Virginia Amends VPPA to Permit Contractors to Claim Extra Work in Excess of Statutory Cap

To the benefit of public works contractors throughout the Commonwealth of Virginia, Governor McAuliffe recently approved HB 1628, amending Section 2.2-4309 of the Virginia Public Procurement Act (“VPPA”) effective July 1, 2015.

The amendment is in direct response to the U.S. Court of Appeals for the Fourth Circuit ruling last year in Carnell Construction Corp. v. Danville Redevelopment & Housing Auth., 745 F.3d 703 (2014) that the VPPA places a 25% cap upon an amount a contractor can claim for extra work when making a claim pursuant to § 2.2-4363. This ruling presented contractor’s with an unreasonable choice when directed to perform extra work in excess of the 25% cap – either perform the work and risk non-payment or refuse to perform the work and risk termination.

To remove this dilemma, the Virginia General Assembly added Subsection D to Va. Code § 2.2-4309 - the statutory cap provision - to read: “The provisions of this section shall not limit the amount a party to a public contract may claim or recover against a public body pursuant to § 2.2-4363 or any other applicable statute or regulation.  Modifications made by a political subdivision that fail to comply with this section are voidable at the discretion of the governing body, and the unauthorized approval of a modification cannot be the basis of a contractual claim as set forth in § 2.2-4363.”

Thus, effective July 1, 2015, a public works contractor will have no statutory cap apply to its claim against a public body for extra work actually performed. However, any unauthorized contract modification remains voidable by the Commonwealth, and the contractor cannot use the avoidance of the contract modification as a grounds for a claim pursuant § 2.2-4363.