Several AGC members traveled recently to Olympia to testify in support of legislation to address onerous notice requirements precipitated by the Mike M. Johnson Supreme Court decision.
In photo, L-R, Tamarah Knapp Hancock (Scarsella Bros.), Bob Marconi (Ashbaugh Beal), Glyn Slattery (Lydig) and Brett Hill (Ahlers and Cressman) testify at a legislative hearing in support of AGC’s bill to address the Mike M. Johnson case. Mike Pellitteri (PELLCO) also testified in Olympia.
A second hearing, this one in the Senate Commerce and Labor Committee, is scheduled for Feb. 14.
AGC members made the point that, historically, compensation for changes to a construction contract was based on fairness and merit. If circumstance changed on a complex project, a fair and equitable price adjustment to owners and contractors alike were worked out, with the focus on the merits of the effect the change had on the project. Since the Mike M. Johnson decision, the merits of a claim can take a back seat to the technical procedures of how a contractor’s claim is made. Miss a notice deadline – even if circumstances of the change make it impossible to meet the deadline – and the contractor’s claim can be ignored.
In the Mike M Johnson case, the State Supreme Court said that contractors must strictly comply with contractual notice and claim provisions to preserve claim rights even if the owner knew of the unforeseen event, gave a go-ahead on the extra work and observed the work being done! Because of Johnson, owners and contractors are pitted against each other, with contractors creating mounds of paperwork in an attempt to preserve their right to obtain compensation. If a contractor fails to do so, a trial court is no longer allowed to examine the facts of the claim; it must dismiss it, even if the owner was aware of the changed circumstance and approved the extra work.
AGC is part of a coalition pushing HB 1574, sponsored by Rep. Jay Rodne (R-5) and cosponsored by Rep. Christine Kilduff (D-28). The bill seeks to place responsibility for the cost of changes where it fairly belongs. The merits of the case should determine that responsibility, not onerous and unreasonable technical requirements that are often impossible to comply with. HB 1574 would allow contractors to be compensated for unanticipated changes and those requested and approved by owners even if the contractors do not follow burdensome notice and/or claim-related documentation provisions to the letter unless the owner can show material prejudice as a result of the contractor’s noncompliance.
An identical bill was recently introduced in the Senate, sponsored by Sen. Sharon Brown (R-8) and cosponsored by Sen. Mike Padden (R-4) and Sen. Dean Takko (D-19).
Other groups joining AGC in support of the legislation include Inland Northwest AGC, NUCA, MCA, NECA, Minority Business Advisory Committee, ABC, SMACNA, Building Trades, Operating Engineers, WAPA and BIAW.
For more information, contact AGC Chief Lobbyist Jerry VanderWood, 360.352.5000.