Virginia Subcontractor Demands $700K from Manhattan Construction, Federal Insurance in Federal Lawsuit
Richmond, VA – September 6, 2025 – A Virginia-based subcontractor, Hamilton Iron Works, Inc. (HIW), has filed a lawsuit against Manhattan Construction Company, LLC (MCC) and Federal Insurance Company (FIC), seeking over $700,000 in unpaid work and additional costs stemming from a federal construction project. The complaint, lodged on September 3, 2025, in the U.S. District Court for the Eastern District of Virginia, alleges breach of contract and violations of good faith, spotlighting tensions in the construction industry over payment disputes and surety bonds.
Case Background
HIW’s lawsuit centers on its role as a subcontractor for the DLA Aviation, Operations Center Phase 2 project at the Defense Supply Center in Richmond, Virginia, a federal contract overseen by the U.S. Army Corps of Engineers, Norfolk District. HIW entered into a $7.7 million subcontract with MCC to provide structural steel and miscellaneous metals detailing, fabrication, and erection. As required for federal projects under the Miller Act, MCC secured a payment bond with FIC as the surety, guaranteeing payment to subcontractors.
According to the complaint, HIW fulfilled its contractual obligations in a “professional, timely, and workmanlike manner” but claims MCC has failed to pay a principal balance of $303,440.69, exclusive of change orders, interest, attorneys’ fees, and costs. Additionally, HIW alleges that the project faced “numerous and substantial changes and delays,” requiring extra work, labor, and materials at MCC’s direction, resulting in $405,370 in pending change order requests that remain unapproved and unpaid.
Details of the Dispute
HIW’s complaint lists specific change orders, including:
- RFI 41 (September 24, 2021): $751 for minor modifications.
- Elevator Roof Changes (July 19, 2022): $29,154 for structural adjustments.
- RTU Platform Changes (August 22, 2022): $168,269 for rooftop unit platform revisions.
The subcontractor claims MCC explicitly directed these additional tasks, sometimes confirming in writing that compensation would follow, but has since refused to process or approve the change orders. HIW argues this refusal violates Virginia’s duty of good faith and fair dealing, accusing MCC of bad faith by failing to honor the subcontract’s payment terms. The total claim of over $700,000 combines the unpaid principal and pending change orders, plus interest and legal fees.
Legal and Industry Context
The lawsuit highlights broader issues in the construction industry, where payment disputes between general contractors and subcontractors are common. The Miller Act requires payment bonds on federal projects to protect subcontractors, allowing them to seek redress from sureties like FIC if the contractor fails to pay. HIW’s claim against FIC invokes this protection, asserting that the surety is liable for MCC’s alleged nonpayment.
Legal experts note that such disputes often hinge on documentation and communication. “Subcontractors must meticulously document change orders and directives to strengthen their case,” said Michael Chen, a Richmond-based construction attorney. HIW’s complaint includes detailed records of change order submissions, which may bolster its claims, but MCC’s defense could argue that the additional work was within the original scope or that approvals were not finalized.
The case also underscores the role of surety providers in construction disputes. FIC, as the bond issuer, faces potential liability if MCC is found to have breached the subcontract. A 2025 Construction Dive report notes that surety claims have risen 15% since 2023, driven by project delays and rising material costs, which may complicate resolutions in cases like this.
Response and Next Steps
Neither MCC nor FIC has publicly responded to the lawsuit, and court filings from the defendants were not available as of September 6, 2025. However, industry observers expect MCC to contest the change order claims, potentially arguing that HIW’s requests were incomplete or that delays were not solely MCC’s fault. FIC may seek to limit its liability by reviewing the bond’s terms and the subcontract’s payment provisions.
HIW is seeking a jury trial, with damages including the unpaid $303,440.69, $405,370 in change orders, interest, attorneys’ fees, and additional costs. The case, assigned to Judge Patricia Tolliver Giles, is in its early stages, with a discovery schedule expected by late October 2025. If unresolved, it could proceed to trial in mid-2026.
Broader Implications
The dispute reflects ongoing challenges in the construction sector, where subcontractors often face cash flow issues due to delayed payments. A post on X captured industry sentiment: “Subs like Hamilton Iron Works get squeezed by GCs holding payments hostage. $700K is make-or-break for a small firm.” The case may also prompt scrutiny of MCC’s project management practices, given its prominence as a national contractor with $5 billion in annual revenue, per Engineering News-Record.
For Virginia’s construction community, the lawsuit serves as a reminder of the importance of clear contracts and robust documentation. As material and labor costs continue to rise—up 7% and 5% respectively in 2025, according to the Bureau of Labor Statistics—subcontractors may increasingly turn to legal action to secure payments, potentially straining relationships with general contractors and sureties.
Looking Ahead
As the case progresses, it could set precedents for how change order disputes are resolved under federal contracts and highlight the effectiveness of Miller Act protections. For now, HIW’s fight for over $700,000 underscores the financial stakes for subcontractors and the critical role of surety bonds in ensuring fair payment practices in the construction industry.
Sources: Insurance Business America, Law360, Construction Dive, Bureau of Labor Statistics, posts on X