Our client, a general contractor on a large federal project in Texas, faced a multi-million dollar claim brought by a subcontractor under the Miller Act. The subcontractor alleged various impacts and delays for which it blamed our client. After moving to arbitrate the lawsuit in lieu of litigating it in federal court, we quickly attacked the subcontractor’s claims in two material ways. First, we pieced together job cost reports and other data to establish that the subcontractor had actually earned a profit from its work on the project, contrary to its allegations of a huge loss.

Next, we utilized waiver language contained in various change orders that effectively barred the subcontractor from recovering lost productivity and delay damages from impacts addressed in part by those change orders. Even though the subcontractor had intended for those change orders to cover only direct costs (not delay damages or lost productivity), the waiver language included in the change orders stated otherwise. Such language is enforceable under the Federal Circuit’s opinion in Bell BCI v. U.S., 570 F.3d 1337 (Fed. Cir. 2009).  However, before attempting to enforce the waivers, we schedule a Rule 30(b)(6) deposition of the subcontractor.  Our 30(b)(6) deposition of the subcontractor’s corporate representative established that over 80 percent of the impacts at issue were covered in part by change orders. That information, in conjunction with applicable law and the waiver language included in the change orders, reduced the subcontractor’s claim considerably.

Our efforts effectively decimated the subcontractor’s claims, and we ultimately settled the matter for less than 2 percent of the Subcontractor’s original claim.