How will the Fairness in Construction Contracting Act be construed in view of Dugan & Meyers?
Kegler Brown Construction Newsletter July 1, 2007
Contractors are gravely concerned with the perceived erosion of the Spearin doctrine in the Dugan & Meyers case, while owners are applauding their perceived relief from “delay claims.” However, the precedential value of this case may be limited by the application of O.R.C. §4113.62(C)(1) [part of the Fairness in Construction Contracting Act enacted in 1998], which provides that any contract provision is void and unenforceable “when the cause of the delay is a proximate result of the owner’s act or failure to act.” It remains to be seen whether the courts will construe this statute narrowly or broadly.
Contractors will be arguing that “delay” under O.R.C. §4113.62(C)(1) also includes claims for acceleration, inefficiency and other impacts. Meanwhile, owners will be arguing that “delay” means only time-based claims for working beyond the contract completion date, and does not include acceleration, inefficiency or other impacts within the contract period.
The outcome of that debate will largely influence whether contractors will be limited to only recovering delay damages (such as extended general conditions) as opposed to labor inefficiency losses arising from acceleration, out of sequence and other impact claims.
In any event, contractors will need to seek a time extension under the State’s contract documents to stay in the hunt for additional compensation on a time-based delay or impact claim.