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The U.S. Small Business Administration (SBA) is celebrating the 50th anniversary of the Surety Bond Guarantee Program (SBG) with a two-day virtual conference on Thursday, September 24 and Friday, September 25. Registration is free! NASBP is proud to be a sponsor of this program. In the SBA Surety Bond Guarantee Program, the SBA guarantees surety bonds to surety companies that agree to bond small businesses that might not be able to qualify for a bond in the standard market. Bond producers help these small businesses navigate the SBA bond guarantee program, matching them with a participating surety company and getting them on the road to achieving surety ...
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By Jodie McDougal of Davis, Brown, Koehn, Shors & Roberts, P.C. Published September 8, 2020   We are hearing about a budget pinch from many homebuilder and general contractor clients tied to the substantial increases in the cost of lumber and other materials;  HBA Iowa reports  about an 80% increase in lumber costs since mid-April. As the cost of materials for build projects soars, builders and contractors should review their contracts carefully to see if they have options to get some or all of the increased costs covered by the owner and consider revising their future contracts to help protect themselves against abnormal material cost increases.   ...
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By Jeremiah M. Welch of Saxe Doernberger & Vita, P.C. and Chad Hall, R-T Specialty Published July 10, 2020 Project-specific policies sold to the construction industry routinely include ISO form CG 21 44 07 98, entitled “Limitation of Coverage to Designated Premises or Project”, to identify the covered construction project. Care must be taken in the use of this form, however, to avoid granting more coverage than the insured and insurer intend. The CG 21 44 07 98 includes a schedule: The schedule is followed by the following limiting language: This insurance applies only to “bodily injury”, “property damage”, “personal and advertising injury”, ...
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By Jennifer Grippa of Miles Mediation & Arbitration Published August 25, 2020 On August 5, 2020, Georgia Governor Brian Kemp signed a new law, Senate Bill 315, changing Georgia’s lien law statute, O.C.G.A. 44-14-366. The new statute, effective January 1, 2021, makes clear that lien waivers only waive lien or bond rights against the property and do not waive the right to file a lawsuit for non-payment. The change in the law resulted from a 2019 decision by the Georgia Court of Appeals in ALA Constr. Servs., LLC v. Controlled Access, Inc., 351 Ga. App. 841, 833 S.E.2d 570 (Ga. Ct. App. 2019). In ALA Construction, the contractor signed an interim lien ...
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By William S. Bennett of Saxe Doernberger & Vita, P.C. Published July 8, 2020 From structural collapses to fires, the construction industry has experienced a number of high-profile catastrophes over the past decade. These disasters test the mettle of even the most experienced risk professionals and the strongest insurance programs. Issues can arise in all facets of the company’s contracts and insurance policies, and dealing with the aftermath is an extensive and demanding process that can involve many players. As overwhelming as the task may seem, however, it is possible for general contractors to get through the disaster with minimal uncovered exposure ...
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The next event in the NASBP Virtual Event series is here! The September NASBP Virtual Event: Preparing for the Future Nationally and Regionally will be held on Wednesday, September 23 from 1:00 p.m. to 4:20 p.m. Eastern time. This NASBP Virtual Event will feature two keynote sessions and three breakout sessions with a regional focus. NASBP First Vice President Tracy Tucker of Tucker Agency, Ltd. will provide the opening address and welcome everyone to the September NASBP Virtual Event. The first keynote session will be titled " Chapters 7, 11, and 13 Are Not Just for Books: Understanding Bankruptcy as a Surety Professional " and will be ...
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By Nathan Cosh of FTI Consulting Published August 11, 2020 Time and money are often seen as going hand in hand in UK construction contracts. In a typical employer contractor relationship, if the project is delayed by matters for which the contractor is responsible (non-excusable delay events), then the contractor may find itself liable to the employer for damages. Damages payable to an employer for late completion of a construction project are commonly referred to as liquidated damages. They are typically expressed as an amount per week and should represent an estimate of the losses the employer will suffer as a result of a delay to the completion of the ...
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By John A. Greenhall and Lisa M. Wampler of Cohen Seglias Pallas Greenhall & Furman PC Published August 20, 2020 Last summer, we advised that the Pennsylvania legislature was considering a bill that would require all construction industry employers, on both public and private projects, to use the E-Verify program operated by the Department of Homeland Security to determine the eligibility of their employees to work in the United States. Pennsylvania House Bill 1170, known as the Construction Industry Employee Verification Act (Act 75) , goes into effect on October 7, 2020. If you are an individual, entity, or organization in the construction industry ...
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By Alexander R. Bilus , Kelsey Marron , and Christie R. McGuinness of Saul Ewing Arnstein & Lehr LLP Published August 27, 2020 As the country struggles with COVID-19, many companies have applied for and received funds under the CARES Act and its Payment Protection Program (“PPP”). Those companies must understand there are significant risks tied to their receipt of federal money. Indeed, in June the United States Senate confirmed Brian D. Miller as the Special Inspector General of Pandemic Recovery (the “SIGPR”). As Saul Ewing Arnstein & Lehr attorneys have previously explained , the SIGPR’s primary duty is to audit and investigate the distribution ...
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By Scott Jaunich of Downs Rachlin Martin PLLC Published August 24, 2020 PPP Enforcement: It’s Not Funny[ 1 ] While many who have accepted PPP loans now consider the forgiveness aspects and process, be mindful of federal enforcement. To date, the Justice Department has filed 36 PPP fraud cases, charging about 51 defendants. Defendants are charged with bilking taxpayers out of tens of millions of dollars. Luckily, the Feds have recovered a large part of the loan proceeds already. While the cases may seem extreme, federal enforcement is never a forgone conclusion. Wrongful death In July, a fugitive who allegedly faked his own death to avoid prosecution ...
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By David G. Jordan and Jeffrey J. Vita of Saxe Doernberger & Vita, P.C. Published August 25, 2020 To state the obvious, the global “COVID-19” pandemic has resulted in substantial financial losses for many businesses and furloughed workers. Forced shutdowns, lower consumer demand, and reduced capacity/shortened hours of operation have translated to lower revenues for many companies, causing them to make hard decisions. These tough choices include cost-cutting measures (layoffs or furloughs), bankruptcy restructuring, or even permanent closure. Numerous articles, including articles from this office, have chronicled the challenges and associated ...
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By Jonna N. Summers of Porter Hedges LLP Published August 18, 2020 The subcontractor did everything right: it did the work, but did not get paid, and thereafter properly perfected a lien. Now, the subcontractor has an opportunity to settle with the general contractor or even its subsequent bankruptcy trustee. The subcontractor needs to proceed with caution to avoid losing its lien against the owner. In Texas, a subcontractor enjoys no direct lien against the owner’s property but must instead rely upon its statutory, derivative rights to collect funds due by the owner to the contractor or, failing that, to impose a lien on the property. There are two statutory ...
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By Lori Ann Lange and Sabah Petrov of Peckar & Abramson, PC Published on August 21, 2020 In our previous alert , we discussed the expansion on the Section 889(a)(1)(B) ban on certain Chinese telecommunications equipment and services to contractors and subcontractors who use the equipment and services in their internal operations. Effective August 13, 2020, federal agencies were prohibited from procuring, obtaining, extending, or renewing a contract with a contractor that uses equipment, systems, or services that use covered telecommunications equipment or services as a substantial or essential component or as critical technology, unless an exception ...
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By David A. Senter of Nexsen Pruet Published August 10, 2020 One of the biggest risks contractors and subcontractors face on construction projects is liability for consequential damages, although many of them may not even know about that risk, much less understand it. Consequential damages are damages which flow indirectly from a breach of contract and are typically related to delays in performance and delays in completion of a project. The best way to think of such damages is in connection with an income-producing project such as a hotel, convention center, manufacturing facility, etc., from which an owner will derive revenue. If the project is not completed ...
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By John T. Crowley of Smith, Currie & Hancock LLP Published: July 29, 2020 A general contractor’s young project engineer, frustrated with an underperforming subcontractor, asked an old superintendent why the company would not simply terminate the substandard subcontractor and hire another subcontractor to complete the work. The superintendent responded that if the company terminated that subcontractor and every other problematic subcontractor, eventually there would be no more subcontractors to work with. It seems like a simple answer, but owners, general contractors, and higher tier subcontractors often struggle with the decision to exercise their ...
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By R. Lee Mann, III and Jacob Edwards of Kilpatrick Townsend & Stockton LLP Published August 6, 2020   On August 5, 2020, the Governor of Georgia signed Senate Bill 315 to legislatively overrule a September 2019 decision by the Georgia Court of Appeals on the effect of a lien claimant’s failure to withdraw a lien waiver using the statutory process for invalidating waivers of lien or bond. In that case,  ALA Construction Services, LLC v. Controlled Access, Inc. , 1  the Georgia Court of Appeals had ruled that statutory lien and bond waivers can also waive claims for breach of contract and leave the claimant with no rights to recover amounts that ...
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By Lori Ann Lange and Sabah Petrov of Peckar & Abramson, P.C. Published August 11, 2020 Later this week, the U.S. will take another step in protecting the federal government’s information and systems by restricting prime-contractors and subcontractors from using certain Chinese telecommunications equipment and services. These restrictions not only apply to those who provide the government with the equipment and services, but also apply to the internal systems used by contractors to conduct their own business. It is expected that the interim rule will have a dramatic impact on a contractor’s existing internal telecommunications products and systems. ...
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By Carmen Calzacorta , Omar Contreras , Savannah Wolfe , Dan Eller , Christopher Slottee , Charmin Shiely , Kenneth Katzaroff , and Russel Robertson of Schwabe Williamson & Wyatt Published August 7, 2020 Most Paycheck Protection Program (“PPP”) borrowers are working toward full forgiveness of their PPP loans and are anxious to get this process started. A borrower may submit a loan forgiveness application any time on or before the maturity of the loan—including before the end of the covered period—if the borrower has used all of the loan proceeds. But that does not mean a borrower should submit a loan forgiveness application as soon as possible. ...
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By Maria L Panichelli and Michael A. Richard of Obermayer Rebmann Maxwell & Hippel LLP Published August 5, 2020 In an important case for architects and design-builders, the Armed Services Board of Contract Appeals (ASBCA) held that the United States Army Corps of Engineers (USACE) is liable for delays arising from design-reviewer comments that change the design process specified in the contract. Many architects and design-builders have seen it happen: they submit a design submittal in accordance with the requirements of the contract, only to have a Government design-reviewer cause a delay by demanding details that either are not required, or are ...
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By Carmen Calzacorta , Omar Contreras , Christopher Slottee , David Ebel , and Savannah Wolfe of Schwabe Williamson & Wyatt Revised August 17, 2020 Borrowers applying for loan forgiveness under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) should familiarize themselves with the SBA guidance regarding the loan forgiveness review process. By adopting a forward-thinking and proactive approach to loan forgiveness and its review, borrowers may increase the likelihood of having their loans forgiven. This article provides a general overview of the PPP loan forgiveness review process to help borrowers identify and address ...
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