Construction Law Blog
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The separation of powers principle is an important cornerstone of American political governance. America's tripartite version of this principle - memorialized in the U.S. Constitution - allocates certain governing responsibilities among three branches: the legislative branch, which makes the laws; the judicial branch, which interprets the laws; and the executive branch, which enforces the laws. In theory, the system allows for the effective administration of government without centralizing too much power in a single body. In practice, government branches sometimes step on one another's toes when confronting cross-jurisdictional issues.
Across the country, Public-Private Partnerships ("P3s" - which you can read more about here) are gaining traction as an alternative means of financing and completing public projects. Although Washington has been slow to implement P3s in its own public ventures, it is important to think about the effect this emerging procurement model might have on other, seemingly "settled" areas of the law.
Ahlers & Cressman, PLLC attorneys Scott R. Sleight and Elizabeth (Ellie) Perka will be presenting a live webinar on Tuesday, September 30, 3014 covering construction subcontractor default insurance (SDI) as a potential alternative to performance bonds, the key differences between SDI and surety bonds, the benefits and disadvantages of SDI, and the factors that should be considered in weighing SDI as an acceptable vehicle for performance risk protection. This live 90-minute traning opportunity will include interactive questions and answers.
An indemnity clause in a contract allows the contracting parties to dictate liability, usually in the form of personal or property harms. For example, if A ("Indemnitor") indemnifies B ("Indemnitee") against all injuries caused by its construction, and C becomes injured by B's work, C will have a claim against B for the injury. B will then have an indemnity claim against A for the cost to defend and for any damages arising from C's lawsuit. We have previously discussed indemnification on our blog. See Top 10 Construction Contract Provisions and Washington’s Defense and Indemnification Statute.
Unlike other professionals, a unique problem faced by architects is that there are codes and ordinances that specifically detail how their jobs are to be performed. Lawyers are ethically prohibited from contracting to guarantee the outcome of the case. Doctors are practically precluded from guaranteeing the outcome of a particular medical procedure. Architects, on the other hand, are required by law to comply with codes when designing improvements in real property.
On July 29, 2014, the Senate passed the Highway and Transportation Funding Act of 2014, following the House of Representatives' passage two weeks earlier. The Act was signed by the President on August 8, 2014.
Small Business Administration Updates Small Business Standards - Increasing the Definition of “Small”
If your company participates in any small business, federal government procurement program, or certain state procurement programs such as the Federal Disadvantaged Business Enterprise (DBE) Program, the 8(a) Program of the Small Business Administration (SBA), or Washington State’s Minority or Women-Owned Business Enterprise (M/WBE) Programs, your size status may have changed on July 14, 2014, as a result of an update to the SBA’s small business standards. The majority of these small business procurement programs utilize SBA’s “Table of Small Business Standards” to define the government’s limits for what constitutes a small business. As the definition of “small” varies by industry and scope of work, this Table is based on the 2012 North American Industry Classification System (NAICS), which assigns six-digit codes to businesses based on their primary activity. In turn, each NAICS code is assigned either a revenue limit (based on average annual receipts) or average employment (number of employees). For example, for the past few years (since 2008), the NAICS code for framing contractors is 238130, and provided for a $14.1 million average revenue limit. Thus, any framing business with an average revenue (over the past three years) of less than $14.1 million met the definition of a “small business.”
Washington, D.C. is known for playing host to a variety of complex people and institutions. It should come as no surprise then that the modern construction lien - a complicated legal mechanism itself - was conceived in response to the establishment of this important American city.
President Obama, on Thursday, July 31, 2014, signed an Executive Order that requires contractors bidding on federal government work to disclose labor law violations and gives screening assistance to federal agencies awarding contracts. Termed the “Fair Pay and Safe Work Places Executive Order” will apply to companies pursuing federal contracts worth more than $500,000 and becomes effective in 2016. Government statistics indicate this executive order will affect roughly 24,000 businesses that employ 28 million workers on federal contracts. According to a White House fact sheet: “The Executive Order will ensure that the worst actors, who repeatedly violate the rights of their workers and put them in danger don’t get contracts and thus, can’t delay important projects and waste taxpayer money.”
Measuring Date for 90-Day Notice Under the Miller Act is the Date When the Last Equipment was Furnished in Open Book Account
On June 20, 2014, the Ninth Circuit Court of Appeals held that the measuring date for the 90-day notice requirement for a Miller Act claim in an open book account is the date when the last materials or equipment were furnished. As discussed below, this decision could have significant impacts on contractors' exposure to huge, unforeseeable Miller Act claims.