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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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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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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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By Katherine B. Burrows and Eric Valle of PilieroMazza Originally published May 14, 2024 You’re a federal government contractor who just won a contract award. But, before you pop the champagne, there’s a hiccup: a competitor filed a bid protest challenging your award. “Oh, well,” you think, “the government can surely defend my award; there’s no reason for me to get involved.” Think again. This blog covers why contractors should step in and intervene when a bid protest challenges their awarded contract. It’s not just about safeguarding your contract; it’s also about ensuring you get compensated for your hard work. In a rare, published opinion [1] ...
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By Joseph Natarelli and Anirban Basu of Marcum LLP Originally published May 1, 2024 NOT JUST A SERVICE ECONOMY In recent years, there has been a shift in the economic landscape of the United States, challenging the long-standing narrative of America as a predominantly service-driven economy. The current surge in American industrial activity, marked by historic highs in manufacturing production, reflects a nation reasserting itself as an industrial powerhouse. This resurgence is fueled by strategic governmental policies, evolving corporate philosophies, and technological innovations reconfiguring the country’s production capabilities. To understand ...
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By TL Fahring of Freeman Law When the Texas Tax Code provides an exemption from sales and use tax, you’d think everything would be straightforward, right? Unfortunately, it’s sometimes not that simple, especially when it comes to construction contracts. In order to figure out what’s exempt and what’s not in this area, you often have to navigate the tricky interactions between the sales and use taxation of construction contracts and exemptions more generally. Texas Sales and Use Tax and Construction Contracts, Generally Let’s recap the basics. Sales of tangible personal property and taxable services in the state of Texas are subject to Texas sales or ...
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By Slates C. Veazey and R. Sumner Fortenberry of Bradley Arant Boult Cummings LLP Originally published May 13, 2024 Construction contracts for private projects will soon be subject to a new retainage law in Mississippi. On April 19, 2024, Gov. Tate Reeves approved SB 2762 into law, and after July 1, 2024, most construction contracts on projects in Mississippi will comply with a set of retainage laws similar to those that have governed public projects for decades in the Magnolia State. Specifically, this new law allows an owner, contractor, or subcontractor to retain contract proceeds from installment payments pending final completion. However, the ...
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By Lisa M. Ricciardi of Marcum LLP Originally published May 1, 2024 As a business owner, you invest your time, energy, and resources into building a successful venture. Protecting your hard work from unexpected setbacks is crucial. That’s where business insurance comes in. In this article, we’ll walk you through the key types of business insurance, from workers’ compensation to cybersecurity, in a light and easy-to-understand manner. So, let’s dive in and ensure your construction business is well-equipped to handle any curveballs that come its way! Workers’ Compensation: Taking Care of Your Valued Team Workers’ compensation insurance is a safety net ...
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By Stephanie Snyder-Zuasnabar of Gray Reed Originally published April 4, 2024 Many construction contracts contain some version of a “differing site conditions” clause. AIA’s A201 general conditions, as well as in the EJCDC equivalent, contains a changed site condition clause. It also appears in most state DOT specifications and federal government construction contracts. Generally, this provision provides for a change order (subject to procedural compliance) when the contractor encounters (i) subsurface or other concealed conditions that differ materially from the conditions indicated by the contract documents or (ii) unknown physical conditions of an unusual ...
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By Stephanie Cooksey of Peckar & Abramson, P.C. Originally published May 6, 2024. This article was written for the Texas Contractor and first appeared here . Imagine a project where you are unable to reach final completion due to an unresolved subcontractor claim. If the project owner is responsible for the claim, and both the owner and subcontractor are entrenched in their positions, how would you resolve this dispute? The default option is a three-party lawsuit where the subcontractor sues you in your capacity as general contractor. By denying the claim, you bring the owner into the lawsuit as a liable party to the subcontractor’s claim. This ...
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By Jennifer Harris and Stephen E. Irving of Peckar & Abramson, P.C. Originally published April 17, 2024 On January 10, 2024, the Wage and Hour Division of the U.S. Department of Labor issued its long awaited final rule, Employee or Independent Contractor Classification Under the Fair Labor Standards Act . 1 The rule addresses how to determine whether a worker is properly classified as an employee or independent contractor under the Fair Labor Standards Act and overturns the March 8, 2021 Independent Contractor Rule. According to the agency, “[t]his rule will help to ensure that workers who are employees are paid the minimum wage and overtime ...
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By Joseph Haughney of Smith Currie Originally published April 26, 2024 While contractors incur the extra costs involved, agencies have slowly begun to implement Build America, Buy America Act Pub. L. No. 117-58 (“BABA”) requirements after the final Office of Management and Budget (“OMB”) guidance was released last October in response to Executive Order (“EO”) 14005, Ensuring the Future Is Made in All of America by All of America’s Workers. This article highlights how the FAA is implementing BABA requirements and waivers under those authorities. As the FAA implements BABA, contractors will have to seek much more information, much earlier on, from their ...
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By Sheila E. Thompson of Rosenberg & Parker of Canada, Inc. The Canada Border Services Agency (CBSA) has established The Canada Border Services Agency Assessment and Revenue Management (CARM) project as a multi-year initiative to transform the collection of duties and taxes for goods imported into Canada. The goal is to modernize and streamline the process of importing commercial goods. The CARM project will affect all importers into Canada. CARM Release 1 has already occurred with the launch of the online Client Portal in 2021. If they have not already done so, importers are encouraged to onboard with the portal prior to the CARM Release ...
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By Robert G. Ruggieri of Cohen Seglias Pallas Greenhall & Furman PC Originally published April 9, 2024 Construction law is a complex field that intersects with various other industries and legal fields, one being the maritime industry. In nearly twenty years of practicing construction law, I have often experienced the connection between these sophisticated areas of law and the implications of each on various projects, such as the construction of docks, breakwaters, piers, bridges, dredging and beach nourishment projects. In this blog post, we will explore the intricate relationship between these two legal realms by diving into a primer on maritime liens. ...
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By G. Scott Walters , Kenny R. Cantrell, III , and Erica Maria Alvarado Gomez of Smith Currie & Hancock LLP Originally published April 30, 2024 On April 23, 2024, the Federal Trade Commission (“FTC”) issued its final rule banning nationwide a large majority of non-compete agreements, with a few, limited exceptions (the “Rule”). The Rule not only renders future non-compete agreements unenforceable, but it invalidates existing non-compete agreements for many workers. The Rule will become effective 120 days after publication in the Federal Register—most likely in late August 2024. The Rule potentially affects employers significantly, including construction ...
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By Jonathan Landesman and Lauren N. Bess of Cohen Seglias Pallas Greenhall & Forman PC Originally published April 24, 2024 In a seismic decision on April 23, 2024, the Federal Trade Commission (FTC) voted 3-to-2 to ban noncompete agreements for all workers, with a narrow exception for senior executives. This new rule, set forth in a 570-page action summary, is scheduled to take effect in just 120 days. Opponents of the rule, including industry groups such as the Chamber of Commerce, say it will violently disrupt longstanding employment practices and pose unprecedented challenges to businesses across all sectors. While proponents of the rule, including ...
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By Cavan S. Boyle of Ernstrom & Dreste LLP Originally published Spring 2024 Last November, New York’s private Prompt Payment Act (“PPA”) for commercial construction projects of more than $150,000 was modified, making changes to General Business Law §§756-a and 756-c. 1 Legislative sponsors sought to rectify the prior law’s failure to facilitate timely final payment to contractors or adequately limit retainage, which often subjected contractors (and subcontractors) to long wait-times for payment and caused costly, avoidable disputes. 2 Thus, the new PPA provisions endeavor to reduce retainage and permit final invoicing earlier than previously provided. ...
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By Kenny R. Cantrell, III of Smith, Currie & Hancock LLP Originally Published: April 2, 2024 The United States faces increasingly sophisticated cyber campaigns that threaten the public and private sectors’ security and privacy. The public and private sectors have been rocked by vulnerabilities. Such examples include the December 2020 ransomware attack on SolarWinds that paralyzed multinational companies and permanently locked people around the world out of tens of thousands of computers, and the Colonial Pipeline ransomware attack on May 7, 2021 that halted the pipeline system’s access to servers and caused widespread fuel shortages. Government contractors ...
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By Nell M. Hurley of Ernstrom & Dreste LLP Originally published Spring 2024 A prudent contractor knows that limitations periods for suit against a non-paying owner can be set forth in several places. New York has a statutory six-year limitation period for breach of contract actions, but shorter limitations periods are common in construction contracts, particularly for public work, whether spelled out directly in the contract or by other laws relating to the public entity. There may also be notice provisions in the contract, or by law, that must be timely fulfilled by the contractor as a condition precedent to commencing a lawsuit. Failure to satisfy ...
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By Ken Stallard and Kelly Cousoulis of Carr Maloney P.C. Originally published April 1, 2024 Similar to its neighbors in Maryland and the District of Columbia , Virginia has analyzed its treatment of the “pay-if-paid” or “pay-when-paid” clauses in construction contracts. Virginia previously allowed pay-if-paid clauses in construction contracts that allowed a general contractor to defer payment to its subcontractors until the general contractor was paid by the owner of the project. This changed with the passage of amendments to Virginia Code § 11-4.6 that became effective in 2023. A typical pay-if-paid clause in a subcontract might read: “The Parties ...
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