State Responsible for Steel Delays

Kegler Brown Construction Newsletter

Recently contractors and subcontractors have encountered delays in receiving domestic steel or other construction materials from suppliers.

In the case of Carter Steel v. ODOT, Judge Leach of the Court of Claims addressed an issue of first impression — whether liquidated damages could be assessed by the State against a Contractor for steel delays when the cause of the delay was a supplier who was apparently the sole domestic supplier of the steel necessary for the project.

The Court noted that while a contractor is generally responsible for the shortcomings of its subcontractors and suppliers, there is an exception where the owner specifically requests that the contractor use a particular subcontractor or supplier or a "single source" of those materials. In this case as the non-performing supplier was the sole supplier of domestic steel available during this time frame to handle the project the Court found that a time extension should have been granted, because the cause of the delay was beyond the reasonable control of the contractor.

This case may give subcontractors and contractors an additional basis for a time extension and additional compensation when a "single source" supplier cannot deliver on time.