Construction Law Blog
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In federal government contracting, as in most public works contracts, contractors are required to comply with Contracting Officers' decisions. Contract clauses mandate that pending resolution of disputes, the contractor must proceed with the performance of the contract, the dispute notwithstanding.[i] Thus, even if a contractor suspects that the Contracting Officer directing the extra work does not have appropriate funds to pay for the changed work, the contractor has little choice but to perform the extra work. This is a trap for unwary contractors that expend their own funds only to find out that there is no appropriation to pay for the extra work. The Federal Anti-Deficiency Act was passed to prevent this very issue from occurring, but as contractors have learned, this Act has not precluded government employees from directing extra work for which they have no funds.[ii]
In the 2007 legislative session, the Washington State Legislature significantly expanded the definition of what constitutes a “Contractor” in Washington State, such that for the past 8 years a broad reading of the contractor’s registration statute, RCW Ch. 18.27, would require just about any person or entity, other than a residential homeowner, who is involved at any level in improving real property to be registered as a “Contractor,” irrespective if that person or entity hired a licensed contractor to perform work on real property that they own. This has imposed a burden to register as a contractor on persons or entities not performing any actual construction work, such as “house flippers” or developers, who retain general contractors to perform work for them, and do not so much as lift a shovel of dirt to improve the property that they own.
The Veterans Benefit Act of 2003 established a procurement program for Service-Disabled Veteran-Owned Small Business (“SDVOSB”) concerns. This program provides that contracting officers may restrict competition to SDVOSB, and award a sole source or set aside contract where certain criteria are met. The Small Business Administration (“SBA”) then issued rules establishing a SDVOSB Concern Program. The SBA’s program establishes the criteria to be used in federal contracting to determine service disabled veteran status, business ownership and control requirements, and guidelines for establishing sole source and set aside procurement opportunities in protest and appeal procedures (see Code of Federal Regulations (“CFR”) 13 CFR § 125.8-125.10).
The Washington Industrial Safety and Health Act of 1973 (“WISHA”) is a statute that empowered the Department of Labor and Industries (“L&I”) to create and enforce safety and health regulations for nearly all employers and employees in the state. WISHA was the first fully-operational state safety and health program approved by the federal government. Under WISHA, L&I may conduct investigations into employers that it believes to be in violation of a safety of health statute or regulation, and issue a citation. These citations are posted at or near the place of violation, and also are posted online as a matter of public record.
Historically, the common law doctrine of sovereign immunity prevented liens against public property, and federal statutes allowed only those in privity of contract with the federal government to sue to enforce contractual rights. To address this concern, Congress enacted the Heard Act in 1894. In 1935, Congress repealed the Heard Act and enacted the Miller Act in its place. The Miller Act requires that all general contractors post payment bonds on contracts in excess of $25,000.00. If the contracting officer determines that a payment bond in the full amount of the contract is impractical, he or she may set a different amount for the payment bond. Bonds of half the contract amount are common on federal jobs.
In Washington, general contractors are primarily responsible for compliance with the Washington Industrial Safety and Health Act of 1973 ("WISHA"), even when it comes to the conduct of their subcontractors. If a subcontractor commits a violation, the Washington Department of Labor and Industries ("L&I") may still issue a general contractor a citation. The Board of Industrial Insurance Appeals - the quasi-judicial administrative body charged with reviewing L&I citations - has found a limited exception to a general contractor's "primary responsibility," but only if the general contractor has a safety program that is effective in practice and the violation was the result of unpreventable misconduct.
Minimum Wage Increases in 20 States: On January 1, 2015, employers in 20 states and the District of Columbia, as well as those who perform work on federal contracts and subcontracts, will see an increase in the minimum wage. In nine states which make adjustments to keep up with rising inflation (i.e. Washington), the increase is automatic. In 11 other states and the District of Columbia, the minimum wage is being raised as a result of new laws approved by the legislatures or by vote of referendum. To assist you in determining which states have raised the minimum wage and what the minimum wage is in those states, the U.S. Department of Labor provides an interactive map and state-by-state report (available here), which employers can use to determine the applicable minimum wage in a state. Also, as previously reported in this blog (available here), the new minimum wage for federal contractors and subcontractors is $10.10 as a result of an interim final rule issued on December 15, 2014.
OSHA Reporting Requirements: Beginning January 1, 2015, employers covered by the Occupational Safety and Health Administration ("OSHA") are required to report all work-related fatalities within eight hours, and all inpatient hospitalizations, amputations and losses of an eye within 24 hours. Previously, employers were required to report all workplace fatalities and when three or more workers were hospitalized in the same incident. Employers may report these serious incidents to OSHA by calling the nearest OSHA area office during normal business hours (list available here); calling the 24-hour OSHA hotline at 1-800-321-OSHA (6742); or reporting online here.
One of the responsibilities of the Washington State Department of Labor and Industries (“L&I”) is to oversee the administration of the Washington Industrial Safety and Health Act (“WISHA”). L&I accomplishes this task by certifying compliance and assessing penalties for violations of safety and health regulations on the jobsite. When a violation occurs, L&I levies a base penalty that is determined in one of two ways. If the law has already specified a penalty amount for the particular violation that has occurred, L&I fines the offender for that sum. If there is no specified rate for the violation, L&I matches the penalty with a gravity score assigned to the violating condition.
Please be aware that companies doing business as ANNUAL BUSINESS SERVICES, COMPLIANCE SERVICES, or CORPORATE RECORDS SERVICE (not to be confused with the Washington corporation, Compliance Services, Inc.) are mailing unsolicited notices to business entities in Washington State requesting that "Annual Minutes" and a fee of $125.00 be sent to them for filing. You can see an example here.
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.