Construction Law Blog
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The Washington State Court of Appeals recently addressed an excavation contractor’s responsibilities under the Underground Utilities Damage Prevention Act (UUDPA), RCW 19.122. That statute was enacted in 2011 and imposed certain statutory duties on parties involved with projects requiring excavation.
In this case, Titan Earthworks, LLC contracted with the City of Federal Way to perform certain street improvements including installation of a new traffic signal. During the process of excavating for the traffic signal, Titan drilled into an energized underground Puget Sound Energy power line. PSE sought damages from Titan and Titan sued the City of Federal Way.
WSDOT Seeks Retraction of Waiver Excluding Non-Minority Woman-Owned Businesses from Participation Goals
If you are a regular reader of our blog, you will likely recognize that our firm has been actively involved and concerned with the results of Washington State Department of Transportation’s (“WSDOT”) Disparity Study, which impacts both Disadvantaged Business Enterprises (“DBE”) and general contractors who bid on federally-funded projects with DBE goals. On June 1, 2017, WSDOT implemented a “waiver”, which excluded Caucasian women-owned firms (“WBEs”) from qualifying for Condition of Award DBE Goals on federally-funded projects. This drastic action was the result of WSDOT’s highly criticized 2012 Disparity Study conducted by BBC Research & Consulting of Denver, Colorado, which concluded non-minority women-owned firms do not face “substantial disparities” in the federally-funded transportation contracting market.
Subcontractors on public projects in Washington State will no longer be required to wait until final acceptance of the project to get their retainage money. A new statute, which goes into effect on July 23, 2017 and applies only to Washington public projects, will allow subcontractors to get their retainage sooner.
Under prior law, a subcontractor could only get its retainage prior to final acceptance if the general contractor provided a retainage bond to the public owner to secure a release of the general contractor’s retainage and the subcontractor then provided a similar retainage bond to the general contractor in the amount of its own retainage. If the general contractor decided to not provide a retainage bond to the owner, the subcontractor would be forced to wait until final acceptance of the project before it could get paid its retainage.
The City of Seattle’s City Purchasing & Contracting Services recently revised its General Special Provisions for City construction contracts to add new “Acceptable Worksite” language. The City indicates that the purpose of the provisions is “to ensure that City construction worksites are respectful and appropriate, including prohibiting bullying, hazing, and other similar behaviors.” An “Acceptable Worksite” is defined as a worksite “that is appropriate, productive, and safe work for all workers” and “free from behaviors that may impair production, and/or undermine the integrity of the work conditions including but not limited to job performance, safety, productivity, or efficiency of workers.”
While we avoid using this blog as a platform for self-promotion, we recently received share-worthy distinctions, which both flatter and humble us. We invite you, our loyal readers, to celebrate in our success, which in great measure is due to you.
Founding partner John P. Ahlers was ranked third overall across all practicing industries in Washington 2017 Super Lawyers and founding partner Paul R. Cressman, Jr. was ranked in the Top 100. The following other firm members were also recognized as Super Lawyers: Founding partner Scott R. Sleight, Bruce A. Cohen (Partner), Brett M. Hill (Partner), and Lawrence Glosser (Partner). In addition, Ryan W. Sternoff (Partner), James R. Lynch (Partner), Tymon Berger (Associate), and Lindsay (Taft) Watkins (Associate) were selected as Super Lawyers Rising Stars. Over half of the firm's lawyers received Super Lawyers distinction.
Construction attorneys rarely encounter state and local tax issues. However, in a recent negotiation over a disputed change proposal, an Owner’s attorney argued that Washington prohibits recovery of B&O tax as a separately-billed line item in the change proposal. Given that itemization of B&O surcharges seemed a fairly common business practice, I was initially skeptical of the position. Upon further review, it became apparent that the Owner’s argument was indeed correct and that many contractors may be unknowingly violating the law by separately itemizing and adding a percentage for B&O tax to their billings or change proposals.
A drastic change has been implemented by the Washington State Department of Transportation (“WSDOT”) to the Disadvantaged Business Enterprise (“DBE”) Program in Washington. Effective June 1, 2017, WSDOT has implemented a “waiver” to exclude women-owned DBEs[i] from qualifying toward Condition of Award (“COA”) Goals on federally-funded projects. This move is significant. It will likely result in long-lasting detrimental impacts on the DBE community, women-owned businesses, and the entire construction community in Washington. The construction industry should be in an uproar over this change. Instead, it has largely gone unnoticed (likely because its impacts have not yet been felt). It is a de facto exclusion of women-owned businesses from the DBE program, and the severity of this change cannot be overstated.
A New AAA Study Confirms that Arbitration is Faster to Resolution Than Court – And the Difference Can be Assessed Monetarily
There has been a perception among some litigators that arbitration is more expensive than court due to several factors. Among them:
- The “upfront” costs are higher in that filing fees for arbitration exceed those in court. Arbitrators are paid, whether hourly or a flat rate, and the three arbitration panels can become very expensive.
- Some arbitration clauses preserve statutory discovery rights, basically defeating the advantage of a simplified arbitration process. Discovery wars are extremely expensive. Depositions are the most costly of discovery, and in arbitration, as opposed to court, depositions are limited or do not exist.
- Some arbitration clauses integrate the statutory rules of civil procedure, making arbitration almost equivalent to litigation. These types of clauses do the parties no favors
General Construction v. Grant County PUD: Chalkboard Notice is Invalid and Engineer Cannot Waive Notice Requirements
I previously posted a blog about the General Construction v. Grant County PUD case and the Court of Appeals’ rulings regarding notice and claim procedures.[i] The General Construction case is also noteworthy for two other issues that were raised in that case.[ii] The first issue involved whether a contractual written notice requirement is satisfied when the notice is provided on a chalkboard only. The second noteworthy issue is whether the Public Utility District’s (“PUD”) own in-house engineer could waive the contractual notice and claim procedures in the PUD’s contract.
Another court in Washington was asked to apply the Mike M. Johnson[i] decision to a contractor’s claim for extra work. This time it was the Division III Court of Appeals in Washington. The Division III Court of Appeals, which covers all of Eastern Washington, had a hand in the original Mike M. Johnson case. That court is the intermediary court that ruled in favor of the contractor in Mike M. Johnson. It held that there were issues of fact as to whether Spokane County, in the Mike M. Johnson case, had actual notice of the changed conditions and, thus, waived the notice and claim procedures that the County was attempting to rely upon. The Division III Court of Appeals was later overruled by the Washington State Supreme Court, which held as a matter of law that the County of Spokane had not waived the notice and claim procedures. This time around, the Division III Court of Appeals, for the most part, ruled in favor of the public entity and followed the Mike M. Johnson decision.