Georgia Tech Procurement Assistance Center

Billions of dollars in construction funding in FY 2019 funding bills

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On Sept. 13, Congress passed a Fiscal Year (FY) 2019 appropriations bill — which the president is expected to sign into law —t hat will provide significant amounts of funding for military construction projects through the U.S. Army Corps of Engineers (USACE) and Naval Facilities Engineering Command (NAVFAC); hospital, medical clinic and cemetery projects through the Department of Veteran Affairs (VA); and harbor maintenance, lock, dam, levee and environmental restoration projects through the USACE Civil Works Program.

The bill provides a total of $10.3 billion for military construction projects. This is an increase of $241 million, or 2.4 percent, above the enacted FY 2018 level. The bill appropriates $1.6 billion to fund construction, operation, and maintenance of military family housing for fiscal year 2019. This is $173 million above the fiscal year 2018 level and the same as the president’s FY 2019 budget request.

Major and minor construction within the VA is funded at $1.8 billion. In addition, $2 billion is provided for infrastructure repair, with the funding allocated to major and minor construction and non-recurring maintenance. Within the infrastructure total funding, $750 million is targeted to seismic corrections at VA facilities nationwide.

Keep reading this article at: http://advocacy.agc.org/billions-of-dollars-in-construction-funding-in-fy-2019-funding-bills/

OSHA cites 5 contractors in bridge collapse, proposes $87K in fines

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Main span of FIU pedestrian bridge being moved on March 10, 2018, prior to placement on the south pier and north pylon pier.  Labels added by the NTSB.

The Occupational Safety and Health Administration (OSHA) has cited five contractors who had been working on the Florida International University (FIU) pedestrian bridge that collapsed March 15, killing five motorists and one worker and injuring five others. The agency has also proposed fines totaling $86,658 for the group of companies.

  • OSHA issued Figg Bridge Engineers and engineering and inspection firm Network Engineering Services one serious violation each and proposed that each firm be fined $12,934 for exposing employees to physical danger by not removing them from the bridge area when cracks were observed.
  • The agency proposed fines of $25,868 for both post-tensioning specialty contractor Structural Technologies and general contractor Munilla Construction Management and cited both companies with two serious violations each for failing to provide adequate personal fall arrest systems.
  • Finally, OSHA issued concrete formwork contractor The Structural Group of South Florida one serious violation and a proposed fine of $9,054 for also failing to provide an adequate personal fall arrest system. The worker who died, Navaro Brown, worked for Structural Technologies.

“Collectively,” said Kurt A. Petermeyer, OSHA regional administrator, “these employers failed to take appropriate action and provide the necessary protections to their employees while they were working on the bridge on the day it collapsed.” All five companies have 15 days from the receipt of the citations and notice of proposed penalties to protest, request an informal hearing or comply.

Keep reading this article at: https://www.constructiondive.com/news/osha-cites-5-contractors-in-fiu-bridge-collapse-proposes-fines-totaling-8/532921/

See OSHA’s Sept. 18, 2018 press release here: https://www.osha.gov/news/newsreleases/region4/09182018

See earlier article on NTSB reports here: https://gtpac.org/2018/08/23/new-ntsb-report-on-fiu-bridge-collapse-stops-shy-of-naming-a-culprit/

 

OSHA releases free silica compliance tools for contractors

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In an effort to help construction contractors comply with its new Respirable Crystalline Silica Standard for Construction, the Occupational Health and Safety Administration (OSHA) has released instructional videos and other free educational materials about the topic.

Some of the aids provided by the agency, Safety + Health reported, are a customizable slideshow presentation to help employers train construction workers; a short YouTube video about how to protect employees from silica dust; a video series on dust control methods for common construction tasks; and a website with answers to frequently asked questions.

The rule went into effect for the construction industry on Sept. 23, 2017, but OSHA delayed full enforcement by a month to Oct. 23, 2017, giving employers more time to comply and the agency more time to develop detailed enforcement guidelines.

The deadline for laboratory evaluation of exposure samples started on June 23, 2018.

Keep reading this article at: https://www.constructiondive.com/news/osha-releases-free-silica-compliance-tools-for-contractors/530864/ 

South Carolina ‘mastermind’ pleads guilty to cheating government for million-dollar contracts

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He betrayed his wife. He used friends as pawns in illegal schemes.

For years, he bilked the federal government out of tens of millions of dollars in fat federal military construction contracts meant for disabled veterans, women and African-Americans.

And on Tuesday of last week, Thomas Brock of Camden faced his reckoning.

“I find you guilty,” U.S. District Judge Michelle Childs told Brock, 61, in a sparsely attended hearing at the U.S. federal courthouse in Columbia, SC.

Brock will be sentenced in December and is free on bond until then. He could be sentenced to up to nine years in prison, assistant U.S. Attorney DeWayne Pearson said August 28th.

Keep reading this article at: https://www.thestate.com/news/local/crime/article217449050.html

New NTSB report on FIU bridge collapse stops shy of naming a culprit

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Mar. 15, 2018 bridge collapse in Miami Florida. (Photo: Florida International University)

On Aug. 9, the National Transportation Safety Board released the latest update on its investigation into the March 15 Florida International University pedestrian bridge collapse. It still, however, isn’t ready to identify the probable cause of the structure’s failure despite photo evidence of cracks — some fissure-like — in the bridge deck and other areas, presumably that developed after the prefabricated span was set in place just a few days before the fatal incident.

The bridge was transported into position from its offsite location on March 10 to much fanfare, while its building method, accelerated bridge construction, was touted as a way to deliver such structures with minimal interruption to traffic. Five days later, the bridge collapsed onto vehicular traffic below, killing six — one bridge worker and five vehicle occupants — and injuring several others.

The collapse occurred while workers were tightening, or re-tensioning, steel rods at the bridge’s north end, including at diagonal member 11, after they were de-tensioned on the day of the move.

Keep reading this article at: https://www.constructiondive.com/news/new-ntsb-report-on-fiu-bridge-collapse-stops-shy-of-naming-a-culprit/530346/

See NTSB reports at:

Construction contract disputes are getting longer, more complex

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Construction contract disputes across the world are getting longer, more complex and more expensive, according to the “Global Construction Disputes Report 2018” from design and consultancy firm Arcadis.

The value of North American disputes — or total costs added to a project for the additional work being claimed — dropped for a fourth consecutive year to $19 million in 2017, compared with the $43 million global average, the report found. Meanwhile, the average length of North American disputes increased from 15.6 months in 2016 to 17.7 months last year, exceeding the global average of 14.8 months.

Contract errors and/or omissions were the top cause of disputes in North America last year, followed by poor contract administration, which was trailed by failure on the part of an owner, contractor or subcontractor to understand or comply with contractual obligations.

Social infrastructure and the public sector collectively saw the most disputes while the transportation sector saw the second most.

Keep reading this article at: https://www.constructiondive.com/news/report-contract-disputes-are-getting-longer-more-complex/527970/

State, local governments could spend $275 billion on construction this year: Where the money will go

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According to the latest U.S. Census Bureau figures on the annual rate of construction spending, the country’s state and local governments are on track to spend more than $275 billion on nonresidential, taxpayer-funded construction initiatives this year, with highway and street ($93.5 billion), education ($72.5 billion) and transportation projects ($31.7 billion) together garnering the lion’s share of funds.

State and local airport spending has ramped up to an annual rate of $14.5 billion from a November 2011 low of $9.16 billion, according to additional data provided by Governing. Construction of corrections facilities declined the most of any other major spending category in the last decade, from an $8 billion peak in November 2008 to its current level of $4.6 billion, although some of that decline is likely related to the trend toward privatization of prisons and jails.

Highway and street spending, currently $93.5 billion, has remained relatively flat with only a small peak of $105 billion in January 2016. Spending on primary and secondary schools, which now stands at $46.7 billion, has never returned to its pre-recession highs.

Keep reading this article at: https://www.constructiondive.com/news/state-local-governments-could-spend-275b-on-commercial-construction-this/527585/

What contractors need to know about arbitration

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Many construction firms have never had a legal dispute that couldn’t be resolved quickly and amicably without a lawyer. But for those who aren’t so lucky, it can sometimes be surprising to take a good look at a construction agreement to see what legal remedies are available and find that a traditional jury trial is not even an option.

In those cases, the last legal stop could be arbitration.

Contractors sometimes conflate arbitration with mediation, which is another form of alternative dispute resolution in which contractors try to work out their differences with the assistance of a neutral third party well versed in construction law who is only there to be a sounding board.

Keep reading this article at: https://www.constructiondive.com/news/the-dotted-line-what-contractors-need-to-know-about-arbitration/523167/

Beware of these common construction estimating mistakes

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Completing projects within budget is a constant challenge facing the construction industry.

In the past three years, only 31 percent of all projects came within 10 percent of their budgets.

To top it off, 78 percent of engineering and construction companies believe project risks are rising. Suffice it to say, there is room for improvement.

Here are five construction estimating mistakes you should be aware of and best practices to put in place to avoid becoming their next victim (registration required): https://content.industrydive.com/gordian-cd-infographic-avoidable-construction-estimating-mistakes/

 

Multiple defendants charged with 22 counts of fraud and money laundering involving $200 million in small business contracts

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A federal grand jury returned a twenty-two count indictment on April 3rd, charging three defendants with a 12-year fraud and money laundering scheme involving over $200 million in government-funded contracts intended to benefit small businesses.

The indictment names two individuals, Brian L. Ganos and Mark F. Spindler, both of Wisconsin, and the business Sonag Company, Inc. as defendants.  In a related case, Nicholas Rivecca, Sr., also of Wisconsin, agreed to plead guilty to conspiring to defraud the United States.

The indicted defendants are charged with a conspiracy to commit mail fraud and wire fraud.  The alleged conspiracy involves operating construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who did not actually control the companies.  The conspirators then fraudulently obtained small business program certifications to win government-funded contracts to which they were not entitled.

Specifically, court documents allege the following:

  • Nuvo Construction Company, Inc., was misrepresented in order to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration (SBA) and as a Disadvantaged Business Enterprise (DBE) from Milwaukee County.  However, the disadvantaged owner worked full-time for a different entity in Minnesota and did not actually control Nuvo.
  • C3T, Inc. was misrepresented to be majority owned and controlled by another individual to obtain verification as a Service-Disabled Veteran-Owned Small Business.  In reality, for long stretches, the “owner” had virtually no involvement in C3T.
  • Pagasa Construction Company, Inc. was misrepresented to be majority owned and controlled by a third disadvantaged individual in order to obtain certification as a Small Disadvantaged Business from the SBA.  In reality, the owner relied on the assistance of conspirators to form Pagasa.

The federal indictment alleges that the defendants used their certifications to obtain over $200 million in federal, state, and local contract payments.  These included federal construction contracts that were set aside for Small Disadvantaged Businesses or Service-Disabled Veteran-Owned Small Businesses.  The indictment also alleges that the scheme included using Nuvo’s DBE certification to win ready-mix concrete contracts based on the false representation that Nuvo provided ready-mix concrete independently when, in truth, Nuvo’s concrete operations depended heavily on Sonag Ready Mix.  As a part owner of Sonag Ready Mix, Nicholas Rivecca, Sr. agreed to plead guilty to that portion of the scheme.

The government alleges that the conspirators engaged in efforts to conceal the scheme and obstruct investigations into the matter; when interviewed, Ganos and Spindler each gave materially false statements to federal agents.

The indictment also alleges that Ganos conspired with Sonag Company, Inc. and others to launder proceeds of the fraud scheme in order to disguise and conceal the nature, source, and location of those fraud proceeds.  As a part of that conspiracy, Ganos is alleged to have transferred fraud proceeds from accounts of Nuvo and C3T to accounts that Ganos controlled.  The indictment further charged Ganos with three counts of concealment money laundering transactions, one of which involved the purchase of a Corvette with proceeds of the fraud scheme, and seven counts of spending money laundering transactions.

The maximum penalties for each of the wire and mail fraud-related charges are 20 years in prison, a $250,000 fine, and forfeiture of criminal proceeds.  The maximum term of imprisonment for conspiring to defraud the United States is five years.  The maximum term of imprisonment for the money laundering conspiracy and for each of the three concealment money laundering charges is 20 years in prison.  The maximum term of imprisonment for each of the seven spending laundering charges is 10 years in prison.  Each of the 11 money laundering charge also carries a fine of up to $250,000 or twice the amount laundered and subjects the defendant to forfeiture of all money and property involved in the laundering transaction.

Assets of the defendants — including real property, a 2014 Chevrolet Corvette Stingray Convertible, and more than $2.2 million seized from two bank accounts — are subject to civil forfeiture actions filed by the federal government.

The following agencies are participating in this investigation: the Federal Bureau of Investigation; U.S. General Services Administration, Office of Inspector General; Department of Veterans Affairs, Office of Inspector General; Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service; U.S. Department of Transportation, Office of Inspector General; U.S. Small Business Administration, Office of Inspector General, Investigations Division; Defense Contract Audit Agency; and the U.S. Army Criminal Investigations Command Major Procurement Fraud Unit.

An indictment is only a charge and not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Source: https://www.justice.gov/usao-edwi/pr/multiple-defandants-charged-fraud-and-money-laundering-scheme-involving-over-200

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