Construction Law Blog
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Many contractors now carry professional liability insurance in addition to their commercial general liability insurance because of the prevalence of alternative procurement delivery methods, such as general contractor/construction manager and design-build contracts. In the wake of the recent Washington Supreme Court decision in W.G Clark Constr. Co. v. Pac. Nw. Reg'l Council of Carpenters, ___ P.3d ___ (Docket No. 88080-8) (2014), a decision by the United States District Court of Western Washington may give general contractors who do not already carry professional liability insurance another reason to think about procuring such insurance. Read more about the W.G. Clark Constr. Co. decision here.
Training Opportunity: Tricks, Traps and Ploys Used in Construction Scheduling in Washington Seminar – Discount Available
Ahlers & Cressman, PLLC attorneys Ryan W. Sternoff and Brett M. Hill will be presenting a seminar on June 4, 2014 in Seattle, Washington covering a wide variety of issues relating to construction project scheduling. The seminar will help you stay out of trouble and keep your project on track. The seminar is put on by Lorman Education Services, who has graciously allowed Ahlers & Cressman to provide a 50% discount on the regular registration fee to our blog readers. You will need to provide the discount code listed below when you register.
Waiver of Subrogation Provision in AIA General Conditions Does Not Bar Owner's Claim for Pollution Clean-Up Costs Against General Contractor
The waiver of subrogation provision in the AIA A201 General Conditions is included to protect parties in the construction process from claims for damages arising out of perils covered by property insurance. Without this type of protective clause, an insurer who pays a claim would have the right to make a subrogation claim (i.e. pursue collection) against the party who caused the loss. A recent Indiana case applying the AIA's waiver of subrogation provision suggests the scope of protection may not be as broad as many parties or insurance professionals may have expected.
Since December 2013, the tunnel boring machine ("TBM") known as "Bertha,"
built by of Hitachi Zosen Corp. of Osaka, has been stuck underground Seattle's waterfront about 1,000' from where it began. It (she) is now expected to resume digging at the end of March 2015, after crews fix the damage to its seals and bearings. Seattle Tunnel Partners ("STP"), the general contractor for the project, is digging a concrete-piling-lined pit in front of the stuck TBM. STP will then tunnel its way through the pilings, giving workers access to Bertha's cutter head. Next, STP is expected to remove the cutter head and repair whatever needs to be repaired. This is no simple task: at 57.5' in diameter, Bertha is the world's largest TBM. Since the machine is stuck underground, STP does not presently know the extent of damage. There is simply no telling what will happen once Bertha is "unearthed." In a recent radio interview, Washington's Transportation Secretary Lynn Peterson acknowledged that there was a "small possibility" that the tunnel will never get built. The only scenario in which that might happen, according to Ms. Peterson, is if STP and WSDOT discover that "the machine is not going to actually be fixable."
One of the primary benefits of conducting business through a corporation or limited liability company is the limitation of personal liability. Shareholders or members are not generally liable for the debts of the entities that they own. The corporate structure, however, can be abused by shareholders in order to defraud creditors from recovering on debts owed by the corporation. As you will read below, shareholders may transfer a corporation's assets into the hands of another of the shareholder's business entities to shield those assets from creditors.
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.
Historically, a major factor preventing small businesses from participating in the government contracts was “bundling.” Bundling occurs when two or more contract requirements, previously provided or performed under smaller contracts, are consolidated into a solicitation for a single contract that is likely to be unsuitable for award to a small business. Attempting to increase efficiency and decrease administrative costs, Congress passed the Federal Acquisition Streamlining Act in 1994, encouraging the consolidation of certain contracts. As a result, between 1992 and 2001, 44.5% of all reported prime contract dollars were in bundled contracts.
Washington Supreme Court Overturns 30-Year Law Protecting General Contractors From Trust Fund Liens on Public Works Projects
Under Washington’s Public Works Statutes (RCW 39.08 and 60.28), general contractors who perform public works are legally required to post payment bonds and have retainage withheld from progress payments. The purpose of these laws is to protect the public entity (owner) from subcontractor and supplier claims against the public project, while preserving the interests of mechanic’s lien rights (subcontractors and suppliers are provided bond claim and retainage rights, but have no lien rights in the public property).
A problem that often arises with respect to change orders concerns the nature and amounts of compensation that the change order payment is intended to provide. While the contract documents will commonly set forth specific methods for determining the direct cost of extra work, the contract documents may not address whether the issue of impact costs is to be included in the change order or not. It is important to ascertain if the extra work provisions in the contract provides for such coverage, especially in preparing an impact claim after the extra work price has been accepted. Generally, the contractor should make a careful review of the contract documents and follow the methods set forth in the contract for change order pricing.
Washington State Supreme Court Justice James Johnson is retiring at the end of this month, which creates an opening on this State's highest bench. Under the law, Governor Jay Inslee will appoint a jurist to fill that vacancy. This firm is very proud and excited that our good friend and partner Douglas R. Roach is being considered for that exalted and honored position. Douglas has met with the members of the Governor's staff tasked with finding a replacement for Justice Johnson.