Volume: 4, Issue: 19 - 05/15/2015
By Bruce Jervis
Companies that supply goods and materials for public works projects can face payment challenges. If their customer fails to pay, their only recourse is against a public works payment bond. But first there are questions as to whether the goods were merely intended for the bonded project, were delivered to the job site, or were actually incorporated into the project. Then there is the sometimes greater challenge of identifying the applicable payment bond and filing a timely claim against it. Read more.
Since the February 18th announcement of its draft proposed rules for drone use (see ConstructionPro Week Volume 4 - Issue 7) , the FAA has received over 4,500 comments, mostly in support of the rules. Although the official 60-day period for comments closed on April 24, the FAA announced it will continue to consider comments as time and resources allow. Posted just yesterday, for example, construction services firm Skanska USA Building Inc. expressed support for the new micro UAS classification... Read more:
Volume: 4, Issue: 18 - 05/08/2015
By Bruce Jervis
When a project owner elects to terminate a contract for its own convenience, the owner chooses a “no fault” termination. Rather than terminating the contract for cause – a default termination – the owner exercises its contractual right to end the relationship, pay for work performed to date and compensate the contractor for the administrative and settlement costs of the termination.
Given the “no fault” nature of a convenience termination, isn’t it inconsistent to allow the project owner to recover damages from the contractor? Not necessarily, according to the Connecticut Supreme Court. An owner was allowed to assess liquidated damages for late project completion after terminating the contract for the owner’s convenience. The contract clause reserved “any other right or remedy” of the owner. Read more.
Indiana Gov. Mike Pence signed a bill this week that will eliminate the wage rates that must be paid on state or local government projects according to The Washington Times. Currently determined by government boards composed of labor and contractor representatives, the new law is intended to let free market forces determine wage rates. Supporters say the bill will lower project costs as much as 20%. Opponents to the bill say that it will open the door for low-paying, out-of-state contractors. The bill takes effect in July. Read the full story here:
Government work represents approximately 27%-28% of all construction dollars put in place annually according to Department of Commerce monthly spending reports. Federal and federally funded public works represent a good chunk of this work. One of the challenges we have observed in government contracting is complying with a vast set of rules and regulations; for federal work, this includes the Federal Acquisition Regulation (FAR).
To learn more about these challenges and issues, WPL Publishing Co., Inc. has decided to conduct a survey of our reader’s experiences in federal, state and local government construction contracting. This includes the procurement process, project start-up, contract administration, handling of change orders and project closeout. If you perform work on government work, please take a few minutes to complete our short survey. Results will be published in June. The survey can be accessed here. (https://www.surveymonkey.com/s/GovContracting2015A)
Please feel free to forward this email to others in your organization that work on government projects. Thank you.
Volume: 4, Issue: 17 - 05/01/2015
By Bruce Jervis
Bidders on construction contracts frequently must rely on physical site condition information provided by the project owner. Lack of time, access and money prevents bidders from conducting individual investigations. The law does not require it. All that is required is reasonable pre-bid observation. Read more.
In Part 1 of this two-part article on cost control for heavy and highway contractors (published in the last issue of CPW), we introduced some of the unique aspects of tracking costs for unit cost pay items. Timely cost and production reporting is crucial in order for contractors to be able to track costs and make adjustments in the field when necessary. This week, we look at common situations of cost conflicts in more detail, as well as approaches to the design and implementation of cost control systems to manage these issues. Read more.