Georgia Tech Procurement Assistance Center

EAJA provides relief to construction contractor for government’s bad actions

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In Vet4U, LLC v. Department of Veterans Affairs, the Civilian Board of Contract Appeals awarded costs and attorney fees to the small business contractor that won its appeal pursuant to the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504, after finding the government’s position was not substantially justified.  The EAJA is a useful tool for small contractors who prevail against the government and were subjected to particularly difficult contracting circumstances.

As a reminder, the EAJA has five basic requirements that the applicant must meet in order to recover: (1) have been a prevailing party in a proceeding against the United States; (2) if a corporation, have had not more than $7,000,000 in net worth and five hundred employees at the time the adversary adjudication was initiated; (3) submit its application within thirty days of final disposition in the adjudication; (4) state the amount sought and include an itemized statement of costs and attorney fees; and (5) allege that the position of the agency was not substantially justified.  See 5 U.S.C. § 504(a)(1), (b)(1)(B); Vet4U, LLC v. Department of Veteran Affairs, CBCA 6612-C (5387).

Continue reading at:  Government Contracting Matters

Bipartisan bill would ban reverse auctions for federal construction contracts

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House members introduced bipartisan legislation on Thursday to improve the procurement process for federally funded construction projects.

Reps. Ro Khanna, D-Calif., and Mark Meadows, R-N.C., introduced the “Construction Consensus Procurement Improvement Act” (H.R. 5644).  If passed, it would ban federal agencies from using reverse auctions to award design and construction contracts.  This procurement method often favors businesses offering the lowest price, rather than those that are most qualified, they said.  The Senate passed its version of the bill in late December.

Reverse auctions can “compromise quality, overlook small businesses, or even require a new bidding process down the road, eliminating any initial savings,” the lawmakers said in a press release. “Reverse auctions are ultimately inappropriate platforms for design-build contracts, which require design concepts, key personnel, and technical solutions to be incorporated into any successful final decision.”

Continue reading at:  Government Executive

In certain circumstances the government may waive strict compliance with construction specifications

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Many federal construction contractors have been there: it’s near the end of the project and the government raises an issue with work that was done much earlier, but is not in strict compliance with the specifications.  The contracting officer demands strict compliance with the specifications, even if it means tearing out completed work to fix the defect.  And of course, the contracting officer insists that the government does not have to pay for the additional work.  The contractor has to proceed as directed, but is the contractor actually entitled to additional compensation or not?

On December 17, 2019, the Armed Services Board of Contract Appeals handed down its decision in the Appeal of Buck Town Contractors & Co., confirming that if the government knew about the defective work during performance but said nothing, then it has constructively waived strict compliance with the contract specifications and the contractor is entitled to additional compensation.

Continue reading at:  OBERMAYER GovCon Examiner

How to land a government construction contract

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Each year, state and local governments spend more than $250 billion on the construction of roads, schools and other public infrastructure.

Construction companies sometimes see government contracting as prohibitively competitive and believe the pay is low and the bid requirements are too time and effort-consuming.  But this is not the case, and should not hold construction companies back from bidding on a sector that offers huge growth opportunities.

Contractors of any size and any type can get started at any time with government work.  Construction companies and also landscape contractors, electrical contractors, design-build contractors, general contractors and even roofing contractors are desperately needed by government procurement departments.  Here are some tips for landing a government construction contract.

Continue reading at:  Construction Dive

Where construction contractors are most likely to exceed the budget

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Budget structures vary by the type of construction a contractor performs.  For example, subcontractors typically have a significant amount of their costs allocated to direct labor and materials while general contractors’ budgets are likely to have more subcontracted work on their books.

However, despite the differences in where the budget is weighted, every contractor, no matter its specialty, is vulnerable to cost overruns.

Weather delays

When serious rain, snow or other weather events keep contractors from making progress on their jobs, it’s not uncommon that both subs and GCs have those lost days tacked onto their schedules.  But what about the extra costs?

“If we get a rain day, it’s not like we can send the superintendent home and not pay him,” said Chuck Taylor, director of operations for Englewood Construction in Illinois.  “If we have a construction trailer, it’s not like we can tell the rental company, ‘Hey, it rained today, so we’re not going to pay for the rental on the trailer.’ It doesn’t work that way.”

Additional costs, which also include items like water remediation, wrapping an exposed building in protective material or bringing in expensive heaters, are often compounded by having to spend even more money on extra labor to make up lost time.  That could mean paying for additional crews or paying workers overtime.

This is an area of contract or subcontract negotiations that deserves attention, and it never hurts to ask the owner or GC for reimbursement beyond just adding time to the schedule.

Joe McLaughlin, chief financial officer of Austin Industries in Dallas, said contractors need to take into consideration where they’re building and factor in potential weather issues.  But, he said, it all goes back to what’s in the contract, so it benefits contractors to try to make the terms as flexible as possible.

Continue reading at:  Construction Dive

Five ways small, minority-owned construction firms can build success

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To spread the economic benefits that construction projects generate more fairly across communities, government agencies reserve some public work for contractors owned or operated by traditionally disadvantaged groups.

Federal, state and even city and county agencies have special programs that give qualified minority and woman-owned business enterprises (MWBEs) and other disadvantaged business enterprises (DBEs), such as service-disabled veterans, a chance to bid on and win certain construction projects ranging from small to mega.  That is, if they are certified.

The Small Business Administration, for example, runs the 8(a) certification program, which is probably the most well-known among government contractors, but other agencies have renditions as well.  Most certifying agencies require that a qualified business be owned by at least 51% minority or disadvantaged owners.

African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans and women are presumed to be socially and economically disadvantaged, according to the federal government.  Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.

But while certification provides some opportunities, it doesn’t mean that MWBEs and DBEs get to skip over all the hard work that goes into building a business.  “That’s not the way it works,” said Dan Moncrief III, CEO and chairman of certified minority commercial contractor McDaniel’s Construction Corp. in Columbus, Ohio, and president of the National Association of Minority Contractors.

“You have to work harder than you’ve ever worked and stay up later than you’ve ever stayed up to get your first job,” he said.  “And once you get a first job, it may be a long time before you get the second one.  So, it’s a constant grind.  If you don’t have the fortitude for it, you might want to do something else.”

Continue reading at:  Construction Dive

The top OSHA fines of Q2 2019

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Once again, fall-related violations were behind most of the biggest fines OSHA issued to construction companies in the second quarter of this year, but burn and asbestos hazards made a showing as well. 

However, what stands out most about this group of contractors is that one of them, Shawn D. Purvis, has been charged criminally in relation to a death that occurred on one of his company’s jobsites.  Once unheard of, prosecutors have been more willing to file criminal charges against construction companies, their executives and supervisors after a workplace accident, usually when serious injury or death results. 

Continue reading at:  Construction Dive

Supplier diversity: untapped resource for construction companies

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An effective supplier diversity program can provide multiple benefits for construction companies, including enhanced innovation, profitability, and the ability to attract and retain qualified minority and female employees.

The federal government, state government agencies, and even local governments require companies that do business with them to adopt and implement supplier diversity programs.  Many government contracts impose specific levels of contracting with diverse businesses as a contract requirement.

The definitions of “diverse business” vary from jurisdiction to jurisdiction, and many of the acronyms and names commonly used (e.g., Disadvantaged Business Enterprise or DBE) can have different meanings, depending on the laws and regulations applicable to the specific contracts.  Therefore, contractors must perform due diligence on the supplier diversity requirements whenever they submit a bid or proposal for a government contract.

A growing number of non-governmental owners mandate diverse supplier participation in their projects.  The “Billion Dollar Roundtable” is a group of major U.S. companies that have pledged to spend a minimum of $1 billion a year with diverse suppliers.  Due to their large dollar value, construction projects are a key component of these efforts.  As of May 31, 2019, the Roundtable has 27 members, including some of the biggest companies:  Apple, Boeing, Exelon, and Walmart.  Other companies are following this example.

Continue reading at:  National Law Review

7 tips to maximize construction project profitability

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Many business leaders in construction worry about winning jobs, but sometimes a lost bid is a bullet dodged.  How do you know which projects will generate profits and which ones are better avoided?  According to Hal Macomber, Executive Vice President at Touchplan and expert Lean consultant, asking a few simple questions before taking on a project can make a big difference on your balance sheet.  The key is to take a project’s profit rate into account, in addition to its duration and size.  Read on for seven tips for more profitable projects.

Profit at the Project Level

The first step is to identify the rate at which a project will make money (also called the profit velocity).  Macomber illustrates the concept with an example scenario.  “If you have a ten-month project that is going to make $200,000, your profit velocity per month is $20,000.  And if you’re looking at two projects you might realize that you only have the staff to do one of them.  One of them is a $200,000 job and the other is a $250,000 job.  You might immediately think that you should take the $250,000 job.  But wait a minute. What’s the profit velocity?  The first project is ten months, so that profit velocity is $20,000/month.  The second project is twenty months, so that profit velocity is $12,500/month.  In this case, it’s actually a worse deal to take the job with the higher profit.”

In addition to profit velocity, there is another key factor to consider: the resources required to deliver a project.  Larger and more complex projects will require more senior staff, whereas junior staff can gain experience on smaller, more straightforward projects.  While the smaller project may have a lower total profit, it might end up costing the company less to execute, depending on the resources available.

Continue reading at:  ConstructionDive

SBA to host surety bond workshop June 27th

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On Thursday, June 27, 2019, the U.S. Small Business Administration (“SBA”) and the National Association of Surety Bond Producers (“NASBP”) will be holding a half-day surety bond workshop.  Topics covered will include:

  • Contract Bonding and Insurance
  • Banking and Finance
  • Risk Management and Legal Concerns
  • Federal Assistance Programs
  • Local Procurement Opportunities
  • Business Development Resources

This event will be held at the Cleveland L. Dennard Conference Center, Atlanta Technical College, 1560 Metropolitan Parkway, SW from 8 a.m. – 1 p.m. ET.

Here is the official SBA event flyer:  SBA Surety Bond Workshop Flyer

Registration is required, because seats are limited:

Click Here To Register or go to www.sba.gov/ga

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