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By Matthew Rambaran of CliftonLarsonAllen Published February 18, 2021 Key insights Certain 2020 first draw PPP loans were flagged with hold codes after SBA review. An unresolved hold issue does not prohibit a borrower from receiving a second draw loan, but it may affect the timing of a second draw funding. If you have an unresolved issue on your first draw PPP loan, move quickly to identify the additional documents requested and supply them to your lender. If you did not apply for a second draw loan but have hold code(s) on your 2020 first draw application, your lender must resolve the hold code(s) during the forgiveness process. Under the ...
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By Christopher M. Mills , Tara L. Ward , and Nicole E. Giles of Wiley Rein LLP Published February 2021 As we move into the second year of a global pandemic, construction contractors are not only taking stock of project delays and disruption experienced to date, but also preparing for more of the same. What better time than now for contractors to take affirmative steps to protect themselves from default actions and to preserve their right to a time extension and/or contract adjustment. Delay and Disruption in a Pandemic As construction contractors well know, delay to agreed-upon construction schedules can result from a host of circumstances. The ...
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By Kathleen M. Morley and Zachary D. Sanders of Cohen Seglias Pallas Greenhall & Furman PC Published February 18, 2021 Despite the exhaustion and chaos that the COVID-19 pandemic brought to the construction industry in 2020, turning the page to 2021 offers several reasons for cautious optimism, including two approved coronavirus vaccines (with a possible third soon to follow) and a $900 billion relief package (with perhaps more on the way). Recent economic forecasts for the construction industry cite these developments in rendering positive, but not entirely certain, outlooks. Richard Branch, the chief economist at Dodge Data & Analytics, summed ...
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By Matthew Rambaran of CliftonLarsonAllen Published February 15, 2021 Key insights Good-faith errors in PPP loan applications may have led to some loans being oversized. Borrowers and lenders should work together to remedy the incorrect PPP amounts. The borrower is at risk of being liable, so if you are a PPP borrower, make sure you account for any errors soon! During first draw loans for the Paycheck Protection Program (PPP) in March 2020, there was much confusion surrounding the calculations and payroll items to include in loan sizing. As such, borrowers could have made errors in good faith that resulted in a PPP loan amount exceeding the ...
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By Julian Bailey and Ralph Goodchild of White & Case LLP Published February 16, 2021 Construction contracts may be priced in a number of ways. For most contracts, even those which are "fixed price", there is usually scope for cost/price variability. Four cases from December 2020 highlight some of the difficulties that can arise when parties agree that payment should be based on cost. Case 1: Never Pay Retail Alebrahim v BM Design London Ltd [2020] EWHC 3393 (TCC) concerned a contract for refurbishment of a residential property. The employer sued the designer/contractor for alleged overpayments under the contract, arguing (among other things) ...
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Are you taking advantage of all the ways NASBP can help you and your clients in these uncertain times? Many people are working from home to stay safe from the pandemic, and NASBP makes it easy to connect to the surety industry with free print and online publications. Information, advice, and best practices showcased in NASBP print, online, and web-based material can be delivered to your inbox or your mailbox. Sign up to receive the free print version of Surety Bond Quarterly magazine or read current and archived issues of the magazine available as a digital edition . At Suretybondquarterly.org magazine stories are mobile-device accessible ...
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By Mark A. Bloom , Andrew Ross , and Victoria F. Wiener of Arent Fox LLP Published February 5, 2021 The Biden Administration’s initial efforts include actions and goals designed to benefit the construction industry, either through Executive Orders or proposed legislative relief packages. Here is a summary of key announcements. President Biden’s COVID Relief Packages and “Build Back Better” Plan The Biden Administration stated that it is focusing on curbing the economic effects of the pandemic through proposed legislative relief packages. On February 2, 2021, the Senate voted to advance Biden’s first legislative priority – the “American Rescue Plan.” ...
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By Lori Ann Lange of Peckar & Abramson, P.C. Published February 4, 2021 The Buy American rules are in a state of flux and it is difficult to predict what the final requirements will be in the future. Shortly after the FAR Council issued the final Buy American rule, the Biden Administration proposed significant changes to the Buy American requirements that will increase the use of goods made in America on government contracts in the future. Further, while the final rule was published before the Biden Administration’s regulatory freeze, the FAR Council does have the option to freeze implementation of the final rule, although as of the drafting of this ...
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By Kyle M. Doiron and Cristopher Farrar of Bradley Arant Boult Cummings LLP Published February 2, 2021 Sometimes the best advice is the advice we already know, but a timely reminder makes all the difference.  In this first blog post of the series, the advice is exactly that. Get the right entities on the dotted lines. You’ve spent weeks negotiating the minutiae of change order procedures, hemming and hawing on completion dates, and a guaranteed maximum price. These items are obviously critical. But have you confirmed that you are contracting with the correct entity, or better yet, are you yourself contracting as the correct entity? You may read this ...
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The first NASBP Virtual Seminar in the Surety Industry Spotlight Series, held on January 27, was a great success with more than 230 attending or downloading to view it after the event. If you missed it, or want to view it again, a recording of “Conversations with Surety Industry Leaders—Part 1” is available. This roundtable discussion features executives with NASBP Affiliates including Steve Anderson of Swiss Re , Larry Taylor of Merchants Bonding Company , and Rick Ciullo of Hartford Bond in a conversation moderated by NASBP Past President Ed Heine of PayneWest Insurance . Pictured above: Steve Anderson, Head of Surety North America - NAS / Executive ...
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By Jason Markel , Reetuparna Dutta , and Valerie Stevens of Hodgson Russ LLP Published January 29, 2021 The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Economic Aid Act”) was adopted on December 27, 2020, extending the availability of the original First Draw Paycheck Protection Program (“PPP”) Loans through March 31, 2021. It also created a new Second Draw PPP Loan program (“PPP2”) allowing prior PPP borrowers to seek a second loan. The Economic Aid Act required the SBA to issue initial regulations within ten days of enactment to carry out the provisions of the Act and amendments to the PPP and, on January 6, 2021, the SBA ...
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By Christine Hall and Christine DiMenna of CliftonLarsonAllen LLP Published January 22, 2021 Key Insights The SBA released Form 3508S on January 19, 2021. The one-page form greatly simplifies the loan forgiveness application. Form 3508S is for PPP borrowers with first or second draw loan amounts of $150,000 or less.   Over 4.5 million borrowers representing 85% of initial Paycheck Protection Program (PPP) loans now are eligible to request forgiveness under a much more streamlined application using the updated Small Business Administration (SBA) Form 3508S. Who can use the updated Form 3508S? As a borrower, you can apply for forgiveness on ...
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By Richard G. Erickson and Creighton P. Dixon of Snell & Wilmer LLP Published in Under Construction newsletter, January 2021 Last November, Arizona’s Court of Appeals issued a memorandum decision analyzing Arizona’s Prompt Pay Act. Though the decision was not published and is not binding authority, it does guide the construction industry and practitioners as to how this court analyzed Prompt Pay Act enforcement. To set the table, Shea Connelly Dev. LLC v. Ariz. Registrar of Contrs . was limited to a payment dispute between the general contractor Shea Connelly, and its subcontractor, Revive. The project owners effectively had no role in the dispute. ...
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By Bernadette Kasnicki of Farrell Fritz, P.C. Published January 19, 2021 Today the U.S. Department of the Treasury and the U.S. Small Business Association (“SBA”) have fully reopened the Paycheck Protection Program (“PPP”) loan portal to participating lenders to submit first- and second- draw loan applications. The Legislation The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venue Act (“Economic Aid Act”) was included in the Consolidated Appropriations Act, 2021  (the “CAA”), which was signed into law on December 27, 2020. Through the Economic Aid Act, the CAA, among many other things, reauthorizes and modifies the PPP, allocating more ...
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By Amy K. Wolfshohl of Porter Hedges LLP Published January 15, 2021 Change orders can quickly become a source of contention on construction projects and are often the subject of major disputes.  As a result, it is important for stakeholders to carefully draft and negotiate the change order and related provisions pre-contract.  The key portions in a change order clause beyond the obvious ( i.e . changes have to be in writing) include the following:  Condition Precedent to Payment.  In order to protect the enforceability of the change order provision, the change order procedure is best described as a condition precedent to payment. Addressing Cost ...
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By Jennifer V. Audeh of Foley Hoag LLP Published January 11, 2021 On January 6, 2021, the U.S. Small Business Administration and the Department of Treasury released interim final rules related to the expansion and extension of the original Paycheck Protection Program  (PPP) and the authorization of a  second round of PPP loans  pursuant to the $900 billion COVID-19 relief package ( the Consolidated Appropriations Act, 2021  (the “Act”)) enacted on December 27, 2020. In an effort to promote access to capital, initially only community financial institutions will be able to make new first time PPP loans starting on Monday, January 11, and second draw PPP ...
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By Brooke C. Bahlinger and Carrie Hoffman of Foley & Lardner LLP Published January 6, 2021 Following up on its release of a proposed rule issued in September 2020 , the DOL finalized new regulations on classifying independent contractors that it suggests will provide clarity for employers. On January 6, 2021, the DOL announced the  Final Rule , which will take effect on March 8, 2021 (60 days after publication). At the outset, the Final Rule addresses comments that it had received in response to the publication of the proposed rule, specifically noting that many Uber drivers were supportive overall, and some commentators stated that there was no ...
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By Michael F. McKenna and Timothy R. Ryan of Cohen Seglias Pallas Greenhall & Furman PC Published in Construction in Brief , Volume 3, 2020 Design-build contracts (and their lesser utilized counterpart—engineering, procurement, and construction (EPC) contracts) are prevalent in the construction industry. Though far from a new contractual relationship, design-build contracts are increasingly chosen by owners in an attempt to reduce risks and costs. The design-build model differs from the “traditional” design-bid-build model in that, with the traditional model, an owner is often very involved in both the initial design of the project and design ...
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By Marty McCarthy , CPA, CCIFP of McCarthy & Company Published January 8, 2021 Be sure to check out the  NASBP Virtual Seminar that features McCarthy's insights and tips into construction accounting and financial statements for 2021 .       Yesterday we addressed the recent guidance from the Small Business Administration (SBA) and Treasury Department on getting a new Payroll Protection Program (PPP) loan. Today we are going to cover the eligibility requirements for a second PPP loan. The 42-page Interim Final Rule (IFR) “ Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans ” lays out the guidelines for new PPP ...
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By Marty McCarthy , CPA, CCIFP of McCarthy & Company Published January 7, 2021 Be sure to check out the NASBP Virtual Seminar that features McCarthy's insights and tips into construction accounting and financial statements for 2021 .       The U.S. Small Business Administration (SBA) and Treasury issued guidance late Wednesday night for the reconstituted Paycheck Protection Program (PPP). The guidance came in the form of two interim final rules (IFRs). The  82-page IFR  “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” consolidates the rules for PPP forgivable loans for first-time borrowers and outlines changes ...
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