Georgia Tech Procurement Assistance Center

GDOT reports it awarded $60 million in construction contracts in January

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The Georgia Department of Transportation (Georgia DOT) reports that it awarded 25 construction contracts in January of this year for statewide transportation projects totaling $60,038,396.

The largest single investment, worth approximately $9.6 million, was awarded to Plant Improvement Company, Inc. to widen and reconstruct 1.44 miles of roadway on State Route 40 from west of Grove Boulevard to Truss Plant Road in Camden County.  This project will add additional turn lanes on State Route 40.

This contract, with one other widening and reconstruction contract, represents 17 percent or $10.1 million of the awarded funds.

Continue reading at:  AllOnGeorgia

Local, state and federal prevailing wage obligations vary greatly

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Contractors, developers, architects, owners, project managers, and even public bodies often ask the same obvious question when dealing with any type of prevailing wage ordinance or law, “what are my obligations?”  While everyone involved in public construction projects want to comply with prevailing wage mandates, more often than not those involved in such projects are either oblivious to their responsibilities or are mistaken in their belief as to such responsibilities.  This is not surprising in light of the great variance in prevailing wage laws, related rules, and interpretations of such rules and laws on a local, state, and federal level.  It’s unfortunate that there is no set standard or guidebook on the subject.  And, that’s the point of this alert!

What a GC or subcontractor must do under California’s prevailing wage law is entirely different with respect to Illinois law.  Likewise, what a developer or owner needs to ensure on a prevailing wage project under Ohio law is different than pursuant to New York mandates.  There are also great variations in the types of forms required (including the certified transcript of payroll), written notifications and/or legal disclaimers, contract provisions, wage and fringe benefit responsibilities, actual rate determinations per trade and area, potential liabilities, and actual compliance standards.  These variations are controlled on a local and state level where prevailing wage requirements still exist.  For a summary of where state prevailing wage mandates still are in play, the U.S. Department of Labor’s quick summary is quite helpful.

Continue reading at:  JD Supra

Construction claims in the COVID era: lessons learned and best practices

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As we move into the second year of a global pandemic, construction contractors are not only taking stock of project delays and disruption experienced to date, but also preparing for more of the same.  What better time than now for contractors to take affirmative steps to protect themselves from default actions and to preserve their right to a time extension and/or contract adjustment.

Delay and Disruption in a Pandemic

As construction contractors well know, delay to agreed-upon construction schedules can result from a host of circumstances. The COVID-19 pandemic presents numerous challenges that may result in such delays, including, for example, project site closures or restrictions; labor impacts due to employee illness, exposure, and/or quarantine; new health and safety protocols such as on-site screenings; supply chain issues; subcontractor impacts; and delays to Government activities such as permitting and issuing approvals.  Of course, the type of delay and the extent to which a contractor may be entitled to additional time or compensation depend on the circumstances.

A threshold question is whether a delay to the project schedule is excusable in the first instance—i.e., whether the contractor will or should be excused from being found in default by virtue of the delay.  The Excusable Delay clause at FAR 52.249-14 provides some guidance.  This clause excuses contractors from default for failure to perform—including failure to make progress in a manner that endangers performance—if the failure “arises from causes beyond the control and without the fault or negligence of the contractor.”  Of potential relevance to COVID-related delays, the clause identifies specific causes deemed beyond contractors’ control.  These include epidemics, acts of God or the public enemy, and quarantine restrictions, among others.

A second question is whether a contractor delayed by such causes is due any relief.  To establish entitlement to an extension of time, the contractor must show that the cause of the delay was unforeseeable, beyond the contractor’s control and without the fault or negligence of the contractor, and that any Government caused delays were not concurrent with delays caused by the contractor.  To establish entitlement not only to time, but also to additional compensation, the contractor must show that the Government was the “sole proximate cause” of the delay such that “the contractor would not have been delayed for any other reason during that period.”

Continue reading at:  Wiley

DBE gross receipts cap adjusted for inflation

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In December 2020, the United States Department of Transportation (DOT) amended the small business size limit under the Disadvantaged Business Enterprise (DBE) program (section 1101(b) of the Fixing America’s Surface Transportation (FAST) Act (Pub. L. 114-94, Dec. 4, 2015).  The rule, which went into effect on January 13, 2021, increased the DBE gross receipts cap (averaged over the firm’s previous three fiscal years) to $26,290,000 for Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) related work.  This inflationary-based adjustment is an increase over the prior gross receipts cap of $23,980,000 enacted in 2015.  The effect of this rule, which is “not considered a significant economic impact on a substantial number of size entities,” is to allow “some small businesses to continue to participate in the DBE programs by adjusting for inflation.”  This adjustment should provide relief for some DBEs that were close to exceeding the limits from 2018-2020.

Continue reading at:  Construction Law Zone

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

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