Subcontract retainage is also capped at 5% but in no case may it exceed that of the prime contract, as it was with the prior law
Having a contract with the federal government is one such exception, and an interrelated exception falls under the Severin doctrine
The objective is to transfer the risk of injury or property damage to the party that has the best ability to prevent the injury or damage
It is designed to react to losses that occur during the course of construction, with the goal of getting the project back up and running after a loss
Surety companies are authorized and qualified to do business by the state insurance commissioner where they are domiciled and in the jurisdiction where the bond is issued
Surety bonds on construction contracts provide critical prequalification of a bonded contractor and financial protection for the owner and certain subcontractors and suppliers
In an effort to achieve some parity with existing domestic sourcing rules, OMB notes that its guidance is “[consistent] with certain provisions of the [Federal Acquisition Regulation (“FAR”)].” 5 However, as OMB notes, the FAR implements portions of the Buy American Act (“BAA”) applicable to “Federal procurement—what the Federal government buys for its own use,” whereas BABA applies to “Federal financial assistance for infrastructure projects – or grants, cooperative agreements, and other Federal awards that Federal agencies provide to recipients constructing such projects.” 6 In other words, BABA applies to federal transactions covered under the Uniform Guidance (2 CFR 200 et seq), not to government contracts that fall under the provisions of the FAR. OMB also notes that, despite the desire for parity between existing regulations and the final guidance, the IIJA includes several statutory requirements inapplicable to the BAA. Despite the statutory differences, and likely recognizing the potential for conflation between the several different approaches to domestic sourcing requirements across different purchasing instruments, OMB intended to stick to the FAR definitions of “brought to the work site,” the components test 7 , and “predominantly of iron or steel or a combination of both.” 8 OMB notes that its ability to provide guidance consistent with the FAR is complicated by the language of the law, which differs substantially from BAA requirements, but also the types of transactions covered by the BABA, which are broader than those covered by the BAA
By Christopher Moore Sweeney and Alexandra Elena Busch of Cozen O’Connor Published June 2, 2020 As most states, counties, and municipalities across the country lift restrictions on businesses and travel, it is easy to think the worst is behind us, especially for the construction industry