(Construction Claims Advisor: Vol. 24, Iss. 11, July 1, 2026)
Editor's Notes - Case Summaries
It is common for people in the same industry or line of work to discuss business. Trade associations exist primarily to address challenges or problems common to the trade, but any discussion that includes the cost or pricing structure of individual businesses is a slippery slope.
A federal district court convicted an executive of a ready-mix concrete company for criminal conspiracy to restrain trade. The defendant tried to portray his communication with competitors as innocent trade talk. A federal appeals court, however, ruled that the evidence supported findings of price fixing, bid rigging and market allocation. See: United States v. John David Melton
The other case in this issue involved a labor union’s ability to recover from a public works payment bond. The union alleged that a subcontractor on a job had failed to pay mandatory contributions to employee benefit plans. A Massachusetts court ruled that a collective bargaining agreement created a “contractual relationship” between the prime contractor (the principal on the payment bond) and the labor union.
Exchange of Price Information Led to Bid Rigging Conviction
A federal appeals court has ruled that although the exchange of cost or pricing information among competitors is not necessarily a criminal act, a jury may infer price fixing or bid rigging from such communication.
Labor Union May Recover Against Public Works Payment Bond
A Massachusetts appellate court has ruled that for purposes of public works payment bond protection, a labor union had a “contractual relationship” with the prime contractor. The union could pursue the bond for a subcontractor’s unpaid benefit plan contributions.
(Construction Claims Advisor: Vol. 24, Iss. 10, June 15, 2026)
Editor's Notes - Case Summaries
When a contractor falls behind schedule, it is common for a public project owner to send a “cure notice.” The contractor must show how it will get on the path to timely completion. There is an implicit threat of termination for default, but the government can’t terminate prior to the contractual completion deadline unless the contractor has no reasonable likelihood of timely completion. What happens when a contractor responds to a cure notice with a proposed “revised schedule” that indicates completion after the deadline?
The US Court of Appeals for the Federal Circuit recently ruled that such a response was a breach of contract. Rather than showing how it would achieve timely completion of the work, the contractor repudiated its contractual obligation to do so. There was no evidence of excusable delay, and the government could default the contractor without a showing of no reasonable likelihood. See: Sergent’s Mechanical Systems, Inc. v. United States
The second case in this issue involved a prime contractor’s sponsorship of a subcontractor’s pass-through claim against the federal government. The prime contractor said it had no reason to believe the sub’s claim pricing was incorrect. This did not meet the standard for certifying a sponsored subcontractor claim; however, the defective certification could be corrected. The contractor and subcontractor could proceed with appeal of the government’s denial of the claim. See: Appeal of The Haskell Company
The third case comes from the New Hampshire Supreme Court. A contract stated the change order clause could not be waived by failure to strictly conform to the change order process. There had been a waiver nonetheless—the parties had not just deviated from the process; they had persistently ignored it altogether. See: RJH Builders, LLC v. Thistle
Construction schedules are prepared by contractors to plan and manage their work. Schedules can also serves payment measurement vehicles (cost-loaded schedules), for reporting progress and for determining delays and time extensions. To that effect, contractors have been known to manipulate schedules to their advantage, such as putting owner-responsible activities on the critical path so a delay to an owner activity will result in delaying project completion and entitling the contractor to extended overhead costs. In addition, this can also result in masking contractor delays. WPL's annual presentation of Jim Zack's Schedule Games series examines the many ways (45) that schedules can be manipulated and what owners can do to defend against them. Download the free report here.
Tips, Techniques, and Tutorials
Importance of Clarity and Specificity This week’s cases illustrate the importance of being clear and precise when preparing, negotiating, and settling change orders. Both owners and contractors should have a checklist that includes, as a minimum, the following:
Proposals and scope of work should be explicit and accurately priced. This facilitates and expedites acceptance and agreement by owners.
Owners should be immediately notified, in writing, of any changes that may affect the schedule. Time changes should be reflected in signed change orders.
If disputed items exist, they should be separated out from undisputed issues for separate resolution. This facilitates settlement of both disputed and undisputed items and limits exposure.
Where possible, actual costs for disputed items should be separately tracked.
Numerous disputes cascade into litigation merely because factual issues were not documented or timely addressed.
Editor's Notes - Case Summaries
Individuals enter into business associations for a variety of good reasons. One is the limitation of personal liability. Corporations, limited liability companies and limited partnerships all offer this advantage. But when conducting business, individuals must be careful. When signing any document, the individual should include their title and name of the business entity they represent.
The managing member of an LLC accepted an electronically transmitted proposal from a contractor. The individual apparently did not notice that the signature block read “Individually and Managing Member.” The individual was personally sued for payment under the contract. See: Consolidated Construction Co., Inc. v. Gridiron Entities, LLC and Brian Johnson.
The other case in this issue involves filed sub-bids on public works projects. While these trade contracts are tied to sections of the contract specifications, they may incorporate by reference other work that is outside of the trade. A drawing listed in the mechanical specifications depicted elements of site improvement work. See: Costa Brothers Masonry, Inc. v. Town of Hingham.
Top Ten Owner Concerns - Part 1
Contractor concerns include cost, labor market and supply chain mishaps. Owner concerns include schedule, quality and budget. At a Construction Superconference a few years back, a popular session was "Things Owners Hate to See From Contractors, Subs and Sureties, and What Some Owners are Doing About it." In Part 1 of this 2-part article, we summarize the "...to See" part. Part 2 will address what owners are doing about it back then.
Webinar Summary Report - The Role of Soils
Webinar summary report: The Role of Soils in the Construction Process: From Site Investigation to Claims, recaps the importance of site investigations during the bidding process, then following through on contract award, contract/documentation management and what you need to do if a claim in in the works. This week's report is based upon a webinar produced by Tom Frisby and Bob Humphries, with unique insights not found in many differing site conditions webinars. Click here to download the report.
