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Navigating Surety Risk: A Strategic Guide for Construction and Commercial Firms

posted 4 days ago
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By IAT Insurance Group Originally published September 23, 2024 In today's volatile economic climate, selecting the right surety partner has never been more critical. With high inflation, increased claims, and new entrants in the surety market, businesses face unprecedented challenges. IAT Surety’s comprehensive guide, " Navigating Surety Risk: 3 Best Practices for Construction Businesses and Commercial Firms ," offers invaluable insights into forging strategic partnerships that enhance stability and growth. From financial stability to industry expertise and service differentiation, this covers the essential characteristics to look for in a surety partner. ...
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EEOC Continues to Shine Spotlight on Construction Industry

posted 10 days ago
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By Allegra A. Sinclair , Scott R. Green , and Caroline J. Berdzik of Goldberg Segalla Originally published September 12, 2024 KEY TAKEAWAYS: The EEOC has noted workplace harassment is prevalent on many construction jobsites, with some of the most egregious incidents investigated occurring in the construction industry Given the EEOC’s pronounced interest in the industry, an uptick in enforcement actions involving construction employers will likely continue Reviewing EEOC guidelines and incorporating its best practices will help employers comply with nondiscrimination laws In a post last year, we discussed how examining the EEOC’s ...
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Fed Rate Cut and Its Implications for the Construction Industry

posted 10 days ago
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By Carl Oliveri of Grassi Originally published September 19, 2024 For the past few years, the construction industry has dealt with several “monsters” ranging from inflation to labor/succession issues to the constantly prevalent boogeyman, cash flow. Yesterday, the Federal Reserve started to put one of the monsters back under the bed by agreeing to cut interest rates by .50%/50 basis points. As the third quarter comes to a close and planning for 2025 is heavily underway, let’s look at a few ways this development could help the construction industry. The cost of borrowing money will be lower . Reduced interest rates will make it more attractive for ...
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Cancellation: A Government Agency's "Get out of Protest Free" Card?

posted 17 days ago
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By David Timm of Fox Rothschild LLP In the game Monopoly, players can end up in "jail," where they are prevented from moving on future turns. But some players might have a "get out of jail free" card up their sleeve to avoid being stuck indefinitely. A bid protest can put a government agency into a kind of "jail," preventing an agency from moving forward with award of a contract. But agencies can use their version of "get out of protest free" card if they take corrective action to cancel a solicitation. Regardless of the merits of the protest, when a government agency cancels a procurement, the Government Accountability Office (GAO) will dismiss the bid ...
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Where to Protest When the Government Says Your Bid Is Late

posted 18 days ago
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By David Timm of Fox Rothschild LLP Originally published March 20, 2024 In a January 2024 bid protest denied by the Government Accountability Office (GAO), an all-too familiar issue regarding allegedly late email bid submissions timeliness brought the split between GAO and the Court of Federal Claims (COFC) back into focus. The takeaway? COFC is the right place to protest when bid timeliness is in question, GAO is not. Bid submission timeliness, especially e-mail and electronic bid submissions, regularly lead to protests. Remember that contractors are not helpless and can take steps to ensure they avoid these issues, including early submission and proactively ...
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Second Quarter Construction Update: The Good, (The Strictly Okay), The Bad, and The Ugly

posted 19 days ago
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By Anirban Basu of Marcum LLP Originally published September 11, 2024 The construction industry held up remarkably well through the second quarter of 2024, yet cracks are beginning to surface under the weight of high interest rates and ongoing labor shortages. Much of the industry’s momentum is concentrated in federally funded or federally incentivized segments like infrastructure and manufacturing, and other primarily privately financed segments have struggled in recent months. Economywide inflation has waned in recent months, and there are recent indications that the labor market is weakening. While this emerging economic weakness is a cause for concern, ...
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Optimism Among Mid-2024 Construction Industry Trends: Report

posted 26 days ago
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By Gigi Wood of ForConstructionPros.com Originally published August 8, 2024 Among the mid-year trends identified in the 2024 Marcum National Construction Survey is contractors diversifying their project portfolios to deal with inflation and other economic pressures. "Some broad trends are evident in this year’s survey of construction industry leaders," the report stated. "Some are all too familiar, such as the ongoing struggle to find and retain skilled labor. Others show new approaches or opinions in the industry, like a significant portion of respondents seeking to broaden their scope of work to diversify their offerings." While many factors play ...
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OCIP vs. CCIP: Choosing the Right Insurance Program for Your Construction Project

posted 09-10-2024
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By Matt Barber of PCF Insurance Services In the world of construction, navigating the diverse landscape of insurance programs can feel as complex as coordinating a large-scale project itself. With many policies, regulations, and terms to decipher, making the right choice for your construction project is crucial. It can be the difference between a well-protected, smoothly run operation and a storm of liabilities, unexpected costs and time delays. Owner Controlled Insurance Programs (OCIP) and Contractor Controlled Insurance Programs (CCIP) are both insurance programs that offer uniform, consolidated coverage for various risks involved in large construction ...
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September is National Suicide Prevention Month

posted 09-03-2024
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National Suicide Prevention Month is the time to raise awareness about suicide in the construction industry and promote suicide prevention. Bond producers can share resources and tools with their contractor clients that are designed to foster a safe, supportive environment for the contractor’s employees. NASBP is a caring, supporting stakeholder in the Construction Industry Alliance for Suicide Prevention (CIASP), which works to educate construction professionals, organizations, and others, about suicide prevention as a health and safety priority. As the construction industry continues to have an alarming suicide rate, CIASP offers a number of ...
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50 State Survey – Defective Construction as an “Occurrence”

posted 08-26-2024
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By Saxe Doernberger & Vita, P.C. Standard commercial general liability (“CGL”) policies cover bodily injury and property damage caused by an “occurrence,” which is in turn defined as an “accident.” For claims arising out of defective construction, courts have applied different interpretations of the “occurrence” definition. There are many nuances among the states on this issue, although generally most fall into one of three analytical camps: (1) Some states hold that defective or faulty workmanship is an “occurrence,” provided the construction contractor did not intend to cause damage. This analytical framework reserves the analysis concerning whether ...
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Five of the Most Common Construction Disputes that Require Construction Lawyers

posted 08-13-2024
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By Joseph A. Davies of Smith Debnam Law Originally published August 5, 2024 Construction projects are often complex endeavors involving multiple parties, intricate contracts, and significant investments. Despite meticulous planning, disputes can arise, posing challenges that require legal expertise to resolve effectively. Here’s a look at the most common construction disputes and how and why construction lawyers play a crucial role in their resolution: What is a Construction Dispute? A construction dispute refers to any disagreement or conflict that arises during the planning, execution, or completion of a construction project. These disputes can involve ...
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Trends: “Nearshoring” Opportunities for the Construction Industry

posted 08-02-2024
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By Jerry P. Brodsky of Peckar & Abramson, P.C. and Roberto Hernandez of COMAD, S.C. Originally published June 25, 2024 “Nearshoring” is a hot topic throughout Latin America and is receiving increasing attention in the United States. We offer this introduction to “Nearshoring” and the opportunities it presents for your reference. “Nearshoring” has become increasingly relevant in the context of the globalized economy. This phenomenon describes relocating production and service operations to countries geographically close to consumer markets, instead of opting for more distant locations as in traditional “offshoring”, considering, as dominant criteria, ...
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Retainage in the Southwest: A Look into Arizona and New Mexico Retainage Laws

posted 08-01-2024
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By Craig K. Williams , David W. Wilhelmsen , and Amanda M. Manke of Snell & Wilmer LLP Originally published June 12, 2024 Retainage is a practice, standard in the construction industry, of withholding predetermined portions of payments due to the contractor until the project is complete. Developers (including project owners and their lenders) prefer requiring retainage for three primary reasons. First, retainage encourages their contractors to successfully complete construction (i.e., to attain the full amount owed to them). Second, it allows developers to maintain a pulse on construction. Third, the developers can access and apply the “retained” ...
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SBA Extends Moratorium on Bona Fide Place of Business Rule

posted 07-30-2024
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By Christopher Slottee of Schwabe, Williamson & Wyatt, P.C. Originally published June 14, 2024 On June 11, the Small Business Administration announced that it was extending the moratorium on the application of the bona fide place of business rule for 8(a) construction contracts to September 30, 2025. The bona fide place of business requirement was adopted by the SBA in 1998 and applies to 8(a) entities engaged in construction work for the federal government . The rule generally requires an 8(a) construction firm to have a “bona fide place of business” in the area in which it performs a federal construction project. The SBA adopted this requirement ...
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Industry Survey Delivers Analysis and Opportunities for Success

posted 07-30-2024
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By Carl Oliveri of Grassi Originally published June 25, 2024 More than halfway through 2024, change remains a constant for the construction and architecture & engineering (A&E) industries amid a year marked by potential growth and ongoing challenges. Despite facing a range of operational hurdles, industry leaders maintain an optimistic outlook for the remainder of the year and beyond. As noted by an industry executive, ‘Change is inevitable.’ In response to this shifting landscape, Grassi’s comprehensive industry survey of 250 Construction and A&E leaders identified key insights on revenue expectations, top risks, technology investments, ...
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10 Strategies to Improve Talent Retention in Construction

posted 07-18-2024
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By Heather Parbst of CLA Originally published July 8, 2024 One of the biggest challenges construction firms face today in building value and sustainability is attracting and retaining talent. It’s a struggle we hear from almost all our clients. This is a real problem often written off as unfixable or considered a consequence of younger generations not wanting to work hard or having poor work ethic. This stereotype doesn’t help and oversimplifies a complex issue influenced by changing work values, technological adaptation, a shifting working world with more dynamic and flexible work environments, communication differences across generations, ...
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You Can't Do That: Completion Without Notice Discharges Surety Under AIA A312

posted 07-18-2024
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By Nell M. Hurley of Ernstrom & Dreste LLP Originally published Summer 2024 In a recent Maryland case, an obligee’s failure to provide notice to the surety under an AIA A312 performance bond 1 resulted in the dismissal of the obligee’s claim where the surety learned of the default and termination only after the work had been completed by another contractor. 2 The intermediate appellate court determined that: 1. The failure was a material breach that discharged the surety’s obligation under the bond; 2. The bond language 3 did not require the surety to prove actual prejudice; and 3. The surety was prejudiced as a matter of law when it ...
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Federal Court Preliminarily Enjoins Application of Davis-Bacon Act Wages to Truck Drivers and Suppliers

posted 07-01-2024
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By Caroline M. Brooks of Smith Currie Oles Originally published June 26, 2024 On Monday, June 24, 2024, a judge of the U.S. District Court for the Northern District of Texas issued a preliminary injunction preventing the application of the Davis-Bacon Act’s wage requirements to truck drivers and material suppliers on federally funded construction projects. We previously covered the Department of Labor’s August 2023 “Updating the Davis-Bacon and Related Act Regulations” (“Final Rule”), which expanded application of the Davis-Bacon Act’s requirements for paying a minimum prevailing wage to “mechanics and laborers employed directly on the ...
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SBA Eliminates Self-Certification for SDVOSBs

posted 07-01-2024
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By Aron C. Beezley and Patrick R. Quigley of Bradley Arant Boult Cummings LLP The U.S. Small Business Administration (SBA) recently issued a direct final rule that eliminates self-certification for service-disabled veteran-owned small businesses (SDVOSBs). The SBA’s final rule—which implements a provision in the National Defense Authorization Act for Fiscal Year 2024 (NDAA 2024)—is effective August 5, 2024. Background To be awarded an SDVOSB set-aside or sole source contract, firms must be certified by SBA through the Veteran Small Business Certification (VetCert) Program. Currently, firms that do not seek SDVOSB set-aside or sole source contracts ...
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Enforceability of Pay-if-Paid Clauses in Construction Subcontracts: Mid-Atlantic Region

posted 06-26-2024
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By Jessica A. duHoffmann and Jonathan “Jon” R. Neri of PilieroMazza Originally published May 10, 2024 Pay-if-paid clauses are conditional payment provisions regularly included in construction subcontracts. The intent of these clauses is to shift the risk of loss from a prime contractor to its subcontractors by making a project owner’s payment to the prime contractor a condition precedent to the prime contractor’s obligation to pay its subcontractors. [1] The enforceability of pay-if-paid clauses is a frequent topic of dispute, becoming more complicated when a prime contractor posts a payment bond protecting subcontractors and suppliers from non-payment ...
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