Construction Law Blog
Blog Disclaimer: The content provided on this website is for informational purposes only and is not legal advice. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. The information provided is intended for general information which may or may not reflect the most current developments. Read More
Blog: Congress Strikes a Blow to President Obama’s “Fair Pay and Safe Workplaces” Executive Order 13673
On October 25, 2016, the Federal Acquisition Regulatory Council (FAR Council) and the U.S. Department of Labor implemented former President Obama’s Executive Order 13673: “Fair Pay and Safe Workplaces” rules. The rules became effective on October 25, 2016 and fundamentally altered the way federal contractors and subcontractors will need to handle and resolve employment and labor claims, as well as compliance issues involving their entire workforce. The final rules can also result in otherwise-capable companies being “blacklisted” and effectively barred from federal contracts and subcontracts based on labor and employment law violations related or unrelated to prior or current federal contract performance. The centerpiece of the new regulatory scheme was the new disclosure and responsibility requirements. Contractors and subcontractors needed to disclose all “labor law decisions” that they had during the three years (prior to bid submission) as part of the process of applying for a new federal contract or subcontract. If a contractor or subcontractor has too many “labor law decisions” to report or the few it has are too severe, pervasive, repeated, or willful in the eyes of the government “experts,” the company could be deemed “non-responsible” and denied a contract.
Rotech Healthcare, Inc., a healthcare contractor, recently successfully protested the award of a home oxygen and durable medical equipment contract by the Department of Veterans Affairs to Lincare, Inc. based on an unsupported past performance evaluation and allegations of an unequal discussion. See GAO Protest File Number: File: B-413024 (August 17, 2016). The Request for Proposals (“RFP”) provided that award would be made on a “best value” basis to the offeror whose proposal was most favorable to the government based on the following evaluation factors with the following possible ratings:
- Joint Commission Accreditation (Acceptable or Unacceptable)
- Region of Service (Acceptable or Unacceptable)
- Past Performance (Excellent, Good, Satisfactory, Unsatisfactory, or Neutral)
- Technical Capability (Excellent, Good, Satisfactory, Unsatisfactory)
Construction contractors increasingly use drones to monitor and document progress on construction sites. Drones are becoming more and more common place in construction. One of our clients, an excavation contractor, uses a drone to fly the project before the bid. The contractor then uses the data gathered from the drone to create a topographic map, inputs the design elevations and plans in a computer, and calculates the quantities as a check of the owner takeoffs. This is an inexpensive check on quantities, which provides the contractor with a leg up in the bidding process.
Breach of Implied Warranty Under Attack; Contractor Organizations Urge the Supreme Court Not to Change the Longstanding Law—Review Denied
In June 2006, King County awarded VPFK (Vinci Construction Grands Projects, Parsons RCI, Frontier-Kemper) a Brightwater Project tunneling work contract. The County specified which boring machine (the Slurry Tunnel Boring Machine “STBM” method) was to be utilized in performing the work. During performance, VPFK’s progress was substantially slower than anticipated because the County-specified STBM method was not suitable for the work to be performed under the soil conditions. The STBM ultimately failed, and VPFK’s performance was behind schedule.
The U.S. Government Accountability Office (“GAO”) has jurisdiction to hear bid protests from government contractors seeking review of a federal agency’s contract procurement and awards. The GAO receives thousands of bid protests every year. On April 15, 2016, the GAO published notice of potential changes to its protest procedures, which would significantly change the manner in which protests get filed and decided.
Many of our veterans returning from the wars in Iraq and Afghanistan are interested in starting or buying their own business. To support our soldiers, the U.S. Department of Veterans Affairs (“VA”) implemented the Veteran and Small Business program, which creates set-asides for Service-Disabled Veteran-Owned Small Business and Veteran-Owned Small Business (“VOSB”). However, the far more lucrative set-asides with the Department of Transportation (“DOT”) are governed by the Disadvantaged Business Enterprise (“DBE”) program. For DOT set-asides, only women-owned and minority-owned small businesses qualify as DBEs.
At times, both public and private owners succumb to the temptation of taking back what was given to a contractor through a differing site conditions clause by including disclaimers in their contracts as to the reliability of site condition information supplied in the bidding documents. The disclaimers may be specific statements, such as “no claims for differing site conditions will be recognized regarding the absence or presence of subsurface rock or unstable rock conditions,” or general statements, such as “the contractors shall not rely upon any contract indications or owner furnished information, but should make their own soils analysis.” The effectiveness of these disclaimers depends upon the specific language used. The more general the language, the more likely the disclaimer will be rejected. The outcome also depends on the jurisdiction in which a party attempts to enforcement of the disclaimer.
Is a Contractor’s Obligation to Continue Performance Absolute When Confronted with an Unresolved Dispute?
The case described in this article provides a solution to the vexing problem faced by a contractor considering stopping work due to an owner’s material breach, such as defective contract documents or the inability to proceed until the owner provides clarification. In such a situation, the contractor’s continued performance requires the contractor to expend its own resources in resolving the problem and possibly wait many months or even years for payment after exhausting the dispute resolution process. However, if the contractor simply stops performing, the contractor may be terminated for default, leaving an indelible mark on the contractor’s record until the issue is resolved by a court. Further, the contractor will likely face significant damages because the owner will re-procure the work with another contractor, which will inevitably cost more than it would have cost if the work had been performed by the original contractor.
California Federal Court Rules Engineers Owe Contractors a Duty of Care When Preparing Plans and Specifications Used in Public Bidding
The U.S. District Court for the Northern District of California recently ruled that an engineer who prepared plans and specifications that were relied upon by contractors in preparing their bids for a project owed a duty of care to those bidders. The Court held that an engineer can be liable to contractors for breach of the professional duty and/or negligent misrepresentation.
Teaming agreements are arrangements entered into by two or more independent companies for the purpose of procuring and performing competitively-bid contracts. Such arrangements are generally formed so that contractors-who on their own would be unable to meet the bid requirements-can combine their respective expertise to compete in the realm of complex design and construction projects. The companies' expertise are generally complimentary rather than competitive, which offers owners the "best combination of performance, cost, and delivery for the services being sought."[i]
[i] R. Fazio, J. Killian, "Creating and Enforcing Teaming Agreements," Construction Law, Spring 2005, at 5.