Court of Claims Referee Finds No Need for State to Provide “5/15 day” Notice
Kegler Brown Construction Newsletter July 10, 2014
Public owners in Ohio are generally required to send non-performing contractors five (5) days' notice, and if the contractor fails to comply within fifteen (15) days, then the owner is free to hire a takeover contractor to complete the work. R.C. §153.17. In a case where the Referee found the roofing contractor on an OSFC school construction project "repudiated" the contract by walking off the job in a dispute over billing for stored materials, the Referee has ruled that "the version of §153.17 that was in effect when the five-day notice was given, and when this lawsuit was filed did not apply to actions by school boards."
This meant that the state (in the form of the OSFC who administers these contracts for local school boards) was not required to give the "5/15" day notice referenced in R.C. §153.17 before hiring a replacement contractor to complete or correct the original contractor's work. But the Referee hinted that a 2012 amendment to R.C. §153.17 substituting the "Ohio Facilities Construction Commission" for "Department of Administrative Services" might lead to a different result if this circumstance would occur today.
This case again reminds us of the perils that occur when a contractor walks off the job during a dispute, and that the state is typically better at complaining about a lack of timely notice by contractors, than providing timely notice itself before it "backcharges" a contractor and its surety. T&F Systems, Inc. v. OSFC, Case No. 2010-10572 (decision May 20, 2014).