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By Anna R. Wright of PilieroMazza PLLC Published January 7, 2022   The Department of Justice (DOJ) recently  announced  a new “Cyber-Fraud Initiative” aimed at “developing actionable recommendations to enhance and expand [DOJ’s] efforts against cyber threats.” The initiative will be part of DOJ’s Commercial Litigation Branch, Fraud Section, and will use the False Claims Act (FCA) as a tool to combat “cybersecurity related fraud” among federal contractors and grant recipients. In light of DOJ’s efforts, government contractors and entities receiving federal funding should implement measures to reduce the risk of being sued by the government for failing ...
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By Lana Dauterman and Jason Eldridge of BKD LLP Published January 3, 2022 The research and development (R&D) federal tax credit provides an incentive for companies to increase their innovation and improvement activities. The credit is available to both public and private companies and is not industry specific. Per Internal Revenue Code Section 41, for research expenditures to qualify for the credit, they must meet four requirements.  Qualified Business Component First, the code requires that the research activity tie directly to a new or improved business component that is held for sale, lease, or license by the taxpayer or used by the company ...
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By Stephen E. Irving , Kevin J. O’Connor , Aaron C. Schlesinger , and Lauren Rayner Davis of Peckar & Abramson, P.C. Published January 13, 2022   The United States Supreme Court today stayed enforcement of the OSHA emergency temporary standard (ETS) requiring employers with 100 or more employees to require employees either be “fully vaccinated” against COVID-19 or submit to weekly testing. The ruling immediately stops enforcement of the rule which had gone into effect on January 10, 2022.   Today’s order raises significant doubt as to whether the ETS requirement will ever take effect in its current form. A 6 to 3 majority of the Supreme Court ...
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By Kristi Morgan Aronica of Weitz Morgan PLLC Published January 17, 2022 The overwhelming legal precedent on this question is that it does not. The requirements of the Federal Prompt Payment Act are found in FAR clauses 52.232-25 through 232-27. In short, these clauses set out invoicing and payment terms and provide for an interest penalty for late payments. However, FAR 52.232-27, Prompt Payment for Construction Contracts prescribes additional terms to account for the prime contractor/subcontractor relationships prevalent in construction contracts. FAR 52.232-27 mandates that prime contractors include similar requirements in their subcontracts and that ...
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By D. Bryan Thomas of Bradley Published December 2021 Legislation about retainage has become common place as many states have adopted different limitations, requirements, and schemes. A recent case in Tennessee is a good reminder that you must pay attention to all of the relevant state’s requirements. Failure to do so can be costly. In Snake Steel, Inc. v. Holladay Construction Group, LLC, the Tennessee Supreme Court recently addressed Tennessee's retainage requirements. While the case discusses a number of finer legal points on when and how to assert claims under Tennessee’s Prompt Pay Act, the biggest take away is that the Tennessee Supreme Court has ...
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By Rick Erickson of Snell & Wilmer LLP Published January 2, 2022 Welcome to 2022! This year, the construction industry will undoubtedly reflect on the last two years as unprecedented times plagued by construction project delays. The COVID-19 pandemic contributed to suspension of work and closure of construction projects worldwide in 2020. The end of 2021 brought additional delays caused by an inexplicable clog in the supply chain of construction materials. The combined impact of these events on project milestones and completion deadlines led our clients to ask, with unusual and particular urgency, who is liable for such delays and how do contracting ...
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NASBP and SFAA recently developed and launched the surety industry’s new Contractor Bonding Education & Mentoring Program . This free program helps small, new, emerging, minority-owned, and other disadvantaged contractors learn how to qualify for construction surety bonds. The Contractor Bonding Education & Mentoring Program includes two components: A set of eLearning modules available 24/7, which can be taken on demand at the learner's pace; and An optional mentor program with industry professionals who can provide practical advice and recommendations for mentees to follow in their efforts to achieve bonding. NASBP and SFAA have been joined ...
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By James T. Yand , Miller Nash LLP Published January 2022   Generally, the implied warranty of the adequacy of the plans and specifications, also known as the Spearin Doctrine, allocates risk to the owner for any defect in the design of the project. This influential federal decision has been applied by state courts across the country, including its adoption as part of Washington construction law. Recently, the Washington Supreme Court, in Lake Hills Investments, LLC v. Rushforth Construction Co., Inc., affirmed the long standing precedent that limits a contractor’s liability for defects when the contractor follows the owner provided plans ...
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By George E. Pallas and  Matthew L. Erlanger of Cohen Seglias One of the most powerful tools in a contractor’s arsenal for obtaining payment on a construction project is a mechanics’ lien claim, which is a security interest that attaches to the owner’s property interest and “clouds” the title to the property until payment is made to the contractor or subcontractor. Because mechanics’ liens restrict free and clear titles, Pennsylvania courts require strict compliance with the Mechanics’ Lien Law (the Lien Law). The Lien Law contains certain requirements for a lien to be “perfected” or valid. For example, a lien claim must be filed within six months of completing ...
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By Myriah Jaworski and Brian Myers of Beckage Published November 2, 2021 The Department of Justice has announced a new “Civil Cyber-Fraud Initiative” in which the Department will pursue civil actions for damages against federal contractors that fail to maintain cybersecurity standards and fail to report cybersecurity incidents and breaches. What Is the Civil Cyber-Fraud Initiative? On October 6, 2021, Deputy Attorney General Lisa Monaco declared that the DOJ will use its existing authority under the False Claims Act to bring civil litigation against entities or individuals that put U.S. information or systems at risk by either: Knowingly providing ...
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By Douglas L. Patin , Aron C. Beezley , and Amandeep S. Kahlon of Bradley Published December 8, 2021 A federal district court in Washington recently rejected a subcontractor’s motion for reconsideration of a previously granted motion to stay in a Miller Act lawsuit (the Miller Act governs prime contractor bond requirements on federal projects and sets forth remedies against the bond for subcontractors, vendors, and suppliers on such projects). In United States of America, for the use and benefit of Ballard Marine Construction, LLC, v. Nova Group Inc., et al., the prime contractor, Nova Group, moved to stay Ballard Marine’s Miller Act lawsuit until Ballard ...
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By Choity Khan of Robinson+Cole Published November 22, 2021 On November 15, 2021, President Biden signed into law the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA)which reauthorizes surface transportation funds and allocates $550 billion for new federal spending over the next five years. The $550 billion in new spending encompasses: $73 billion for upgrades to the country’s electricity grid, including the ability to carry renewable energy; $66 billion for new rail lines and upgrades to existing ones, including a significant investment in Amtrak to address major maintenance backlogs; $65 billion to improve the nation’s broadband infrastructure ...
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By Javier Hernández of FTI Consulting Published November 23, 2021 In this ‘Ask the Expert’ article, we speak to Javier H. Hernández, a Senior Director who recently joined our team in London, about the latest trends in construction project management. What are the biggest project management risks faced by construction and engineering professionals today? The combined impact of COVID-19, Brexit, and a boom in demand have had a huge impact on the construction industry, resulting in rising costs due to material and labour shortages. For example, in Ireland, the tender price increased to 7% in the first half of 2021 1 . To overcome this, project managers ...
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By Carl Oliveri of Grassi After years of notice and months of COVID-related delays, the effective date of ASC 842, the new lease accounting standard, is almost here for private companies. To help your construction company prepare, Jake Kurz, CPA  and  James Martin  of Grassi’s  Construction Group  answer some of the most commonly asked questions and provide practical tips for using the final weeks of 2021 to get ready for compliance. What is ASC 842?  The new lease accounting standard (ASC 842) was published by the Financial Accounting Standards Board (FASB) and requires the tracking and disclosure of all real property leased by a company. When ...
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By Jonathan Gallo of Vandeventer Black LLP Published November 22, 2021 Recently, Deputy Attorney General Lisa O. Monaco announced the Department of Justice’s new Civil Cyber-Fraud Initiative, aimed at combatting “new and emerging cyber threats to the security of sensitive information and critical systems.” The Initiative will be led by the Department’s Civil Division Commercial Litigation Branch, Fraud Section, and is a direct result of the Department’s comprehensive cyber review ordered by Deputy Monaco last May. The Initiative will utilize the broad civil enforcement provisions of the False Claims Act (FCA) to pursue cybersecurity-related fraud by ...
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By  Sarah B. Biser  of Fox Rothschild LLP Published November 22, 2021 Dispute Review Boards: Overview Problems, disagreements and claims arise in most large and complex construction projects regardless of the project delivery method — design-build, design-bid-build, construction manager at risk, construction manager not at risk and integrated project delivery system. These disputes can and do delay and significantly increase the cost of the project. Dispute Review Boards, also known as Dispute Resolution Board, Dispute Board, Dispute Avoidance Board or DRB are often found in large construction projects to assist the parties to minimize, resolve or avoid ...
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By David Blake of Seyfarth Shaw LLP Published November 3, 2021 Issue The cost and time to perform change order work may increase as a result of COVID-19 impacts that arise after the change order is agreed upon. The Contractor can include contingencies for that risk in its lump sum pricing, but the Owner will have paid an unnecessary premium if those impacts do not materialize. Proposed Solution Consider utilizing a COVID-19 Rider with your change orders. The Rider details the types of COVID-19 impacts that entitle the Contractor to relief, as well as the specific relief. This allows the parties to use their standard process and format for change ...
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Presented by Isaias "Cy" Alba, IV and Sarah L. Nash of PilieroMazza PLLC November 9, 2021 The Department of Justice settled and obtained judgments in excess of $2.2 billion for false claims against the government last year. And the False Claims Act (FCA) remains an effective enforcement tool about which federal contractors should be wary. Government contractors in the construction industry – both primes and subs – face a higher risk of FCA liability because of the complicated nature of construction contracts and prevailing wage obligations. Further, we have seen a substantial increase in investigations dealing with construction contracts, even mentor-protégé ...
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By Tawny Mack and Darren Rowles of Smith Gambrell Russell, LLP Published October 2021   Earlier this year, the soaring cost of lumber and other construction materials made headlines throughout mainstream media as contractors and owners grappled with the consequences of market volatility. While the construction industry has seen a significant decrease in the cost of lumber in recent months, the August 2021  Producer Price Index  published by the Bureau of Labor Statistics reported that the cost of materials and components for construction has increased 19% over the past 12 months. ¹In light of this market volatility, it is unsurprising that third-quarter ...
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By Andy Choi of Marcum LLP Published October 4, 2021  Undoubtedly, the COVID-19 pandemic disrupted nearly every aspect of people’s lives, including businesses and jobs. The pandemic adversely impacted the construction industry (classified as an essential industry) and as a result, many construction firms experienced and are still experiencing significant financial challenges. During the early stages of the COVID-19 pandemic, many contractors lacked the monetary resources needed to cover employee wages and keep their businesses afloat. Government intervention, through programs such as the employee retention tax credit and the SBA Paycheck Protection Program, ...
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