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By Carmen Calzacorta , Omar Contreras , David Ebel , Mark Long , Savannah Wolfe , Dan Eller , Christopher Slottee , Craig Russillo , Charmin Shiely , Kenneth Katzaroff , and Russel Robertson of Schwabe Williamson & Wyatt PC Published November 6, 2020 Starting around October 26, 2020, the Small Business Administrations (the “SBA”) asked some Paycheck Protection Program (“PPP”) lenders to provide certain questionnaires to PPP borrowers with loans over $2 million. The questionnaires are not on the official SBA sites. There are two questionnaire forms: Form 3509  for for-profit borrowers and  Form 3510  for non-profit borrowers. We do not ...
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By Anna Nagornaia of Wendel Rosen LLP Published November 12, 2020 Quick Recap:  100% of the PPP loans (principal and interest) are eligible to be forgiven, so long as borrowers used the money to maintain their payrolls at about the same levels as before the COVID-19 outbreak and spend their PPP loan within the PPP guidelines. [1] Forgiveness Period You may submit a loan forgiveness application any time before the maturity date of your PPP loan, which is either 2 or 5 years from the loan’s origination, depending on the agreement with your lender. Extended Deferral Period The Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”) ...
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By Marissa Pepe Turrell and Daniel McPadden of Marcum LLP Published November 2, 2020 Many construction companies have been able to weather the economic shutdown caused by the coronavirus pandemic, but the impact on the industry is still unfolding. The classification of construction as an essential activity in some states and pre-existing backlogs allowed many operators to mitigate the negative impacts early on. However, the deleterious longer-term effects are now hitting contractors as they look forward. As reported in the Second Quarter 2020 Marcum Commercial Construction Index , contractors recorded an average of 7.8 months of work under contract in ...
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By Jacob W. Scott and Erik M. Coon of Smith, Currie & Hancock LLP Published on November 11, 2020 After months of ambiguous and constantly-shifting guidance, the Small Business Administration (SBA) has finally published information hinting at how it will determine whether Paycheck Protection Program (PPP) borrowers certified in good faith that economic uncertainty made the PPP loans necessary. As we noted in  May , SBA walked back what borrowers perceived as threats of prosecution for inadvertently making certifications of economic uncertainty, and provided safe harbors for loans under $2 million and for borrowers that made erroneous certifications ...
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By Joe Bailey , Kevin R. Feldis , Teri A. Lindquist , Andy Smetana , and Alexander O. Canizares of Perkins Coie LLP Published November 4, 2020 Over the course of the last week, the Small Business Administration (SBA) has reportedly begun quietly questioning borrowers who had received Paycheck Protection Program (PPP) loans about the “necessity” of their loans. On October 26, 2020, the SBA filed in the Federal Register a notice  (the Notice) seeking approval from the U.S. Office of Management and Budget (OMB) for two forms of questionnaires, starting a 30-day comment period. Form 3509 is intended for for-profit borrowers, and Form 3510 is intended ...
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By Rick Krueger of CliftonLarsonAllen Published November 3, 2020 Last week, the Small Business Administration (SBA) issued a notice related to two new forms developed to collect information for determining the necessity of a Paycheck Protection Program (PPP) loan for borrowers with loans in excess of $2 million. SBA Form 3509 – Loan Necessity Questionnaire (For-Profit Borrowers)  and  SBA Form 3510 – Loan Necessity Questionnaire (Non-Profit Borrowers)  are expected to be completed by approximately 42,000 borrowers and 10,000 borrowers, respectively. Until these forms are published on the SBA website, they should be considered as drafts, subject to change. ...
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By David Tupper , Richard Bell , Tom Wagner and Mackenzie Comand (Articling Student) of Blake, Cassels & Graydon LLP Published November 3, 2020 The Government of Alberta recently introduced the Builders’ Lien (Prompt Payment) Amendment Act, 2020 (Bill) in the Alberta Legislature. The Bill proposes, among other things, the introduction of prompt payment legislation and a formal adjudication process, following similar legislation from elsewhere in Canada, including Ontario and Saskatchewan. The proposed amendments predominantly fall into three categories: Changes to the existing holdback and builders’ lien process. New prompt payment rules. ...
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By Sarah Auchterlonie , Gregory W. Berger , Gregory A. Brower , Alissa H. Gardenswartz , Reese Goldsmith , Harold Hancock , Mitchell J. Langberg , Sarah M. Mercer , Mark L. Pryor , and Russell W. Sullivan of Brownstein Hyatt Farber Schreck Published November 3, 2020 Last week, the Small Business Administration (SBA) began asking SBA Paycheck Protection Program (PPP) lenders to issue over 50,000 loan necessity questionnaires to borrowers that received $2 million or more in funds from the PPP. The information collection is extensive and reaches to private and public company borrowers. Also, both nonprofit and for-profit borrowers received questionnaires, ...
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Demystifying construction contract surety bonds and protecting your projects from unforeseen circumstances Contract surety bonds provide essential protection for key parties involved in a construction project. They secure both project performance and payment of project-related costs in the event of unforeseen circumstances. Despite this, many projects are not bonded—potentially creating significant risks for project owners, subcontractors, and suppliers. One reason surety bonds are not used more often might be the perception that securing them is a complicated, burdensome process. That is unfortunate, as the benefits far outweigh the effort necessary. ...
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By Luke C. Tompkins of Ward and Smith, P.A. Published October 23, 2020 Liquidated damages are a sum specified in a contract as the measure of recovery in the event of a breach of the contract. Liquidated damages provisions are common in construction contracts to guard against damages that the owner or a contractor might suffer if a project is delayed beyond the completion date set forth in the contract. These provisions appear in both public and private construction contracts. Oftentimes, the owner of a construction project will include a liquidated damages provision in the prime contract with the general contractor. The provision might state, for example, ...
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By Emily M. Martin and Michael C. Kelley of Shutts & Bowen LLP Published October 27, 2020 Complicated by an unprecedented global pandemic, businesses in Florida’s construction industry have been further burdened by the anticipated challenges of an active 2020 hurricane season. Since June 1 st , the industry has been braced for threats to construction sites and businesses while responding to the health and safety requirements necessary to manage COVID-19. Now facing the final stretch of hurricane season and a looming threat from Tropical Storm Zeta, Florida construction businesses should remain vigilant in their storm preparations with protocols ready ...
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By Erik M. Coon of Smith Currie & Hancock LLP Published October 19, 2020 Generally, a contractor on a federal government contract may be entitled to an equitable adjustment to the contract time, price, or both, if the contractor performs work beyond that required by the contract without a formal change order, and such work was informally ordered by the government or caused by government fault or conduct. Two recent ASBCA decisions underscore the point that proving governmental fault or conduct establishing a constructive change can come in different shapes and sizes, including action and inaction by a federal government contracting official. In Raytheon ...
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By John W. Davidson of Nexsen Pruet Published October 22, 2020 “This isn’t what I expected.” I hear that comment frequently from people that do not often participate in mediations. If you are involved in the construction industry, you will very likely have to participate in a mediation at some point to try to resolve a dispute. It might be a construction defect case, a payment dispute, a claim involving an ongoing project, or a myriad of other issues. Lawyers participate in mediations all the time. Clients, usually not so much. In fact, many clients participate in very few mediations and may have no idea what to expect. This article will help with that. ...
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NASBP is excited to announce the final event in the 2020 Virtual Event series:  November Virtual Event: Managing Stress and What’s Next! Join us on Tuesday, November 10 from 1:00 p.m. to 3:25 p.m. ET for two timely keynote sessions. To kick off the Virtual Event, NASBP Immediate Past President John Bustard will welcome attendees and offer opening remarks.  The first keynote session is titled, "What Every Contractor and Surety Professional Needs to Know About the Election Results And Plenty More." Don't miss this dynamic panel of construction industry lobbyists who will share their thoughts on state and federal election results and the ...
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By Mary Ellen Schill , Amy E. Ebeling , and Benjamin E. Streckert of Ruder Ware Published October 9, 2020 Today by Interim Rule the Treasury Department and Small Business Administration jointly made it much easier for some Paycheck Protection Program (“PPP”) loan borrowers to get forgiveness for their loans.  If the PPP loan amount is $50,000 or less, the borrower can get full forgiveness to the extent that the loan proceeds were used for purposes permitted under PPP.  Such borrowers can ignore any reductions in full-time equivalent employees or reductions in employee salary or wages that would otherwise apply.  Under the PPP, borrowers who have spent ...
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By Carmen Calzacorta , Matthew Bisturis , Dan Eller , Lisa Lowe , June Wiyrick Flores , Samantha MacBeth , and Thomas Tongue of Schwabe Williamson & Wyatt PC Published October 6, 2020 Believe it or not, we are now in the final stretch of 2020. There are many things still to do and plan for before the end of the year. When reviewing your year-end estate planning or business transition concerns, there are several things to contemplate and review, such as year-end gift giving, valuations, and tax considerations, including issues specific to those who took out Paycheck Protection Program (“PPP”) loans. Below is a list of items we’ve identified that ...
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By Candace L. Matson of Sheppard Mullin Published September 29, 2020 Contractors performing work in California are required to be licensed by the California State License Board (“CSLB”).  Cal. Bus. & Prof. Code §7065.  Except for sole proprietors, contractors are typically licensed through “qualifiers,” i.e., officers or employees who take a licensing exam and meet other requirements to become licensed on behalf of the contractor’s company.  Contractors who perform work in California without being properly licensed are subject to a world of hurt, including civil and criminal penalties ( see, e.g., Cal. Bus. & Prof. Code §§ 7028, 7028.6, 7028.7, ...
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By Matthew Boland, CPA of McCarthy & Company, PC Published August 2020 Many contractors were relieved that the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) on June 3, 2020. It grants a one-year effective date delay for certain companies and organizations applying the revenue recognition and lease accounting standards. Early application continues to be permitted. Revenue from Contracts with Customers The deferral of the effective date applies to certain entities that have not yet issued their financial statements (or made the financial statements available for issuance) reflecting the adoption of ASU ...
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By George M. Nicholos, Esq. of Vandeventer Black LLP Published September 30, 2020   The Architecture Billings Index (ABI) is a composite index derived from monthly report surveys from American Institute of Architects (AIA) member firms located throughout the United States reporting on construction project activity the AIA refers to as “Work-on-the-Boards” (projects in the planning and design processes).  The data is compiled by the AIA’s Economics & Research Group, using a first-hand survey index from architectural firms as an economic indicator of nonresidential construction activity.   The data analyzes nonresidential construction activity ...
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By Matthew E. Cox and Jacob W. Scott of Smith, Currie & Hancock LLP Published on October 2, 2020 In response to several common questions regarding the Families First Coronavirus Response Act (FFCRA), we have prepared the following answers.[1] The FFCRA applies to businesses with fewer than 500 employees. Employers with fewer than 50 employees may be exempt if compliance with the FFCRA would jeopardize continued business viability. The Act provides for certain paid sick leave and paid family leave benefits for employees who are unable to work due to COVID-19. Question: Are we obligated to pay employees who have tested positive for COVID-19? ...
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