Volume 36, Number 8, August 2001


ASA Says that Without Addendum, AGC Form May Short Subcontractors

The contractual requirement of an “additional insured” endorsement on the subcontractor’s commercial general liability (CGL) insurance policy may pose a financial threat to glazing contractors, according to the American Subcontractors Association (ASA). ASA says this endorsement on the subcontractor’s CGL policy puts the sub at risk of responding to numerous claims for losses that it did not cause. 

ASA’s latest contract document, the Addendum to AGC 603 (2000) Standard Short Form Agreement Between Contractor and Subcontractor, attempts to rectify the “additional insured” requirement and other shortcomings that ASA has identified in the American General Contractors of America (AGC) form 603.

“Subcontractors should not sell themselves short of basic rights like the right to know what documents are incorporated by reference into subcontracts,” said Richard Kohls, ASA president and vice president of finance for the Cincinnati-based Fenton Rigging Co. “ASA volunteers closely examined the AGC 603 and created an addendum that makes necessary changes. ASA’s addendum restores subcontractors rights in a common-sense fashion that any reasonable subcontractor-general contractor team could endorse,” he added.

The addendum does the following:
• Requires documents incorporated by reference into the subcontract agreement to be furnished to, or explicitly agreed to in writing, by the subcontractor;
• Bars the general contractor from requiring the subcontractor to obtain an “additional insured” insurance endorsement, and from requiring a waiver of subrogation against the contractor for claims covered by the subcontractor’s workers’ compensation or general liability insurance;
• Allows the subcontractor to make claims for changes and extra work when they are caused or requested by another party;
•  Modifies the subcontract agreement to say final payment  does not waive claims that are not yet settled;
•  Limits the subcontractor's indemnity to "extend only to that part or proportion of any bodily injury or property damage, loss or defect caused by the negligence or intentional act of subcontractor, or such other party for whose acts subcontractor is legally liable, during performance of subcontract work."

Company                                                                                            Sales Volume (in millions)
1. Gensler                                                                                                                     $260.4
2. HOK Group Inc.                                                                                                        109.7
3. Skidmore, Owings & Merrill LLP                                                                               103.7
4. AECOM Technology Corp.                                                                                         95.8
5. HKS Inc.                                                                                                                     56.2
6. Carlson                                                                                                                        51.3
7. Heery International                                                                                                       47.7
8. Parsons Brinckerhoff Inc.                                                                                             39.3
9. NBBJ                                                                                                                          36.3
10. The Ellerbe Becket Co.                                                                                              29.8
11. Kohn Pederson Fox Associates PC                                                                            26.0
12. Hiller                                                                                                                          26.0
13. HDR                                                                                                                          25.9
14. Professional Service Industries Inc.                                                                             22.8
15. Swanke Hayden Connell Architects                                                                            22.5
16. RTKL Associates                                                                                                      21.3
17. Perkins & Will                                                                                                           21.2
18. A. Epstein and Sons International Inc.                                                                        19.9
19. The Thornton-Tomasetti Group Inc.                                                                           19.3
20. Flack + Kurtz Inc.                                                                                                     18.0
21. ATC Associates Inc.                                                                                                 18.0
22. WorkPlaceUSA                                                                                                        18.0
23. Callison Architecture Inc.                                                                                           17.4
24. Thompson, Ventulett, Stainback & Associates Inc.                                                     17.2
25. CUH2A Inc.                                                                                                              15.6

If you’re wondering which commercial office construction contractors were top-of-the-line in 2000, the June 2001 Engineering News Record (ENR) Sourcebook has compiled a list of its top 25. The information is based on 2000 supplemental market revenue data provided by participating industry firms on ENR’s Sourcebook market survey. The 25 highest-ranking companies are listed at left, with earnings listed in 

Oregon Court Rules Engineering Company Not Responsible For Sub's Safety

An Oregon court sided with the engineering firm CH2M Hill in a case brought on by an injured subcontractor.
CH2M Hill was hired to perform an environmental investigation at a plant in Troutdale, Ore., and subcontracted with Stratus Corp. to construct a vehicle decontamination pad at the site. The contract signed by Stratus stated it would work as an independent contractor, and made the firm responsible for safety.

E. Max Woodbury II, who was working for Stratus as a temporary employee, fell from a platform when he lost his balance and was injured. He then sued CH2M Hill claiming it had violated the Oregon Employer Liability Act by 
not complying with various safety regulations.

When a jury ruled in Woodbury’s favor, CH2M Hill appealed to the Oregon Court of Appeals, arguing it was not liable because it was not Woodbury’s employer; Woodbury claimed CH2M Hill was his “indirect” employer since it controlled Stratus’ work. The court, however, disagreed and ruled with CH2M Hill, stating there was no evidence the firm retained control over the work.


Court Ruling May Mean Subcontractors Must Impose Warnings

In a case that could have implications for the glass industry, subcontractors using specified materials could have to begin imposing certain warnings if a recent Federal court sets precedent. 

The case begins with the 1998 death of Deborah Engelhardt who died in a car accident when her vehicle hydroplaned and collided with another car. Under a contract with the Arkansas State Highway and Transportation Department, paving contractors Rogers Group Inc. had resurfaced the road where the accident occurred. 

Administers of Engelhardt’s estate filed suit against Rogers, claiming negligence in using the wrong asphalt mix and failing to warn drivers and the Highway Department. They also argued that Rogers was liable for supplying an unreasonably dangerous product. Rogers claimed that since its workers had used the asphalt mix specified by the highway department—Type III—it was protected by the “acquired immunity doctrine.”

According to the U.S. District Court for the Eastern District of Arkansas, Type III asphalt does sometimes cause hydroplaning in heavy rains and is meant for use in potholes, parking lots, low-volume roads and overlays. The court ruled since Rogers' contract did not require it to do anything after the resurfacing was complete, it had no duty to warn the public of any potential danger.

However, the court did allow the Englehardt estate to proceed with its negligence claim. The court said that although Rogers used the asphalt specified, the "acquired immunity doctrine" did not protect it if it knew prior to signing the contract, as the estate claimed, that Type III sometimes caused hydroplaning in heavily traveled highways.  


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