{"id":895596,"date":"2019-03-07T13:34:54","date_gmt":"2019-03-07T20:34:54","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=895596"},"modified":"2019-03-07T13:35:02","modified_gmt":"2019-03-07T20:35:02","slug":"idle-equipment-costs-allowable-in-payment-bond-claim","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/idle-equipment-costs-allowable-in-payment-bond-claim\/","title":{"rendered":"But What About My Machines Just Sitting There? Fed Court Rules Only Some Idle Equipment Costs are Allowable in a Payment Bond Claim"},"content":{"rendered":"\n<p>Brendan Carter | <a href=\"http:\/\/abaconstructionforumdivision1.blogspot.com\/2019\/03\/but-what-about-my-machines-just-sitting.html?utm_source=feedburner&amp;utm_medium=email&amp;utm_campaign=Feed%3A+TheDisputeResolver+%28The+Dispute+Resolver%29\">The Dispute Resolver<\/a> | March 1, 2019<\/p>\n\n\n\n<p> In 2010, the United States Army Corps of Engineers (USACE) entered into an agreement with Hirani Engineering &amp; Land Surveying, PC (Hirani) for the construction of a levee wall on the National Mall to prevent the Potomac River from flooding into Downtown Washington. Hirani in turn then subcontracted out most of the work to a single firm, American Civil Construction (ACC).\u00a0\u00a0For the next two plus years, the project was plagued with delays, changes, and disputes and consequently USACE terminated Hirani in April of 2013.\u00a0\u00a0ACC then vacated the work site in the days following the termination.\u00a0\u00a0USACE made a claim on Hirani\u2019s Performance Bond and its surety Colonial Surety Company (Colonial) hired a contractor team to complete the project.<\/p>\n\n\n\n<p>ACC filed suit against Hirani and Colonial in April of 2014 in the United States District Court for the District of Columbia for $2,172,285.23 in damages, prejudgment interest, attorney&#8217;s fees, and costs.\u00a0\u00a0In turn, Colonial counter-sued in the amount of $723,049.14 for work ACC had failed to complete. The bulk of ACC\u2019s requested damages fell under at Miller Act-Payment Bond claim against Colonial for work ACC claimed was performed but not paid for by Hirani.<br><\/p>\n\n\n\n<p>In its bond suit, ACC claimed quantum meruit damages which contained $138,135.34 for costs related to idle equipment.\u00a0\u00a0ACC identified the idle equipment costs as, &#8220;the standby costs of having its owned equipment idling at the site as part of the reasonable value of ACC&#8217;s owned equipment furnished in connection with the Project.&#8221;\u00a0\u00a0ACC asserted the figure did not represent rental values or other profit opportunities the equipment could have been used for.<br><\/p>\n\n\n\n<p>The Court began its analysis by stating the Miller Act allows a contractor who &#8220;furnish[es] labor or material in carrying out work provided for in a contract&#8221; to make payment bond claim.\u00a0\u00a0The court then goes on to state that idle equipment costs \u201ccannot be viewed as an indivisible whole.\u201d The Court presented two scenarios to exemplify this.\u00a0\u00a0The first is when a contractor brings machines to a site and uses them over the course of weeks, but not every day.\u00a0\u00a0The second scenario is one in which a contractor brings equipment to a job sixty days before it is ultimately used in the execution of contract work.\u00a0\u00a0\u00a0<\/p>\n\n\n\n<p>The Court differentiated the two scenarios by stating in the first, a contractor cannot be expected to remove equipment from a work site every time it is not used so long as there are other activities that require its use, but in the second, a contractor cannot claim equipment is \u201cfurnished\u201d for \u201ccarrying out work\u201d if the equipment is not used absent a reasonable explanation.&nbsp;&nbsp;The Court drew examples from the claim pointing to a skid steer that was brought to the job site early and used throughout the course of the project, but not every day, and compared it to an excavator brought in December of 2011, used a few times in January of 2012, and then used only one more time while sitting onsite for the duration of the project.<br>In its decision, the Court examined a submitted schedule of equipment utilized and determined ACC was entitled to $38,897.62 for standby expenses for idle equipment.\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brendan Carter | The Dispute Resolver | March 1, 2019 In 2010, the United States Army Corps of Engineers (USACE) entered into an agreement with Hirani Engineering &amp; Land Surveying, PC (Hirani) for the construction of a levee wall on the National Mall to prevent the Potomac River from flooding into Downtown Washington. Hirani in&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/idle-equipment-costs-allowable-in-payment-bond-claim\/\">Continue reading <span class=\"screen-reader-text\">But What About My Machines Just Sitting There? Fed Court Rules Only Some Idle Equipment Costs are Allowable in a Payment Bond Claim<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,10752,989,10753],"class_list":["post-895596","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-idle-equipment-costs","tag-miller-act","tag-payment-bond-claim","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>But What About My Machines Just Sitting There? 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