Construction Law Blog
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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.
More than 100 new industries are now eligible for the Small Business Administration’s (“SBA”) Woman-Owned Small Business (“WOSB”) contract program. The SBA implemented the WOSB program in order to expand the number of industries where woman-owned small buisnesses could compete. The program allows set-asides for Economically Disadvantaged WOSBs (“EDWOSBs”) in industries where WOSBs are underrepresented and set-asides for WOSBs where they are substantially underrepresented.
Legislative Update: House Bill 2539 Clarifies the Application of the Real Estate Excise Tax to Property Inherited by Operation of Law
In Washington, the real estate excise tax (REET) is imposed on the sale of real property, which includes the transfer of ownership and the transfer of controlling interests in real property. RCW 82.45.197 provides for several exemptions from the REET. One of the allowable exemptions is for individuals who inherit real property.
As discussed in previous blog posts, a Termination for Convenience (“TforC”) clause allows a party (generally, the owner or general contractor) to stop work for just about any reason without having to pay for anticipated profit or unperformed work. Read more here and here. Recently, the Washington Court of Appeals decided SAK & Associates, Inc. v. Ferguson Construction, Inc. in which the Court held that all that is required to trigger a TforC clause is a statement that termination is being invoked for the convenience of the terminating party. Read more here.
Client Choice selected Ahlers & Cressman and one of its founding member, John P. Ahlers, as one of its 383 winners worldwide for 2016. Only five other attorneys won the 2016 Client Choice award in Washington and Mr. Ahlers was the only Washington attorney to win for his expertise in Construction Law.
Established in 2005, Client Choice recognizes those law firms and partners around the world that stand apart for the excellent client care they provide and the quality of their service. The criteria for this recognition focus on an ability to add real value to clients' business above and beyond the other players in the market.
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.
Release from Condominium Owners Association Precludes Claims by General Contractor Against Subcontractor, Except for Defense Costs
Recently, the Washington State Court of Appeals addressed a dispute between a general contractor and its windows subcontractor in connection with the construction of the Admiral Way Mixed-Use Project in West Seattle.
In Bordak Bros., Inc. v. Pac. Coast Stucco, LLC, the developer of the Admiral Way Mixed-Use Project hired Ledcor Industries (USA), Inc. (“Ledcor”) as its general contractor, and Ledcor hired Starline Windows, Inc. (“Starline”) to supply window products for the Project. After the Project was completed, the Condominium Owners Association (“COA”) discovered defects in the building and sued the developer, who then brought suit against Ledcor. Ledcor then commenced suit against its subcontractors and suppliers. Ledcor did not initially name Starline as a defendant to its claims.
The Washington Court of Appeals recently upheld a massive $155,831,471.00 jury verdict in favor of King County against Vinci/Parsons/Frontier Kemper JV (“VPFK”) and its multiple sureties. VPFK was one of the joint venture contracting entities performing tunneling work on the Brightwater Wastewater Treatment System Expansion Project. The verdict was the end result of a nearly three-month jury trial that took place in the fall of 2012.[i] The verdict represents one of the largest awards, if not the largest award, in a construction dispute in this state.