VB CGC Practice Group

VB CGC Practice Group
Vandeventer Black's Construction and Government Contracts Practice Group focuses on serving our business clients in the construction industry. We currently have offices in Norfolk and Richmond, VA, the OBX and Raleigh, NC, and Hamburg, Germany. For more information about Vandeventer Black, clink on the VB logo.

Monday, November 14, 2011

Internet Name Protection: Avoiding branding with the next XXX website

Ever think you're company's name would get branded with a XXX website? Take a look at this article by my collegues Marshall Martin and Jane Tucker to see why this is something you need to deal with now:


Friday, November 11, 2011

Contractor and Surety have to pay twice? Not so fast says Judge Hilton

One of the generally accepted differences between a payment bond claim and a mechanic's lien claim is that lien claims can be extinguished by payment up the chain, whereas a payment bond principal (usually the prime contractor) or surety cannot rely upon payment as a defense and so can end up having to pay twice for the same debt. They typically occurs when the prime has paid a subcontractor, but the subcontractor did not use the monies to pay someone of lower tier. Virginia law typically cuts off the lower tier's lien rights, but it has been generally accepted that if there was a payment bond the lower tier could still recover under that.

In his recent "slip" opinion in U.S. ex rel. Capital Building Supply, Inc. v. Clark Realty, LLC, Civil Action No. 1:10-CV06 (E.D.Va., Alexandria Division), 2010 WL 3767853 (Sept. 15, 2010), Judge Hilton concluded differently; finding that neither the payment bond in that case nor equity principles permitted a result of a prime contractor having to pay twice for the same debt. In that case, the prime had paid for materials and obtained lien waivers and releases from its subcontractor in exchange for payent, but the subcontractor never paid its lower tier supplier who then sought recovery under the prime contractor's payment bond. Judge Hilton reasoned that since the supplier could not have obtained a mechanic's lien, and the purpose of the payment bond was to substitute for a mechanic's lien on a public job, the supplier correspondingly had not right to claim under the payment bond.

Whether Judge Hilton's decision will be followed by other judges/courts remains to be seen, but it's a real winner for payment bond principals and surety, and a real scare for bond claimants.

Tuesday, November 8, 2011

Virginia Little Miller Act Payment Bond Claim Notice Reduced to 90 days

Effective July 1, 2011, the time for a lower tier payment bond claimant to provide claim notice under Virginia's Little Miller Act, Virginia Code Section 2.2-4341, was reduced from 180 days to 90 days. This clearly applies to bonds written after July 1, 2011, but leaves the question of application to bonds written prior to July 1, 2011. Left unanswered in the statute is whether the 90 day rule will be applied to pre-July 1, 2011 bonds but for which the 90 days has not yet expired. It seems unlikely the courts will apply the statute so as to de-vest a claimant who was within the 90 to 180 day period as of July 1, 2011 since the general rule in Virginia is to not construe statutes so as to alter vested rights. The question is harder for claimants who knew (or are presumed to know) of the statutory reduction before their rights expired, and how the courts will treat them, so expect to see ongoing litigation, and likely differing circuit court decisions, on this until either the Supreme Court decides the question, or the code is further amended.

Thursday, November 3, 2011

New Set Aside Rule for Multiple Award TO/DOs for Small Businesses

A new rule now authorized federal agencies to set aside task and delivery orders placed against multiple award contracts.  The new rule also allows agencies to reserve for small businesses one or more multiple award contracts, as well as parts of those orders.  The new rule further directs contracting officers to modify multiple award contracts that have been in effect for at least six months and that haven not had substantial amounts of work done or orders remaining to allow for the set asides. The rule was issued on an interim basis to meet the one year deadline in the Small Business Jobs Act, Section 1331, which was signed last year. The SBA is currently drafting a proposed rule with additional details on implementation.  Here's a link to the interim rule: