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On Cyber Monday you may be looking for the best shopping deals, but it is also a good day to review cybersecurity priorities and make sure your contractor clients are doing the same. Here are five NASBP resources that can help raise cybersecurity awareness and that offer steps to take that can minimize cyberattack risks. 1) Data Privacy and Cybersecurity 101: What Bond Producers and Sureties Need to Know - NASBP Virtual Seminar The basics of prevention and preparation for cyber incidents and compliance with new and emerging privacy regulations, including incident response and privacy planning, employee training, and the cyber insurance market. –  NASBP ...
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By Saxe Doernberger & Vita, P.C. Every commercial property owner, developer, general contractor, subcontractor, and vendor should understand the concept of contractual risk transfer and how it might affect its company and projects. Contractual Risk Transfer Defined With any kind of commercial property development, the parties involved face risk. Whether you’re the owner, general contractor, or some other entity involved in the project, there’s always the risk that accidents, injuries, damages, negligence, bad weather, or some other act of God could lead to increased costs and liability exposure. Often, insurance covers these risks. But contractual ...
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By Alex Thrasher and Carly Miller of Bradley Arant Boult Cummings LLP Published October 27, 2022 Bradley regularly represents general contractors (and other contracting parties) on large hospital projects—whether it be during project development, construction, or in the dispute stage. In one recent case, Bradley represented a general contractor in a dispute with a hospital owner who purported to terminate the contractor for cause. After a month-long arbitration, the termination was proven to be wrongful, entitling the contractor to its termination-related damages. Although many issues were at play, the central issue in the case was delay to the project. ...
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By  Bill Wilson  of Robinson+Cole Published August 31, 2022 The recent Connecticut Appellate Court decision in Electrical Contractors, Inc. v. 50 Morgan Hospitality Group, LLC , 211 Conn. App. 724 (2022), eliminated any remaining doubt regarding a subcontractor’s right to payment for work performed when the subcontract includes a “pay-if-paid” provision. A pay-if- paid provision that makes an owner’s payment to the general contractor (GC) a condition precedent to the GC’s payment to a subcontractor excuses the GC from paying its subcontractor until it actually receives payment from the owner. If the owner doesn’t ever pay the GC, the condition is not fulfilled, ...
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By Richard G. Erickson of Snell & Wilmer LLP Published in the Fall 2022 Under Construction newsletter Our construction clients may spend significant time, money, and effort refining and updating their contract provisions covering indemnification and the duty to defend claims. Consider spending an appropriate and adequate amount of time, money, and effort when sending notices, or “tenders,” to enforce those critical provisions. Tenders demanding defense and indemnity are strictly interpreted based on what the construction contract requires. Getting tenders wrong can result in losing one of the most significant risk-shifting tools in the construction ...
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By Tyson J. Prisbrey and Mark O. Morris of Snell & Wilmer LLP Published in the Fall 2022 Under Construction newsletter Construction contracts generally provide that the loser in a construction dispute must pay the attorneys’ fees of the prevailing party. But construction contracts, by their nature, can lead to outcomes in which it is hard to determine who comes out on top of a dispute. Parties’ misconceptions about the leverage they have with attorneys’ fees clauses, and false senses of strength, often lead to mistakes in being overly aggressive in litigation that ultimately leads to disappointing, inefficient, and surprising resolutions. ...
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By John Palatiello of Miller-Wenhold Capitol Strategies On this day, October 27, in 1972, President Nixon signed into law legislation providing for qualifications based selection (QBS) of architecture, engineering, (A&E) and related services, including surveying and mapping. It was 50 years ago today the Brooks Act became law. At the time of its enactment, the Brooks Act was a radical departure from the norm of lowest bid in Federal procurement.  It set a precedent that enabled qualitative factors to become commonplace in various contemporary acquisition procedures. In other words, A&E was for past performance and best value before it was cool. ...
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Written By Eve-Lynn Gisonni of Saxe Doernberger & Vita, P.C. Published May 24, 2022 With the ever-increasing usage of technology in the construction and energy industries, risks to business operations have also increased. Property developers and construction contractors rely on electronic data and communications more than ever to streamline projects, ensure efficient and timely supply chain delivery, and facilitate immediate communications between parties. However, with this dependence upon technology comes the heightened risk of cyber criminals frustrating construction operations and driving up costs. Similarly, as the energy sector has grown more ...
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Written By Ian Reynolds , Scott Bower , Brian Reid , and Peewara Sapsuwan of Bennett Jones LLP Published October 06, 2022   Key Highlights Interest of innocent third party without notice not an absolute bar on rescission remedy. Lenders, project companies, subcontractors and suppliers should seek risk mitigation measures to decrease reliance on bonds.   Bonds are commonly used on construction projects in Canada to provide security for owners, subcontractors and other parties supplying labour and materials in the event of an insolvency or other performance failure. However, in the recent Ontario Court of Appeal decision of  Urban Mechanical ...
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By Jason T. Strickland of Ward and Smith, P.A. Published October 14, 2022 Those of us of a certain age recall the phrase "reading the Riot Act" as a stern warning or dressing down.  Someone chewed out by a parent or a boss at work would be said to have been "read the Riot Act." The history and meaning of that phrase inform the importance of providing the other party to a contract, especially a construction contract, with notice and an opportunity to cure prior to invoking harsh remedies under the contract. Why is "Reading the Riot Act" a Stern Warning?   The British Parliament adopted an act against riotous assemblies in 1714 ("the Riot Act"). Similar ...
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By Brian Gaudet of Kilpatrick Townsend Kilpatrick Townsend Partner Brian Gaudet recently presented on “Hot Topics in Construction Contracting” at the Association of Corporate Counsel Houston Chapter Meeting. With the continuing impact of COVID-19, the supply chain crunch, world events, and changes in the law, there are numerous issues to consider when entering into a construction contract and managing a construction project. Some of these concepts like force majeure and price escalations will apply to other types of commercial arrangements as well. Key takeaways from Gaudet’s presentation, include: 1. Traditional force majeure clauses, whether they ...
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By Jon Williams and Ustina Ibrahim of PilieroMazza PLLC Published September 22, 2022 As many contractors know all too well, the System for Award Management (SAM) has had a rocky 2022 driven by the transition from the Data Universal Numbering System (DUNS) to the assignment of Unique Entity IDs (UEI) through SAM. PilieroMazza previously wrote about the issues here . The switch resulted in a wide range of entity validation issues, causing contractors undergoing the validation process to miss their payment deadlines and significantly hampering their ability to register in SAM in time for proposal submissions.  For government contractors pursuing DOD procurements, ...
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By Robert B. Nussbaum of Saiber LLC Published September 19, 2022 In New Jersey, the “economic-loss doctrine” bars tort claims when the plaintiff’s only damages are economic in nature because, when parties enter into a contractual relationship, a contractual remedy flows from contract, not tort. The doctrine also applies when parties do not have a contractual relationship with each other but have separate contracts with a third-party – a common occurrence in the construction context where many parties – general contractors, subcontractors, suppliers, design professionals, and the like may directly contract with one party but not with all parties involved ...
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By Ronald J. Eager of Grassi Published September 9, 2022 The Inflation Reduction Act, signed and passed into law on August 16, 2022, includes $369 billion in climate and energy spending. One of the most exciting parts of the package expands the benefit of Section 179D, which provides a tax deduction for contractors who install or design energy-efficient HVAC, building envelope and lighting assets in qualifying structures. Finally, we have a change we’ve been waiting for since the deduction’s inception in 2006. Do you want your piece? While much of the 179D deduction as we know it remains unchanged, the Act contains some new win-win changes. Previously ...
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By Joseph Natarelli, CPA and National Construction Leader of Marcum LLP’s Construction Services practice Jared Cohane, Partner with Hinckley Allen , and Peter J. Martin, Construction Litigator with Hinckley Allen NASBP published an abbreviated version of this article in the 2022 fall issue of NASBP Surety Bond Quarterly magazine. See the “Hot Topics in Construction and Surety Risk Management” at the Q&A titled, “Material Price Escalation—Can Contractors and Sureties Mitigate Market Volatility Risk? ”   For more than two years, price volatility of construction materials has significantly eroded contractors’ bottom lines. Multiple factors ...
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By Nell M. Hurley of Ernstrom & Dreste LLP Published Fall 2022    A subcontractor bids a concrete job that requires that the concrete be poured rather than pumped, which is more costly. Part way through the job, the subcontractor is told that the remaining concrete must be pumped instead, and it seeks a price adjustment. The contractor is in general agreement, but the parties have difficulty reaching price terms. Despite the dispute, the contractor orders the subcontractor to proceed with the work, which the subcontractor refuses to do. The contractor terminates the subcontract and completes the work by other means. The parties end up in court, ...
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By Alexander Gorelik of Smith, Currie & Hancock LLP Published September 19, 2022   Climate change has been a hot topic of discussion for some time now. President Joseph Biden’s administration has focused in on that issue, and the related need for protecting the environment, as part of its regulatory agenda through several Executive Orders (EO). Each of those EOs, specifically No.  14030  (“Climate-Related Financial Risk”), No.  14057  (“Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability”), and No.  14008  (“Tackling the Climate Crisis at Home and Abroad”), alluded to the potential of new environmental requirements for certain ...
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By Nell M. Hurley of Ernstrom & Dreste LLP Published Fall 2022   Sometimes the question a court is asked is not the one the court decides to answer. What began as a dispute over an apparent low bidder’s qualifications and experience for the project became, instead, a question of whether a bid specification violated public bidding laws so as to be disregarded entirely, rendering the original question moot. In the end, the apparent second lowest bidder was held to be the low bidder all along, and a petition to review the owner’s determination against the initial low bidder was dismissed, without reaching the qualification issue. [1] The violative ...
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By Campbell Pryde, President and CEO of XBRLUS The U.S. Small Business Administration (SBA) Surety Bond Guarantee program works with 350 authorized bond producers, and in fiscal year 2020, the SBA guaranteed more than 10,000 bonds (bid, performance, and payment) valued at over $7 billion.   Without an SBA guarantee, many small contractors would have a difficult time getting bonded. And without a surety bond, they may be unable to bid on key contracts. Bond producers have an important role in facilitating contractor access to new business. While small contractors are skilled at the trade side of their work, they may be relatively new to the task of starting ...
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By John Mattox of Schoonover & Moriarty LLC Published September 8, 2022 In many government contracts, but especially construction ones, security  is the watchword–security for the Government, that is. To that end, the Government tethers contractors to their bids. Likewise, it demands certainty of performance and payment of subcontractors. In short, the Government doesn’t want a routine building project turning into an  imbroglio –or become a monument to unfulfilled visions, like the famously incomplete buildings cataloged  here . For that reason, the Government accessorizes contracts with some fun  FAR provisions that allow for deep and dreamless ...
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