United States Ex Rel. D'Ambra Construction Co. v. St. Paul Mercury Insurance
24 F. Supp. 2d 218 | District Court, D. Rhode Island | 1998
What This Case Means for Subcontractors
D'Ambra Construction, a subcontractor on a Navy project, sued the general contractor and surety for unpaid work after the government terminated the contract for convenience. The court ruled that the subcontractor could only recover amounts the federal government actually approved and paid—not the full value of work performed. This means government approval limits your recovery, even if you did more work than paid.
Key Takeaways
- •Your recovery is capped at what the government approves in writing, regardless of actual work completed or contract price
- •Termination for convenience clauses in federal contracts give the government broad power to end work and limit your payment claims
- •Flow-down clauses from prime to subcontract mean government contract terms bind you directly—review these before signing
- •Get written government approval for all change orders and extra work immediately; undocumented work may be unrecoverable
North American is liable to a subcontractor only to the extent of payments made by the federal government.
Frequently Asked Question
Can I get paid for all the work I did if the government terminates the contract early?
No. Courts will limit your recovery to amounts the federal government officially approved and authorized, even if you performed additional work beyond that. This is why you must get written government approval for all changes and extra work before performing it. Without documented approval, you may lose payment for legitimate work.
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