already performed. The Court likened ND4D clauses to prospective waivers, which the Court said are prohibited by the Miller Act (although no such language exists in the Act).
Your Contract Can Handle COVID-19
Uncertainty and risk are not new or novel to contractors. Contracts reduce uncertainty and share the risk of doing or providing something. COVID-19 may have contributed to, but it has not single-handedly created, uncertainty and risk.
Contractors Can Use RFI to Notify the Government
The Board (and the government) should not elevate form over substance in evaluating the sufficiency of a contractor’s notice.
Taxes Due!
It’s tax season again, so it’s time to pay the piper.
Contractor Wins when Government Reconsiders Accord
Ever had buyer’s remorse or second-guessed a decision? When the U.S. Army Corps of Engineers did that, a Contractor won its claim […]
Claim Certified with Digital Signature Deemed OK
The law is not a trend-setter. It doesn’t readily change or adapt to tech. So, a commonplace practice in business became a dispute when a claimant digitally certified a claim under the Contract Disputes Act.
Acceptance and Intervening Cause Avoided Construction Warranty Claim
Like cars, computers, and appliances, construction projects include warranties too. Similarly, construction project warranties are limited to causes within the contractor’s control […]
Insurance Company Had No Duty to Defend Under Eight Corners Rule
To decide if an insurer has a duty to defend, a Virginia State or Federal Court may only look at the allegations in the complaint and the insurance policy to determine if a judgment against the insured will be covered by the policy.
Owner SOL When Mandatory Mediation Didn’t Toll Statute of Limitations
Contract interpretation strives to find the meaning of all parts together.
Government Must Review Claims in Good Faith, Not “Conjure Up” a “Baseless Retaliation”
A contracting officer’s review of certified claims submitted in good faith is not intended to be a negotiating game where the agency may deny meritorious claims to gain leverage over the contractor.
