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Department of General Services Conducts “Town Hall” on Statute of Limitations Bill

The 2019 General Assembly bill, supported by the Hirschler Construction Law Team, that would have created a five-year statute of limitations on public projects, hit a roadblock during the 2019 Session when the House Appropriations Committee requested that the Department of General Services (DGS) conduct a study of the bill over the summer and fall of this year. After considering the findings of a recent survey and series of town hall meetings, the DGS is expected to issue a report with its recommendations by December 31, 2019. 

Hirschler Construction Law Team Provides Supporting Testimony During Bill Review Process

Currently, there is no statute of limitations applicable to state agencies on public jobs. A 2019 House bill would have created a five-year limitation period on public projects, the same limitation period applicable to private projects. In February, the bill was unanimously passed out of the Senate Finance Committee and on the Senate Floor. It then moved to the House of Delegates for consideration where the House Courts of Justice Committee passed the bill after hearing supporting testimony from our team. Ultimately, the bill stalled when the House Appropriations Committee requested that the Department of General Services (DGS) conduct a study of the bill over the summer and fall.

DGS Steps In with Online Survey and Town Halls Targeting Virginia Construction Industry

In August, DGS conducted an online survey of Virginia construction industry members and stakeholders regarding their experiences with the essentially unlimited limitations period that the Commonwealth enjoys on state jobs. Last month, DGS conducted a series of “town hall” meetings for stakeholders moderated by DGS Director Joe Damico. These meetings were well-attended by a cross-section of Virginia construction industry professionals, including numerous representatives of the Associated General Contractors (AGC) and our team.

Results of the DGS Survey Show Majority of Owner-Initiated Claims Made Within 5 Years

Interestingly, the DGS survey data suggested that the vast majority of owner-initiated claims on state jobs are already being brought within the “normal” five-year statutory period. Beginning in Year-7 after substantial completion, owner-claims start to decline, there are “some” owner claims between Year-7 and Year-9, and very few claims beginning in Year-10 and beyond. This suggests that a limitation period applicable to the Commonwealth of somewhere between five and ten years is empirically supportable and makes practical sense.

Hirschler Construction Law Team Reiterates Support of Common-Sense Statute of Limitations

At the October 3, 2019 DGS Town Hall, we spoke in support of the five-year limitation period that was contained in the 2019 House Bill. Representatives from AGC and other construction industry groups echoed our argument for a common-sense statute of limitations, which we believe will result in a more competitive and efficient public procurement process and will level the playing field for Virginia contractors.

The DGS team listened carefully to these arguments. Our perception as we left the meeting was that DGS may be open to considering and recommending a finite limitation period, although not necessarily the five-year limitation period that we support. 

DGS’s report to the Governor and to the Chairs of the House Appropriations and Senate Finance Committees is due December 31, 2019. Stay tuned for our analysis of that report.

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