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By Lauren P. McLaughlin and Raziye “Raz” Andican of Smith Currie Most contracts address the manner in which retainage will be withheld, reduced, and released. As such, it is imperative that construction industry participants comply with their rights and obligations outlined in the contract as it pertains to retention. Keep in mind, however, that industry groups have lobbied in various jurisdictions for legislation governing retainage on both public and private projects. This means that it is vital that companies are not only aware of what their contract says regarding retainage, but also, they must keep abreast of retainage laws in the jurisdictions in ...
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By Lauren P. McLaughlin and Raziye “Raz” Andican of Smith Currie Most lawsuits involving project participants include claims that one party violated the prompt payment statutes of the governing jurisdiction. As most readers know, prompt payment statutes are in place at the federal and state level to require timely payments to contractors (that is, that a party be paid within a certain number of days from receipt of funds from the owner). Because every jurisdiction has different requirements and timelines as to when a contractor is entitled to receive funds, the chart below provides the prompt payment statutes applicable to projects in the District of ...
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Written by Brian R. Gaudet of Kilpatrick Townsend Published May 3, 2021 A group of industry leaders recently came together as a panel to discuss “Public-Private Partnerships: Opportunities & Challenges for the Construction Industry.” This event, presented by the Construction Litigation Committee of the ABA Section of Litigation, reviewed public-private partnerships, distinctions between public and private construction projects, risks associated with the procurement process, and common contractual requirements relating to performance bonds, workforce requirements, public record laws, and reporting and audit rights. Panelist included: Brian Gaudet ...
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By Richard Reizen and Patrick Johnson of Gould & Ratner LLP Published April 26, 2021 Due to reduced production during the COVID-19 pandemic, increased housing demand and climate events such as the Texas freeze and subsequent utility crisis, construction material costs have increased dramatically over the past year. According to Cummings, a nationally recognized consulting firm, lumber and plywood prices have risen 56% in the last year, copper and brass over 30%, steel over 10% and precast concrete over 4%.  In March, The Wall Street Journal noted that crude oil, “a starting point for paint, drain pipe, roof shingles and flooring,” was also up around ...
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By Risteard de Paor of Dentons Published April 27, 2021 The construction industry is one of the most vulnerable industries to the effects of climate change due to its reliance on outdoor activities and labor. Forty-five percent of construction projects are affected by adverse weather, on a global level, resulting in billions of dollars in additional costs each year, mainly due to expensive schedule overruns. 1 A recent systematic study confirmed that the most impactful weather events on construction projects are extreme temperatures (and humidity), precipitation and high winds. 2 Each can lead to decreased productivity or render certain tasks on the critical ...
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NASBP Attorney Advisory Council participant Timothy Heffernan wants surety bond producers and their construction clients to beware of an emerging legal risk to surety professionals . “For the first time sureties are the focus of a Department of Justice effort to pursue violations of the False Claims Act,” said Heffernan, who is a Senior Partner with Watt, Tieder, Hoffar, & Fitzgerald, L.L.P. Heffernan will deliver a presentation on the risks at the 2021 Associated General Contractors of America (AGC) Surety Bonding and Construction Risk Management Conference on June 2-4, 2021, at the Hyatt Regency Coconut Point Resort and Spa in Bonita Springs, Florida. ...
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By Niel Franzese of Robinson+Cole Published April 23, 2021 Anyone monitoring construction industry trends is aware that the prices of raw construction materials, particularly steel and lumber, have been rapidly increasing since early 2020. Earlier this year, Associated Builders and Contractors reported that iron and steel prices were up 15.6 percent from January of 2020 to January of 2021, and that softwood lumber prices had increased by as much as 73 percent during the same period. The reasons for these price increases are varied (ranging from supply chain and shipping disruptions to the increased demand for new home construction), and many have their ...
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By Tim Fandrey and Trenton Patterson of Gray Reed Attorneys & Counselors Published April 21, 2021 It has been months since you have been paid and the general contractor or the owner continues to demand that you perform extra work, perform in changed conditions or work on a compressed timeline with no promise of payment in sight. At this point you have a decision to make. Do you continue to perform work and submit claims for the extra work and changed conditions? Or do you suspend work or terminate the contract? Termination or Suspension Suspending or terminating performance might have emotional appeal and appear to be attractive options at first ...
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By Luke C. Tompkins of Ward and Smith, P.A. Published April 21, 2021 Construction projects involve a tiered relationship, which consists of (a) the project owner, (b) a general contractor hired by the owner who manages the construction project as a whole, (c) first-tier subcontractors hired by the general contractor to complete discrete portions of the project work, and (d) lower-tier subcontractors and suppliers who are hired to complete portions of the upper-tier subcontractors work or to supply materials to upper-tier subcontractors. Generally, under this tiered system, the owner pays the general contractor, the general contractor pays each of its ...
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By David A. Mawhinney and Jon S. Barooshian of Bowditch Published April 20, 2021 The Paycheck Protection Program was one of the more innovative and written-about of the CARES Act’s fiscal stimulus packages. The U.S. Treasury and Small Business Administration (SBA) leveraged the private banking sector to deliver capital infusions to thousands of businesses and independent contractors. As PPP winds down (for good?) on June 1, and businesses apply for forgiveness, what can you expect from a SBA audit? Here are five things to understand. 1. WHO IS AUDITED? The SBA may review any borrower’s PPP loan at any time. Nevertheless, the Treasury and SBA have ...
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Hot off the press! NASBP is pleased to announce that the NASBP membership now has access to a set of three in-depth articles on joint ventures in construction . This month NASBP published in the NASBP magazine, Surety Bond Quarterly, the final article in a series of three addressing joint ventures in construction . Co-authors Michael C. Zisa and Joshua A. Morehouse of the NASBP Attorney Advisory Council firm Peckar & Abramson wrote the first article in the set to provide an introduction to joint ventures, with an explanation of the benefits and risks of this arrangement for contractors and how to choose a joint venture partner. The second article ...
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There are just two weeks until the 2021 NASBP Virtual Annual Meeting Event ! Join your NASBP colleagues on Wednesday, April 28 from 1:00 p.m.-4:00 p.m. Eastern for a full slate of fun and informative events. The 2021 NASBP Virtual Annual Meeting Event will kick off with remarks from outgoing President Mark Munekawa, including the announcement of the 2021 Bruce T. Wallace Award and John “Jack” J. Curtin, Jr. President’s Award winners. Note that the winners of the Surety Industry Awards will be shown on-screen during the break. Then, watch two special sessions focused on the future, starting with a roundtable discussion from the NASBP Officers on future plans ...
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By Jordan Mark Kelso and Jonathan W. Hugg , Schnader Harrison Segal & Lewis LLP The most recent federal emergency legislation expands eligibility for small business loans, and provides a deadline extension to May 31, 2021, giving small businesses time to take action. It is crucial for business owners to stay up to date regarding their rights and potential benefits under the seemingly endless deluge of laws responding to the last year of economic turmoil. One recently updated initiative is the federal Paycheck Protection Program (“PPP”). The PPP features a loan, backed by the U.S. Small Business Administration (“SBA”), intended to incentivize small ...
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By Sarah Carpenter of Smith, Currie & Hancock LLP Published March 15, 2021 The State of Maryland has several public-private partnerships projects (P3s) planned or already in progress, including the Purple Line light-rail project and the I-495 Capital Beltway/I-270 toll lane project. As Maryland continues to look to P3s as a vehicle to address the State’s infrastructure needs, it is important for contractors and subcontractors to understand the P3 structure and the significant ways in which it differs from more traditional procurement models. History Prior to 2013, Maryland’s Public-Private-Partnership law did not provide a detailed framework for ...
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By Anthony “Bud” Stewart of Dayhill Group Does the Lien Release in your hand “tell a story”? Is there a tale that you need to hear? Is there trouble brewing? Depending upon the viewer’s perspective, a Lien Release is seen as a receipt of payment, a protection from a lien, or a defense against a payment claim. A properly executed Lien Release is all of these things. The party executing the release is acknowledging the receipt of payment and stating that the payment was credited to the contractor’s obligations on the project which is identified on the Lien Release. This is basic. When I evaluate a Lien Release, I demand that it function as intended, but ...
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By David Jean , CPA, CCIFP, CExP, of Albin Randall & Bennett Published March 8, 2021 Business owners from all walks of life look for ways to increase cash flow and maximize savings in times of economic uncertainty. For construction companies today, hiring new employees, investing in new products and services, or expanding operations may have drifted out of focus or feel out of reach. Wouldn’t it be great to have access to immediate cash and dollar-for-dollar tax savings to reduce tax liability? With the R&D Tax Credit, this may not be wishful thinking. The federal R&D Tax Credit was established to keep jobs and innovative ideas in the U.S. and ...
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By Joshua E. Holt of Smith Currie Published March 19, 2021 In 2012, Virginia’s Joint Legislative Audit and Review Commission (“JLARC”) issued a report finding that worker misclassification—where an employer improperly classifies its employees as independent contractors—is a pervasive problem in the Commonwealth. The report focused, in particular, on incidents of worker misclassification in the construction industry. In 2020, Virginia Governor Ralph Northam signed into law a raft of employee-friendly legislation aimed at tackling the worker misclassification problem identified in the JLARC report. Virginia thus joins states like Delaware, New York, Illinois, ...
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By Jodie Clark McDougal of Davis Brown Law Firm Published March 16, 2021 With high rates of fatal and non-fatal injuries, the construction industry is one of the most hazardous, but many do not realize that the safety and health concerns go beyond job site accidents. People in the construction industry are particularly susceptible to mental health issues and suicide, and the COVID-19 pandemic has increased the rates of mental health issues across the industry and country as a whole. As reported by the NAHB , more construction workers die by suicide each day than all workplace-related fatalities combined, and per a CDC  report , the construction and ...
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We’re all ready to get out of the house after the winter and as COVID-19 vaccines become more widely available. Wouldn’t it be great to go to Summer 2021 Surety School and spend time with NASBP colleagues for the first time in over a year while also earning continuing education credit? The NASBP William J. Angell Surety School offers expert and comprehensive training for surety professionals with varying levels of knowledge and expertise. This prestigious education program provides an opportunity to establish professional relationships with industry peers. The Summer 2021 Surety School is being held August 1-6, 2021 at the Charlotte Marriott City Center in ...
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By Carl Oliveri of Grassi Advisors & Accountants Bond producers and their construction clients should be aware of important questions about tax planning strategies and incentives available to contractors this year. What are some of the most overlooked tax incentives in the construction industry? One overlooked credit for the construction industry is related to research and development. When most people hear the term R&D, there is this preconceived notion of white lab coats. But R&D credits, which are wage based, could be applicable for any company that is innovative in its deliverable. For a construction contractor, investments in ways to ...
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