The Virginia Department of General Services has issued its General Assembly-mandated report on current Virginia law regarding state construction contracts and the freedom that the Commonwealth currently enjoys from any statutory time limitation on the state’s ability to bring claims against its contractors.
While private owners must bring claims for allegedly defective construction work within a five-year limitation period, there are no such constraints applied to the Commonwealth of Virginia’s ability to bring claims. The Commonwealth could bring a claim against a contractor (or a design professional) ten, fifteen, or twenty years or more after substantial completion. We’ve written about this topic previously here, here and here.
A 2019 General Assembly bill, supported by testimony from the Hirschler Construction Team before the House Courts of Justice Committee, would have created a five-year statute of limitations on public projects. That bill hit a roadblock, however, when the House Appropriations Committee requested that the Department of General Services (DGS) conduct a study of the bill and issue a report of its findings, including a recommendation regarding whether the State should adopt a statutory limitations period applicable to public projects. An online survey and a series of DGS-sponsored town hall meetings took place last summer and fall, with DGS collecting data and opinions from Virginia construction industry members and stakeholders. The Hirschler Construction Team participated in both the survey and the town halls. We were encouraged by DGS’s apparent receptiveness to the construction industry’s arguments in favor of a statute of limitations of five years. Based on statements DGS made at the town halls, we believed that DGS was in favor of some limitations period, the only remaining issue being whether the time period would be five, seven, ten, or some other number of years.
DGS, however, issued its report last month recommending that a change to Virginia law was not needed. DGS arrived at this conclusion despite finding that: (1) over half of all other states have some time limitation on state claims; (2) most design professionals believe that a statutory period applicable to the state would not result in the need for extended warranties on construction work; (3) most contractors, design professionals, and public bodies believe that overall costs on state construction projects would decrease if Virginia adopted a statute of limitations applicable to the Commonwealth; and (4) the impact of a single claim on an individual contractor or design professional could be “significant” (such claims could be devastating in the view of the Hirschler Team – see our prior discussion of the Hensel Phelps case.
Instead, DGS asserted that creating a statute of limitations would incentivize state agencies to file claims rather than pursue informal resolutions. DGS also seemed to rely on contractor registration data suggesting that the absence of an SOL is not impacting the number of contractors willing to bid state work. This overlooks the fact that, while contractors are still bidding state work, the prices that state taxpayers are paying for their public projects may be higher as a result of current state law.
We are encouraged, however, by two companion bills that have been introduced in this year’s Session, on the House and Senate side respectively, that would create a public project statute of limitations in the Commonwealth. Our optimism is tempered somewhat, however, by the knowledge that legislators will be considering these bills through the lens of the DGS report. We are tracking the progress of these two bills and will keep you updated in the weeks to come. In the meantime, we welcome your thoughts, comments, and questions about this important issue.
As president of Hirschler and head of the firm's litigation section, Courtney knows how to lead people and projects to a successful outcome.
Leveraging deep experience in the construction industry, Courtney advises public and ...
Liz combines enthusiasm and diligence to help her clients resolve complex disputes. Whether the dispute is a construction claim, a breach of contract, or a business tort, Liz brings focus and determination to every case. Liz has ...
Kelly’s practice focuses on construction law, commercial and product liability law, with an emphasis on dispute resolution—including mediation, arbitration, jury and bench trials in state and federal court. She routinely ...
Nate fully engages in each case and shoulders his clients’ needs. Communication, efficiency and careful judgment define his practice. In every case, he investigates competing claims to thoroughly understand their strengths ...
A professional engineer (P.E.) and an experienced lawyer, Webb began practicing at Hirschler Fleischer following four years of work as a consulting engineer. His multidisciplinary practice focuses on general business and ...
SubscribeSubscribe to Hirschler by Email
- Kelly Bundy and Liz Burneson Discuss Tips for Subcontractors faced with Pay-if-Paid Provisions in Contractor Magazine
- General Assembly Has Killed Right to Work Repeal Bills
- Virginia Statute of Limitations Bill Advances Through General Assembly
- House Subcommittee Passes Bill Establishing Limitations Period Against The Commonwealth
- Are You a Joint Employer? The DOL’s New Test Helps Answer That Question
- Virginia Department of General Services Issues Final report on Statute of Limitations Exemption for State Construction Contracts
- Right to Work Laws and What a Potential Repeal Could Mean
- Construction Year in Review: 2019 Trends and What to Expect in 2020
- Department of General Services Conducts “Town Hall” on Statute of Limitations Bill
- New Virginia Supreme Court Case Refocuses Attention on Commonwealth's Immunity from Statutes of Limitation
- Workforce Development
- Dispute Resolution
- Government Contracts
- Little Miller Act
- Miller Act
- Mechanic's Liens
- Occupational Safety and Health Act (OSHA)
- Department of Professional and Occupational Regulation (DPOR)
- Virginia Employment Commission (VEC)
- Virginia Workers' Compensation Commission
- Uniform Statewide Building Code
- Change Orders
- February 2020
- January 2020
- November 2019
- August 2019
- June 2019
- April 2019
- February 2019
- January 2019
- December 2018
- October 2018
- September 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- November 2017
- October 2017
- September 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016