An electrical contractor once suffered a loss equal to one-third of its original contract. Neither extra nor changed work caused the loss. It was the result of the general contractor terribly mismanaging a job.
A recent case ruled that the contractor’s markup for overhead on a change order covered all overhead, both field and home office. On first impression, this ruling may not seem unusual, but the facts of the case indicate an unfairness in the result.
Energy efficiency has become one of the building blocks of the larger effort to transform the way society consumes electricity. Within the realm of efficiency, demand-response programs have become one of most effective tools for utilities to cut back on consumers’ energy consumption.
The federal Miller Act has been around since the mid-1930s. You would think that, by now, all questions about its application would have been resolved by the courts. Unfortunately, hundreds of lawsuits remain that involve interpretations of the Miller Act.
On a $28 million infrastructure contract, a contractor suffered an $11 million loss because of high charges by the utility companies for their part of the installation. The contractor, it turned out, got no remedy in court and, therefore, no means of recouping this major loss.
Basic corporate law states you do not have a contract with a corporation until you have reached an agreement with an authorized representative. The same is true with satisfying a contract’s written notice requirements.
During my career, I’ve learned a lot about things that are not exactly estimating but are closely related. For instance, I had to learn about relationship management with vendors and customers. I was required to learn enough about electrical engineering to finish the incomplete plans we often get.
Every state in the United States has its own unique lien laws. Because of the local nature of these statutes, there are major differences, state to state, in how and where liens are filed and perfected, who gets “notice” of the lien, and what types of claims are lienable.
Sparky Electric is an experienced contractor. Most of its business has been in light commercial construction, such as midsize office buildings, an occasional strip mall and a few schools. Now a large project is in the works, and the owner is looking for design/build electrical contractors.
An electrical contractor, let’s call him Sparky Inc., was running into financial difficulty. My client, call him Cathode Inc., entered into negotiations to buy Sparky and, in the meantime, agreed to finish one of Sparky’s jobs on a university building as an electrical subcontractor.
There may not be a “typical” changes clause for construction contracts, but most contracts have something giving the right to the owner or general contractor to order changes. Each of these clauses will have variations regarding written notice, time extensions, paperwork requirements, etc.
How would you react if you discovered—after the fact—that you had signed a contract that permitted the other contracting party (owner or general contractor) to act arbitrarily, to actively interfere with your work, to act in bad faith, and even to be guilty of fraud?