Lawsuits
Skanska Balfour Beatty JV Sues Surety Over Microsoft Campus Cladding Claim
Why was there a year-long wait for a claim decision?
You could call it a year-long failure to communicate, but whose failure is it? A joint venture of Skanska and Balfour Beatty is mediating a claim under a retainage bond on a Microsoft project that the contractor says surety Harco National Insurance has refused to settle.
After Skanska Balfour Beatty sued the surety in 2025, a state court judge ordered the two sides to mediate following discovery—in which evidence is gathered—and gave the parties until the end of the year to come to an agreement.
At the time the lawsuit was filed last year, the initial claim was already a year old.
Starting around 2017, Microsoft decided to build a cluster of new buildings on its Redmond, Wash., campus. Recently, Microsoft put the last five planned new buildings on hold.
But part of the overall project that was built was known as The Square. It consists of new buildings and a connecting walkway.
Skanska Balfour Beatty hired Roschmann Steel & Glass Constructions to provide custom facade and curtainwall on the buildings under a $29.9-million contract. Roschmann started work in 2020. The contract authorized Skanska Balfour Beatty to retain a portion of the payments made to Roschmann.
In 2023 Roschmann obtained a $3.47-million surety bond in lieu of retainage, which allowed the joint venture to pay Roschmann the full amounts or closer to the full amounts owed.
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But the next year the joint venture claimed Roschmann had fallen behind schedule and the work it had completed needed much fixing. So it terminated the subcontractor and notified Harco.
Roschmann filed a lawsuit in federal court in Seattle against Skanska Balfour Beatty, saying that it was owed money the joint venture refused to pay and that its problems on the contract originated with the Covid-19 pandemic and the Russia-Ukraine war. As part of a Bavaria, Germany-based company, Roschmann said its work faced extensive supply chain and labor shortages there due to the pandemic and the war.
Microsoft, too, required changes that added time and expense for Roschmann, the subcontractor said.
'Catastrophic Impacts' Cited
As a result of the disruptions and project changes, Roschmann said it suffered "direct, catastrophic impacts" to its operations and repeatedly told Skanska Balfour Beatty about its problems. Nevertheless, in February 2024, says Roschmann, Skanska Balfour Beatty denied Roschmann's claims for extra time and pay.
In its lawsuit, Roschmann stated that change orders adding to the scope of its work increased the overall contract value to $33.5 million.
Meanwhile, Skanska Balfour Beatty stated that Harco failed to respond to the claim and has been slow-walking its communication about the matter.
Harco, in reply to the joint venture's lawsuit, denies the allegations against it and says, despite the claim being a year old, the joint venture failed to provide requested documentation needed for the surety's claim investigation.
Harco, the surety states, "invited SBB to produce additional documentation for Harco’s review," but the joint venture "failed to respond or otherwise cooperate."
