We helped obtain a federal appropriation to fund settlement of subcontractor claims when the government failed to obtain a payment bond.
The Electronic Systems Command at Hanscom AFB, Massachusetts, awarded a $107 million contract to upgrade the radar facility at Clear AFS, Alaska. In a unique situation, the general contractor with overall responsibility for constructing the project was a second-tier subcontractor and our client, the electrical subcontractor, was a third-tier subcontractor. Our client incurred significant increased costs caused by defective specifications, constructive changes, and delay.
We anticipated that the litigation would likely be lengthy, expensive, and risky, primarily because the prime contractor had sought and obtained bankruptcy protection. At that point, none of the subcontractors seemed to have a good chance of recovery. We then began working with our client and the Alaska congressional delegation to arrange for a special appropriation to fund subcontractor settlements. That effort was successful, and an appropriation was passed and administered by a contracting officer for the U.S. Army Corps of Engineers for the express purpose of paying subcontractor claims on the project. Our client received a multimillion dollar recovery.
