Subcontractor Must Pay Nearly $8.9 Mil to Contractor for Delaying Projects

HOUSTON-In a precedent-setting case that will have contractors buzzing, US District Court Judge H. W. Head Jr. is ordering Safety Steel Service and related corporations to pay $8.87 million to Harrop Construction Co.

The award to the veteran Houston contractor includes $2.2 million in compensatory damages and $6.6 in punitive damages. Head has ruled that Safety Steel Service “failed to meet key deadlines and commitments on three major construction projects” in and around Corpus Christi, TX, in 1995 and 1996. He has faulted Safety Steel for “the admission of breach of contract, with clear evidence of misrepresentation, deceptive trade practices, and fraud.” Safety Steel is a division of CMC Steel Fabricators and its parent, Commercial Metals of Dallas.

Harrop had completed the projects – four to five months late – but the effort has put the company out of business. “Harrop expended all its resources to overcome the problems and complete the projects,” David Peden, attorney for Harrop, told GlobeSt.com. “At that point, Harrop had lost its bondability and didn’t have the capital to go on. But this award could put them back in business.”