A federal judge has allowed construction on the controversial White House ballroom project to continue, but construction law experts say the ruling does little to reduce the legal and financial risks facing contractors involved in the high-profile job.
The project, now estimated at $400 million — double its original $200 million price tag — has been the subject of mounting scrutiny since the National Trust for Historic Preservation sued the Trump administration earlier this month. The lawsuit alleges that demolition and early construction activities began before required approvals were secured, placing contractors in a precarious position even as work moves forward.
For builders, that conditional approval creates an all-too-familiar challenge: continuing work amid unresolved legal uncertainty. Attorneys say projects that attract national attention and litigation can expose contractors to elevated risks that extend beyond the jobsite.
“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 named Bethesda, Maryland-based Clark Construction Group as lead contractor in July, with Dallas-based AECOM serving as the project’s engineer. ACECO, based in Silver Spring, Maryland, was selected to handle demolition of the East Wing. None of the firms immediately responded to requests for comment.
Legal experts note that the White House ballroom project differs significantly from typical renovation or redevelopment efforts. Chris Staine, a partner at Shumaker, Loop & Kendrick in Toledo, Ohio, said the decision to demolish the East Wing before final plans were completed or approved is especially unusual given the project’s scale and historic 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.”
Staine added that being asked to perform demolition without finalized permits would typically alarm contractors 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 such cases, contractors would likely seek indemnification — and may still decline the work altogether.
“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.”
While the judge’s decision allows construction to proceed, attorneys caution that litigation itself significantly increases risk, regardless of whether work is halted.
“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.”
The ruling also included a warning that the government may need to remove below-ground work if it interferes with future design changes, further underscoring the uncertainty contractors face.
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Lien said highly visible projects like the White House ballroom can also expose contractors to reputational harm, even if they are not responsible for the underlying dispute.
“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.”
Both attorneys emphasized that construction contracts — not court rulings — ultimately determine how risk is allocated when litigation disrupts a project.
“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 described contracts as “risk allocation vehicles” that dictate who absorbs the consequences of delays, design changes and legal uncertainty.
“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.”
Ultimately, whether a contractor stays on a project embroiled in litigation becomes a business decision shaped by contract terms, cash flow and reputational considerations.
“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.”
Staine added that not all firms can withstand prolonged legal battles.
“Some contractors just can’t weather sustained legal battles,” said Staine. “The juice just isn’t worth the squeeze.”
Originally reported by Sebastian Obando in Construction Dive.
