Email Promise May Have Extended Subcontract Scope---and Miller Act Timeline

Tuesday, April 03, 2018 9:07 am
April 2018 - Volume 40 Number 4

Change Order --- Miller Act

Belonger Corp. v. BW Contr. Servs., 2018 U.S. Dist. Lexis 17405 (E.D. Wis. Feb. 1, 2018)

A contractor failed to prove its subcontractor was acting under the terms of a new contract, rather than the expanded scope of the original subcontract, when performing requested repairs. And that meant the sub’s Miller Act claim was not necessarily time barred.

The U.S. Department of Veterans Affairs (VA) hired BW Contracting Services (BW) to construct a medical center in Milwaukee. In turn, BW hired Belonger Corporation, Inc. (Belonger) as a subcontractor to perform heating, ventilation, and air conditioning (HVAC); plumbing; and medical gas work on the project.

After completing its work under two subcontracts, Belonger submitted final invoices to BW in February 2016. The "balance to finish" on each invoice was "$0." BW "neither paid nor approved" these invoices.

In May 2016, BW learned that a plumbing line installed by Belonger needed repair due to work done by another sub. After learning of the issue, Belonger’s president emailed BW’s project manager, agreeing to take care of the repairs. The one stipulation Belonger made was that BW had to agree to issue a change order for the work. The project manager agreed and instructed Belonger to "proceed with the repair work on a T&M [time and materials] basis." Belonger completed the repairs[..]