Woolford Kanfer recently represented a mechanical subcontractor at an arbitration involving project for the US Navy. The GC withheld over $200,000 from the sub after back charging it for the cost to provide temporary heat to a warehouse at the “Navy Depot” facility in Mechanicsburg. The sub’s proposal, which was attached to the subcontract as an exhibit, excluded temporary heat. The sub’s scope of work included furnishing and installing two warm air furnaces to heat the warehouse. The schedule called for installation of the warm air furnaces in time for the 2021-2022 heating season. The furnace manufacturer was a victim of a ransomware attack in the Fall of 2021, which disrupted its manufacturing processes for weeks and it was unable to deliver the furnaces until 2022. The GC demanded that the sub provide temporary heat to the building in November 2021 since the warm air furnaces were delayed due to the ransomware attack. Our client, the HVAC sub, refused citing the temporary heat exclusion and we wrote letters telling the GC that the temporary heat was excluded and that our client would not be providing temporary heat. The GC nevertheless insisted that our client was on the hook for the cost of delays and argued that the temporary heat costs were a delay expense for which the sub was responsible. The GC also accused our sub client of delaying the submittals for the warm air furnaces and argued that had the sub been more diligent with submittals, the furnaces would have been ordered and arrived before the ransomware attack occurred. The sub pointed to delays by the general contractor during the submittal process. The arbitrator issued a lengthy, well-reasoned decision rejecting the GC’s arguments and ordering the GC to pay our client its contract balance, along with interest.