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The Contractor Bonding Education & Mentoring Program has been operating for most of 2022, and participants say that in that time the program has helped introduce new and emerging construction contractors to the benefits of surety bonding. At the same time, mentors receive the satisfaction of knowing they are helping the local business community thrive by spreading the knowledge of how to qualify for surety bonding. Lisa Kelly is the CEO of a small contracting construction firm in the New Orleans suburb of Chalmette, Louisiana. She started the fencing and welding company, G&L Welding Service & Repair, with husband Gerald Kelly in 2020. Gerald ...
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By  David C. Petrone  of Cohen Seglias Pallas Greenhall & Furman PC Published July 25, 2022   In a recent Armed Services Board of Contract Appeals (ASBCA) decision,  Pave-Tech, Inc. , the ASBCA found that the decisions a construction contractor makes, even from the very beginning of a project, have consequences. In another recent article, we  warned  about signing contract modifications that contain release language which could thereafter preclude recovery of costs to which a contractor thought it was entitled later in a project. The decision in  Pave-Tech  reinforces the importance of considering all aspects of a contract from the onset of a project. ...
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NASBP and its membership advocate for legislation that provides education and resource opportunities to small, women, minority, and veteran-owned construction companies to better position them to qualify for surety credit. NASBP offers its own educational resources for contractors through the NASBP SuretyLearn for Contractors website , a one-stop shop loaded with free surety information for bond producers and their small contractor clients. The site links to many resources, including NASBP Virtual Seminars that focus on construction topics, NASBP Let’s Get Surety Podcast episodes, the NASBP Be Guaranteed to Succeed Campaign contractor resources, the Contractor ...
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By David Robbins Co-Chair, Government Contracts Practice of Jenner & Block   The saga of the False Claims Act case U.S. ex rel. Scollick v. Narula et al. took a pro-surety and pro-producer turn recently when Judge Lamberth dismissed all claims against the “insurance defendants.” Judge Lamberth issued the decision under seal on July 19 and unsealed the decision last Friday, July 29. Plaintiff-relator alleged that sureties and producers could be liable under the False Claims Act for failing to disclose to the Government supposedly superior knowledge that a principal was not eligible for set-aside contracting (here, service-disabled veteran owned ...
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The U.S. Small Business Administration (SBA) is amending its regulations to implement new provisions of the National Defense Authorization Act (NDAA) Fiscal Year (FY) 2021. The final rule provides new methods for small business government contractors to obtain past performance ratings to be used with offers on prime contracts with the Federal Government. A small business contractor may use a past performance rating for work performed as a member of a joint venture or for work performed as a first-tier subcontractor. This final rule updates the requirements for small business subcontracting plans to add a requirement for prime contractors to provide past performance ...
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By Ryan C. Hall of Miller Nash LLP Published July 8, 2022   More than two years removed from the first reported case of COVID-19 in the United States, the construction industry continues to cope with the pandemic’s lasting effect on the costs of new construction projects. These impacts include soaring construction material costs, a diminishing supply of construction labor, and lingering disruptions to supply chain channels. Together, these forces resulted in skyrocketing construction costs across both the commercial and residential construction landscape.   As a consequence, project owners and construction contractors have exercised a new degree ...
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By Annie D. Rosenthal of Saul Ewing Arnstein & Lehr LLP Published July 18, 2022   Earlier this year, the Second District Court of Appeal of Florida held that a “no damages for delay” clause “will not be enforced in the face of governmental fraud, bad faith, or active interference with performance under the contract.”  Sarasota County, Fla. v. Southern Underground Industries, Inc. , 333 So. 3d 285 (Fla. 2d DCA 2022) (emphasis in original) (internal citations omitted).   Sarasota County (the “County”) contracted Southern Underground Industries, Inc. (“SUI”) to install a sanitary force main pipe and water transmission line. The County issued a ...
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By Denise Motta of Gordon Rees Scully Mansukhani Published June 2022 This Bulletin provides guidance to contractors, subcontractors, suppliers, and others to ensure compliance with contractual change order requirements in the event work on a construction project is impacted by supply chain delays. Contract Protection Tips: The construction industry is being impacted substantially by inability to obtain necessary construction products due to supply chain issues. Most construction contracts do not accommodate time extensions due to supply chain impacts. To address this gap in contract terms, we recommend including language such as: “lack of or failure ...
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by Laura Penhale and Tom Postol of IAT Insurance Group Labor shortages and rising material costs pose a significant challenge to construction contractors, well beyond squeezed profit margins. Here are 3 construction risks to keep in mind and some guidance that can help companies manage through the current environment. Notwithstanding Covid’s onset in 2020, construction activity has been, and continues to be, robust. New home construction has risen 22% compared to a year ago, and multifamily residential has risen 37% over the same timeframe. With few exceptions, commercial building shows no signs of slowing down either. The public and federal construction ...
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By Airam Valdez of CliftonLarsonAllen Published June 28, 2022 Key insights The new lease standard is here and effective now. The core principle of Topic 842 is that all leases (with minimal exceptions for certain leases) create an asset and a liability for the lessee. Review answers to our top five questions asked below Recently, our national assurance technical group hosted  a webinar discussing the implementation and adoption of Accounting Standards Codification (ASC) Topic 842,  Leases . During this discussion we received a number of questions — and we’ve responded to the five most frequently asked.   Do I have to apply this ...
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By  Matthew DeVries  of Burr & Forman LLP Published June 28, 2022   Sometimes you “do” bad things. Sometimes you “look like” you do bad things.  Just look at the difference between Bad-boy Jack and my youngest daughter, who just “looks like” she’s up to no good. In the world of construction contracting, both can get in you in trouble, including a termination for default of performance.   Appeals of  Industrial Consultants, Inc. d/b/a W. Fortune & Company , ASBCA No. 59622  (2017) involved a construction contract to upgrade an HVAC system at a facility in New Hampshire. The Board held that the contractor was properly terminated for default ...
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By  Matthew DeVries  of Burr & Forman LLP Published June 16, 2022 I have seven children. And two of them have flown the coop. I also have two grandchildren who are ripe for spoiling. You see, grandchildren are a different  type of kid , which means I get to treat them differently than the kiddos living under my roof. In construction, however, some courts have held that the type of contract delivery method does not change the treatment of the other contract clauses, such as the applicability of a differing site conditions clause. Appeal of John C. Grimberg Co., Inc. , ASBCA No. 58791 (Oct. 25, 2018) involved the construction of a biolab facility at ...
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By Jim Shea of Miles Mediation & Arbitration Published June 1, 2022     There has been a growing trend of states enacting legislation making general contractors jointly and severally liable for the wages, benefits and supplements owed by project subcontractors to that subcontractor’s workers.   Most recently, New York has passed legislation that automatically makes General Contractors jointly and severally liable for wages, benefits, or wage supplements owed by its subcontractors to construction workers without the worker having to prove that the General Contractor employed or jointly employed the aggrieved worker. The New York legislation ...
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By Consuela A. Pinto and David M. Gobeo of FordHarrison Published June 2, 2022   Construction contractors are scrambling to secure contracts funded by the $1 trillion Infrastructure Bill signed by President Biden on November 15, 2021. Although lucrative, those contracts come with extensive obligations and stiff penalties for noncompliance. The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) and the Wage & Hour Division (WHD) have jurisdiction over certain construction contractors. Both agencies will soon be laser-focused on the construction industry.   OFCCP Affirmative Action and Non-Discrimination ...
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By  Jennifer Harris and Abby Salinas of Peckar & Abramson, P.C. Published Jun 16, 2022 The Department of Defense (“DoD”) recently issued a memorandum to contracting officers (“COs”) providing guidance on the use of economic price adjustment (“EPA”) clauses to address inflation-related cost increases. The memorandum, entitled Guidance on Inflation and Economic Price Adjustments , comes as the year over year inflation rate rose to  8.6% for the month of May  and contractors with fixed-price contracts seek ways to recover their rising costs. EPA clauses allow the parties to mitigate cost risks that present themselves as a result of circumstances beyond ...
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By Todd A. Feuerman, CPA, CCA, MBA, at Ellin & Tucker . The construction industry, along with the surety industry, continues to thrive as 2022 completes its second quarter. As construction demand continues and the market sees the impact of last fall’s $1 billion Biden infrastructure spending bill, project backlogs are generally substantial and as a result, surety programs are needed to support the robust market. And according to the American Institute of Architect’s Construction Forecast, signs point to an even brighter future. The non-residential construction market could increase by up to 5% and the residential construction growth should exceed ...
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Delays in Critical Material for Bridge Contractors: Managing Risk Through Proactive Planning and Strict Adherence to Notice Requirements By Aaron S. Evenchik , Michael B. Pascoe , Rob Remington , and Chad J. Van Arnam of Hahn Loeser & Parks LLP Published May 27, 2022 Supply chain interruptions are reaching critical levels and suspending work on projects. Shortages of bridge coating materials is the most recent area of concern and could be potentially catastrophic to unprepared contractors and owners. The inability to obtain materials may force painting contractors into a position where they cannot advance painting work, cannot retain painting ...
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By  Robert K. Cox of William Mullen Published May 25, 2022 Rapid material price escalation is a costly reality of today’s construction industry. How long this escalation will be a reality is anyone’s guess. In the meantime, there are workable solutions; but those pressing for solutions are fighting the headwinds of the traditional allocation of risk for material price changes, and therein lies the rub.  In the past, it was the rare contract that included terms or clauses allowing adjustment for material price increases. This is because material price increases generally have been viewed as an assumed risk of the general contractor or subcontractor/supplier ...
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By Jeremy Wood of Schwabe, Williamson & Wyatt PC Published April 26, 2022 Effective May 9, 2022, Native tribes, workers, and businesses may face fewer hurdles when competing for federal construction projects due to several revisions the Department of the Interior has published to its Department of the Interior Acquisition Regulations (DIAR), codified at 48 CFR parts 1401-1499, to better comply with the Buy Indian Act and policies from the Biden Administration. Shortly after entering office, President Biden signed Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. Focused on racial ...
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By Michael F. McKenna of Cohen Seglias Pallas Greenhall & Furman PC and Jeffrey P. Valacer of Turner Construction Company At the end of April 2021, the “Design-Build Construction Services Procurement Act” (the Act) became law in New Jersey. The Act brings important changes to how publicly-funded construction projects are awarded in the state by, most significantly, providing for the use of design-build contracting on publicly-bid projects. Praised for their efficiencies and cost savings, design-build projects have skyrocketed in use across America. A recent Pennsylvania State University study found that design-build projects had a 6% reduction ...
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