Federal Court Clarifies When Idle Equipment Costs Are Recoverable Under the Miller Act

United States ex rel. Am. Civ. Constr., LLC v. Hirani Eng’g & Land Surveying, P.C., 2018 U.S. Dist. LEXIS 200829 (D.D.C. Nov 28, 2018).

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R. Zachary Torres-Fowler

The case involved the construction of a levee wall on the National Mall in Washington, D.C.  In September 2010, the Army Corps of Engineers awarded Hirani Engineering & Land Surveying, P.C. (“Hirani”) the prime contract for the project.  Hirani’s surety was Colonial Surety Company (“Colonial”).  Hirani subcontracted the majority of the work to American Civil Construction, LLC (“ACC”).  Following a series of disputes and project delays, the Army Corps terminated Hirani.  ACC then filed suit in the United States District Court for the District of Columbia seeking over $2 million in damages under the Miller Act as well as state law for breach of contract.  After a bench trial, the court entered judgment in favor of ACC.

As part of its claim, ACC sought damages for costs related to idle equipment at the project site.  Although the claim was only a small part of ACC’s overall claim, the court’s approach was noteworthy.  ACC asserted that all of the costs were recoverable under the Miller Act.  Conversely, Hirani and Colonial argued that standby equipment expenses were per se unavailable under the Act.  The court disagreed with both parties and held that, although the Miller Act permitted a contractor to recover for idle equipment, it could not do so in all instances. Continue reading “Federal Court Clarifies When Idle Equipment Costs Are Recoverable Under the Miller Act”