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New Laws Affecting Construction: Part II

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Authored by James Harvey

Last time we reviewed recent new laws impacting the validity of mechanic’s lien and bond waivers for subcontractors and suppliers before work is performed. This week, we take a look at the new law intended to correct a court decision that would have prohibited any contractor on a public procurement from even submitting a claim that exceeded 25% of the original contract value. The Public Procurement Act requires that for any contract modification or series of modifications that exceed 25% of the amount of the contract, or $50,000, whichever is greater, that approval must be made by the public body or the governor’s designee. HB 1628 was passed to clarify that this statute does not limit the amount a party may claim or recover against the public body through the Virginia Public Procurement Act’s claims and disputes process. While this change is a positive development for contractors, all should be aware that the contracting officer, purchasing department or public works manager may not have the authority to enter into any change order that exceeds 25% of the contract value. If the contractor proceeds, it does so at its own risk that the modification can be declared invalid.

Should you find yourself in a contract with an excessive amount of change orders, contact Vandeventer Black LLP to protect your rights.

READ: PART IPART III

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