A federal judge on Tuesday cleared construction on the White House ballroom project to move forward, according to multiple sources, but construction attorneys say the ruling does little to reduce risk for the contractors tasked with building it.
The National Trust for Historic Preservation sued the Trump administration earlier this month to stop its ballroom construction project, which is now pegged at $400 million, double the initial estimate of $200 million, according to The Hill. The lawsuit alleged the administration started demolition and early construction activity before securing required approvals.
For contractors, that kind of conditional green light creates a familiar but costly problem. Work can continue, but so does uncertainty. The national attention the job has garnered spotlights the risks contractors face when taking on a controversial project that gets mired in litigation.
“When litigation impacts a project like this, a contractor has two immediate jobs,” said Jason Lien, partner and co-chair of the construction and real estate litigation group at Maslon, a Minneapolis-based law firm. “Figure out what, if any, work can move forward and how a potential suspension of work is addressed in the contract.”
The Trump administration announced Bethesda, Maryland-based Clark Construction Group as the lead builder on the project in July, with Dallas-based AECOM providing engineering services. Neither firm immediately responded to requests for comment for this story.
The White House also tapped ACECO, a Silver Spring, Maryland-based contractor, for demolition of the East Wing. The firm couldn’t be reached for comment Wednesday.
Uncomfortable decisions
The ballroom project differs sharply from a typical commercial or residential renovation, Chris Staine, partner at Shumaker, Loop & Kendrick, a Toledo, Ohio-based law firm, told Construction Dive. One major factor is the administration’s decision to demolish the East Wing before plans for the new ballroom were completed or submitted for approval, he added.
Though owners sometimes authorize demolition before final plans are complete, Staine said sequencing typically happens only after designs are substantially developed, and rarely on a project of this scale and sensitivity.
“What’s so unusual is that they proceeded, especially since we’re talking about not just your standard garden variety project,” Staine said. “You’re talking about the White House. You’re talking about the East Wing. They demolished it. That was pretty breathtaking to do that under the circumstances.”
From a contractor’s perspective, Staine said one of the most concerning issues is being asked to perform demolition work before permits are approved. That scenario would typically raise red flags in almost any jurisdiction.
“If I was a contractor and I was asked to move forward with demolition in the absence of a permit, obviously, I would be extremely uncomfortable with that,” Staine said. “I would place the owner on notice that such a directive runs counter to what the local building code and the building department’s requirements state.”
In that situation, Staine said a contractor would likely demand indemnification from the owner, and even still might decline to proceed.
“I don’t know that I would be comfortable as a contractor,” he said. “I would absolutely require that the owner indemnify me for the negative consequences associated with that type of instruction.”
Favorable ruling does not guarantee protection
Once litigation emerges, a contractor’s risk escalates quickly, said Lien. That’s true even if courts stop short of ordering an immediate shutdown.
“The risks to the contractor rise quickly once a lawsuit enters the picture,” Lien said. “Litigation can slow work, trigger demobilization and remobilization, cause inefficiencies, increase material costs or delay payments, none of which the contractor controls.”
That uncertainty becomes especially important on widely watched projects such as the White House ballroom, where public scrutiny and legal pressure can spill beyond the courtroom and into a construction company’s broader business, he added.
“In higher-profile projects like the White House ballroom project, contractors may find themselves pulled into the dispute or the public narrative even if they had no role in the underlying controversy,” Lien said. “Uncertainty burns money through delays, payment slowdowns and unwanted attention.”
In October, for example, ACECO was the target of heightened online criticism, the company reported at the time.
Tuesday’s ruling from the federal judge underscored the risk. The judge said the government should be prepared to tear out below-ground work if it later prevents changes to what happens above ground, according to the NBC report.
Contract details do the heavy lifting
Attorneys emphasize the construction contract will become the contractor’s primary protection against negative outcomes.
“Contractors that navigate these situations will treat them like any other major project disruption,” Lien said. “They document cost and schedule impacts, communicate early and often with the owner and keep their options open in case the court orders a slowdown or shutdown.”
Staine echoed that view. He called the construction contracts “risk allocation vehicles” that ultimately determine who absorbs delays and uncertainty when things go wrong.
“There are risks that are well beyond the contractor’s control,” said Staine. “It’s those types of risks that a contractor needs to be particularly mindful of when they’re entering into the contract, so that they are not being held responsible for risks that are beyond their control.”
Whether a contractor chooses to stay on a project mired in litigation becomes a business decision, shaped by those contractual protections.
“Whether to stay comes down to contract, cash flow and reputation. If those don’t line up, it may be time to walk,” Lien said. “A contractor’s reputation takes a hit when the public stops seeing it as a builder and starts seeing it as part of the fight.”
That decision will ultimately boil down to a risk-reward calculation, said Staine. The outcome of that choice will vary due to firm size and overall financial resilience.
“Some contractors just can’t weather sustained legal battles,” said Staine. “The juice just isn’t worth the squeeze.”
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