Volume 38, Issue 4, April 2003

ContractGlazing

ASA works for Glazing Subcontractors; 
Succeeds in Duty to Defend Ruling 

The American Subcontractors Association (ASA) has filed papers with the U.S. Court of Appeals for the Ninth Circuit, asking for the expansion of remedies available to glazing and other subcontractors under a payment bond on a federal construction project. In the appeal of U.S. ex rel DiDomenico v. North American Construction Co. et. al, ASA says it is helping a subcontractor that made a claim under the federal Miller Act to receive full payment for work, plus attorney fees and penalties.

According to ASA, the codified Miller Act says subcontractors may sue a payment bond surety on a federal construction project “for the sum or sums justly due” when payment is not properly made. The statute, however, does not define “sums justly done.” ASA says that while federal courts regularly look to state law to determine the amounts “justly due” to a subcontractor, the courts have been reluctant to award items such as attorney fees and penalties against payment bond sureties under the Miller Act, even when state law provides for them.

In other news, the Florida 2nd District Court of Appeals made a ruling that will help glazing subcontractors in the state avoid having to pay defense costs of general contractors pursuing invalid indemnity claims. Backed by its Subcontractors Legal Defense Fund, an amicus curiae or “friend of the court” brief was submitted by ASA in the case of Barton-Malow Co. v. Grunau Company et al.

Stemming from a $9 million dollar settlement agreement between the construction team and occupants of an evacuated “sick building,” the general contractor sued the subcontractors for the legal fees it incurred following the settlement, arguing that the indemnity provision within the subcontract mandated a “duty to defend” the general contractor. 

The appellate court rejected general contractor Barton-Malow’s claim that “it was entitled to recover all its defense costs and attorney’s fees because the ‘duty to defend’ was severable from the duty to indemnify.”

“It is indeed a brighter day for subcontractors in Florida,” said ASA president Anne Bigane Wilson, CPC, PE, president of Chicago-based Bigane Paving Company. 

Mississippi Gets New Retainage Law
Mississippi Governor Ronnie Musgrove (D) has signed a law that makes major changes to the state’s retainage system, and also enhances payment protection. The law became effective July 1, and requires contractors to certify payment to subcontractors and reduce initial retainage on Mississippi public projects from 10 percent to 5 percent. On the project’s final 50 percent the retainage rate will be reduced to 2.5 percent.

“This is a great victory for the chapter and for subcontractors in Mississippi,” said Bryan Tompkins, American Subcontractors Association (ASA) chapter president. “The new law will improve both the integrity of the marketplace and the procurement process. We especially appreciate the work of our sponsor who supported us every step along the way. Our chapter is now committed to building upon this victory.”

CSI Releases Master Format™ Revisions
The Construction Specifications Institute (CSI)/Construction Specifications Canada MasterFormat™ Expansion Task Team (MFETT) has released draft three of a revised MasterFormat document, an expanded rewrite of the original document, which addresses existing topics more fully and includes heavy civil engineering projects and industrial construction. According to CSI, MasterFormat is the predominant standard in the United States for organizing the written specifications for constructing nonresidential buildings.

CSI and MFETT are looking for interested industry parties to provide comments on the latest version.

“The current 16 divisions have served the construction industry well for the last 40 years, but we simply don’t have any more room to fit new information and technologies into the current format,” said Dennis Hall, MFETT chair. “Draft three represents a MasterFormat document for the next 40 years, one that will allow the industry to maximize efficiency, minimize confusion and duplication and hold down the costs of construction well into the future.

Draft three features a new numbering system that expands the capacity of the current document. The 16-division format has been replaced with nine groupings, each capable of holding up to ten divisions. Section numbers will now have six digits in contrast to the five digits used previously. The new numbering system used throughout draft three is consistent with that used in OmniClass™.

Draft three of MasterFormat is available on the CSI website. MFETT plans to publish a fourth draft for final commentary during the late spring with the final version of the reorganized MasterFormat available in summer 2004.

The box below lists the updated groupings and divisions under consideration in draft three of the MasterFormat. 

USG