Construction Contracts

Subscribe to Construction Contracts

On March 28, 2020, the Ohio Facilities Construction Commission (OFCC) Executive Director Cheryl Lymon circulated a letter to contractors and design professionals detailing the obligations of businesses holding OFCC contracts during the recent COVID-19 pandemic. The letter reiterates the importance of employers complying with Ohio Department of Health Director Amy Acton, MD, MPH’s March 22,…

On Friday, March 27, Ohio Governor Mike DeWine signed an order that would ensure every state contractor that is operating as an essential business is following best practices regarding social distancing, cleaning, etc.  DeWine also reiterated in his afternoon press conference on Saturday, March 28 that state contractors performing essential contracts should expect inspections in …

On March 24, the Ohio Department of Transportation released a “Statement Regarding COVID-19 Response” in an attempt to provide guidance for contractors working on ODOT projects.  A copy of the Statement is available here.  The major takeaway from the Statement is that ODOT confirmed its position that “specific circumstances directly caused by the COVID-19/Coronavirus …

As of Thursday, March 19, 2020, Ohio State agencies are reporting that construction projects will continue, despite the Coronavirus.  The Ohio Department of Transportation (ODOT) directed office staff, who are able, to work remote, but confirmed to me personally on Monday March 16 that project work should continue.  Ohio Facilities Construction Commission (OFCC) also reported …

The COVID-19 coronavirus is impacting every aspect of the economy, and construction will not be exempt.  Materials and deliveries may be slowed, crews quarantined and unavailable, and projects delayed.  We view COVID-19 as an event beyond the control of a party (an “act of G-d”), falling within the force majeure provision of most contracts.  Some…

The Seventh District Court of Appeals’ decision in Union Local School District v. Grae-Con Construction is another important victory for the Ohio construction industry in the ongoing debate over the proper application of Ohio’s construction statute of repose, R.C. 2305.131.  The Seventh District Court of Appeals, applying the Supreme Court of Ohio’s July 2019 decision in New Riegel Local School District v. Buehrer Group Architecture & Engineering, Inc., et al., reaffirmed dismissal of stale breach-of-contract claims under Ohio’s construction statute of repose.  The Seventh District rejected three separate arguments advanced by Union Local, which was attempting to overturn the trial court’s rejection of Union Local’s breach of contract claims against contractors and other project participants.  The Union Local opinion is yet another example of Ohio courts interpreting and applying the construction statute of repose to prevent prosecution of stale claims many years after project completion.

Union Local’s first argument was that the construction statute of repose did not apply to breach of contract claims.  The Union Local appeal had been stayed pending the outcome of New Riegel, so the Seventh District was able to swiftly dispose of Union Local’s argument based on the Supreme Court of Ohio’s July 2019 holding that Ohio’s construction statute of repose bars breach of contract claims as well as tort claims filed more than 10 years after project substantial completion.  (Hahn Loeser previously summarized the impact of New Riegel here.) …
Continue Reading

On September 24, 2019, the Ohio Supreme Court announced the General Assembly has broad authority to regulate public-works contracts that subject Ohio’s workers to residency preferences or restrictions. In The City of Cleveland v. The State of Ohio, the Court concluded the General Assembly properly enacted R.C. 9.75, which prohibits municipalities and other political subdivisions from requiring a contractor on a public-improvement project to employ a certain number or percentage of local residents. The statute also prohibits municipalities and other political subdivisions from providing a bid award bonus or preference to contractors as an incentive to employ a certain number or percentage of its own residents.

The decision stemmed from the City of Cleveland’s local ordinance requiring “public-construction contracts in an amount of $100,000.00 or more to include a provision mandating that city residents perform 20 percent of the total construction work hours under the contract.” The purpose of the ordinance was to help alleviate unemployment and poverty in Cleveland and included penalties for a contractor’s failure to comply with the contractual provision. In 2016, the General Assembly enacted R.C. 9.75, which was in direct conflict with the city’s ordinance. The city of Cleveland sought an injunctive relief and a judgment declaring R.C. 9.75 to be unconstitutional because it conflicted with the Home Rule Amendment, Article XVIII, Section 3 of the Ohio Constitution, which reserves all powers of local self-government to municipalities that are not in conflict with general laws. The Eighth District Court of Appeals affirmed the ruling of the trial court permanently enjoining enforcement of R.C. 9.75, finding the statute was not within the General Assembly’s authority under Article II, Section 34 of the Ohio Constitution, and violated the Home Rule Amendment.

…
Continue Reading

The most common types of “differing and changed conditions” in construction contracts deal with subsurface issues such as inadequate support, unanticipated groundwater, or unanticipated natural or artificial subsurface obstructions. But what happens when an unusual differing and changed condition, such as an endangered species, or even an unexpected burial ground, impacts your project?…
Continue Reading