Last, week, the Maryland Appellate Court decided Patriot Construction, LLC v. VK Electrical Services, LLC. The case involved a subcontract between Patriot and VKES for electrical work on an NSA project, including an important notice, pay-when-paid provision, and additional ticket work that Patriot did not authorize in writing. So the opinion raises some intersteting issues about whether a part will be bound to a contract when it makes agreements outside of the written language of a pay-when-paid contract.
Facts of Patriot Construction, LLC v. VK Electrical Services, LLC
Patriot had a contract with the Maryland Procurement Office of the National Security Agency to provide general contractor services for a project at Fort Meade in Anne Arundel County. Patriot subcontracted VKES to perform electrical work for $495,000. The subcontract stated that no changes could be made without written approval from Patriot. The subcontract also included a “pay-when-paid provision.” I’ll explain what a pay-when-paid provision is in a moment.