United States ex rel. Kitchens to Go v. John C. Grimberg Co.
283 F. Supp. 3d 476 | District Court, E.D. Virginia | 2017
What This Case Means for Subcontractors
A subcontractor sued a prime contractor and its surety for payment of delay costs on a federal Navy project. The surety tried to use a no-damages-for-delay clause in the subcontract to avoid paying the delay costs. The court ruled that the Miller Act (which protects subcontractors on federal projects) overrides no-damages-for-delay clauses, meaning sureties cannot use them to block delay damage claims. This protects subcontractors from losing delay compensation on federal jobs, even if the subcontract says otherwise.
Key Takeaways
- •No-damages-for-delay clauses in subcontracts cannot limit a surety's liability under the Miller Act on federal projects—the federal law wins
- •Dispute resolution clauses requiring you to wait for owner-contractor disputes before suing do not block your Miller Act claim against the surety
- •Document all delay costs carefully; the surety cannot escape liability by claiming the amount is unclear or needs more discovery
The Miller Act trumps conflicting suretyship principles such that a surety can only enforce contract terms to limit its Miller Act liability if those terms are consistent with the Act.
Frequently Asked Question
Can a surety use a no-damages-for-delay clause to avoid paying me for project delays on a federal job?
No. The Miller Act protects subcontractors on federal projects and overrides no-damages-for-delay clauses in subcontracts. Even if your subcontract says you cannot claim delay damages, you can still recover them from the surety under the Miller Act. The federal law takes priority over contract language that would eliminate your delay compensation rights.
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