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.
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.”
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.”
Most public works construction projects in Washington require public agencies to withhold a certain percentage of each progress payment as retainage until the completion of the project. In Washington, retainage of 5% is established as a trust fund for the protection of potential claimants, including subcontractors, suppliers, and laborers. Once a retainage bond is submitted in lieu of the public agency withholding retainage, any retainage previously withheld is released, and any future payments are for the full amount.
Suit Against Limited Liability Company Held to Be Time Barred When Brought More Than Three Years After Dissolution: Certificate of Dissolution Requirement Not Retroactive
On March 13, 2014, Division III of the Washington Court of Appeals reversed a trial court's refusal to dismiss of a suit by homeowners against a developer as untimely when it was brought more than three years after the developer dissolved its limited liability company.
The Washington State Department of Transportation ("WSDOT") is moving forward with its proposal to exclude non-minority women-owned businesses from Washington's Disadvantaged Business Enterprise ("DBE") program goals for federally-funded contracts. In early March 2014, WSDOT submitted its proposal to the U.S. Department of Transportation's Federal Highway Administration ("FHWA"). If approved by FHWA, this significant change will go into effect in Washington for the rest of federal fiscal year (FFY) 2014 and remain in place through FFY 2017. WSDOT's proposal was originally reported on the Ahlers & Cressman blog on January 9, 2014. Read our original article here.
On January 9, 2014, the Washington Utilities and Transpiration Commission ("UTC") announced that it has fined two utility companies, Pacific Power and Light Co. ("Pacific Power") and Frontier Communications Northwest, Inc. ("Frontier"), under Washington's new Underground Utility Damage Prevention Act (the "Act"). These are the first two penalties issued by the UTC since the Act took effect on January 1, 2013.
The Washington State Legislature is reviewing legislation to expand the availability of the "general contractor/construction manager" or "GC/CM" method of construction on public construction projects.
WSDOT Makes a Drastic Move by Publishing its Intent to Exclude Non-Minority Women-Owned Businesses from DBE Participation Goals for 2014
On the eve of the holiday season, the Washington State Department of Transportation (“WSDOT”) published its intent to submit a proposal to the United States Department of Transportation (“USDOT”) with two striking and drastic changes to the Disadvantaged Business Enterprise (“DBE”) Program in Washington. These changes will have a radical effect on non-minority women-owned DBEs. Women-Owned Businesses (“WBEs”) should take swift action to halt WSDOT’s proposed changes, which will have lasting detrimental impacts on small businesses in Washington and the construction industry as a whole.