Actual Damages Provision in Subcontractor Trade Contracts on Missouri Innovation Campus Project, Lee’s Summit, MO

I am writing on behalf of the National Association of Surety Bond Producers (NASBP), a national trade association of member companies employing surety bond producers, including licensed resident and nonresident producers placing bonds for construction and infrastructure projects in the State of Missouri and all other jurisdictions. It has just come to our attention that Lee’s Summit School District (District) has incorporated actual damages, rather than liquidated damages or an actual damages cap, into all of the subcontractor trade contracts for the new Missouri Innovation Campus project (Project). This incorporation of actual damages into all the subcontractor trade contracts has prompted us to express our concern to you that the impact will likely lessen the competition, increase the pricing, and diminish small and disadvantaged construction firm participation on the Project.

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