Construction Law Toolbox : Mississippi Construction Lawyer & Attorney : Robinson Biggs Ingram Solop & Farris Law Firm : MS & Southeast Construction Law Toolbox

Approximately $354 million will be coming to Mississippi for highway usage as a result of the American Recovery and Reinvestment Act of 2009.  Of that $354 million, approximately 70% will be utilized for state projects and the remaining 30% will be allocated to other projects such as small urban projects.

The Mississippi Department of Transportation ("MDOT") expects to let approximately $120 million of the recovery money for projects at its March 24^th meeting.  The remainder of the projects will be let over the period of time from April through June.

You can view on their w a complete listing of the projects which MDOT plans to let with the recovery money.

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If you have ever been the apparent low bidder on a public construction project and had your bid rejected because of an irregularity in the bid documents, you are not alone.  What is even more frustrating, and will make you fighting mad, is when the public agency decides to waive the same irregularity of a competitor when you are the second low bidder.  Perhaps the best way to avoid this situation is to make sure that you have completed your bid in strict accordance with the instructions to bidders.  I know it is difficult to focus on all the particulars when less than an hour before the bid is to be submitted subcontractors and suppliers are sending in prices or changing the ones previously provided.  Here is a simple bid checklist that may help you avoid those last minute mistakes.

• Read the "Instruction to Bidders" when you obtain a copy of the solicitation to make sure that there are no unusual or different bid requirements. 
  • Pre-Bid Conference
  • Bid Bond
  • Site Visit
  • Listing of Subcontractors
• Prepare the bid envelope in advance, identifying (1) the project, (2) the person to whom the bid is to be submitted, (3) the location where the bid is to be submitted and (4) the date and time for the submission of the bid.  ALWAYS PLACE CERTIFICATE OF RESPONSIBILITY NUMBER ON THE OUTSIDE OF THE ENVELOPE.
• Complete the bid form and check to determine whether all the blank spaces for prices are completed with a dollar amount or a "---" or "-0-".
• Check your addition and multiplication for unit prices and total bid price.
• Acknowledge all Amendments/Addenda to the solicitation.
• List subcontractors, if required.
• Sign and date the bid documents.
• Check the bid bond, if required, to make sure that it is in the correct amount and proper form.
• Place bid documents and bid bond, if required, into envelope and submit.

In the event you are determined to be the apparent low bidder, and your bid is not more than ten percent (10%) above the amount of funds allocated for the project, it is likely that you will be awarded the contract.

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The U.S. District Court for the Southern District of Ohio has ruled that the Freedom of Information Act ("FOIA") (5 USC § 552) does not require the Department of the Air Force to release a series of emails sent by one contractor about another contractor’s eligibility to participate in an Air Force contracts program. See Tybrin Corp. vs. United States Department of the Air Force, Case No. 3:08-cv-002 (So. Dist. Ohio)(pdf).

The Air Force’s Consolidated Acquisition of Professional Services ("CAPS") program is a five-year indefinite delivery/indefinite quantity contract under which multiple contract awards can be made. Actual work and services are awarded by the Air Force through subsequent competitions among the awardees. Both Tybrin Corporation and HMRTech2 were CAPS awardees.

In May 2007, Tybrin sent emails to the Air force concerning the eligibility of HMRTech2 to receive awards for work under the CAPS program. In July 2007, the Air Force disqualified HMRTech 2 from further participation in CAPS.

HMRTech2 sought release of the emails form the Air Force, and Air Force officials had determined to release them. Tybrin filed a "reverse FOIA" suit, claiming that the "(b)(4)" exemption under the FOIA prevented disclosure of its emails, and demanding that the Air Force be enjoined from releasing them. The (b)(4) exemption exempts "trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 USC § 552(b)(4).

Tybrin’s position was that its emails were confidential and commercial. The District Court looked to the District of Columbia Circuit for guidance on whether the emails were subject to release under the FOIA. In 1992, the District of Columbia Circuit adopted the following test to determine whether information was "confidential" and therefore not subject to disclosure under FOIA:

financial or commercial information provided to the Government on a voluntary basis is "confidential" for the purpose of [the (b)(4)] exemption] if it is of a kind that would customarily not be released to the public by the person from whom it was obtained.

Critical Mass Energy Project v. Nuclear Regulatory Commission, 975 F.2d 871, 879 (D.C.Cir.1992)(en banc).

Thus, the Court considered whether Tybrin treated as confidential emails such as the ones sent to the Air Force concerning HMRTech2. The District Court determined that because Tybrin did not release them to the general public and controlled distribution of them even within Tybrin, the emails were treated by Tybrin as confidential.

Tybrin also argued that its emails were "commercial" because it had a "commercial interest" in them. Some courts have held that if the information submitted by an entity does not reveal anything about the nature, character, finances, revenues, or other business information the release of which would hurt the submitter, it is not "commercial" information protected from disclosure. However, again following a District of Columbia Circuit decision, the District Court in Ohio determined that Tybrin had a "commercial interest" in the emails concerning HMRTech 2’s eligibility to participate in CAPS. The Air Force was prohibited from releasing the emails it received from Tybrin.

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In these difficult economic times, an Owner and/or Contractor may be tempted not to make full and final payment after the work is complete and there is beneficial use and occupancy of the facility. The Owner and/or Contractor may justify this conduct even though there is not currently a problem with the work because there "may" be unanticipated future problems with that will need to be addressed. However, withholding payment for potential defects or warranty issues could turn out not to be a wise decision.

An Owner and/or Contractor’s "belief" that it may have warranty claims sometime in the future may be insufficient to justify withholding of final payment as explained by the Mississippi Supreme Court in Crawford Commercial Constructors, Inc. v. Marine Industrial Residential Insulation, Inc., 437 So.2d 15 (Miss. 1983). In that case, a subcontractor sued the general contractor for payment under a roofing contract. The general contractor had refused to pay the subcontractor on the basis that it "believed the roof was improperly installed, so that [the general contractor] will ultimately be required to repair it to satisfy the building’s owner." Id. The Court ruled that the general contractor’s "beliefs" were conjectural. Id. at 16. In affirming the trial court’s decision in favor of the subcontractor, the Mississippi Supreme Court stated:

Under our authorities there must be a present, existent actionable title or interest which must be completed at the time the cause of action is filed. (citations omitted). A mere inchoate right is not sufficient and neither is a prospective danger of injury. (citations omitted)…"It is certainly an undisputable and invariable rule of law that a right of action must be complete when an action therefore is commenced…."…"we consider it to be the well-settled, general rule, that the facts which constitute the ground of a suit must exist at the time the suit is instituted…"

Id. at 16.

In addition to this jurisprudence, Mississippi has enacted what are generally known as "Prompt Payment Statutes" for both public and private construction contracts. Both of these statutes require timely final payment once the contract has been determined to be substantially complete or there has been beneficial use and occupancy. There are also "Late Payment Interest Statutes" which apply when a contractor fails to make payment "without reasonable cause" to its lower tier subcontractors or suppliers within fifteen (15) days after receipt of payment.

There is no provision for recovery of attorneys’ fees in either the "Prompt Payment Statutes" or the "Late Payment Interest Statutes." Contractors therefore need to ensure the issue of attorneys’ fees associated with collection efforts are adequately addressed in their contract documents.

You can expect this case law and these statutes to be cited frequently in payment disputes during these difficult economic times.

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