Licensing Challenges for Multi-State Design Practices

Architects and engineers typically contract to provide professional design services in a number of states and are, therefore, subject to each state’s licensure laws. It is important for design professionals to be aware of state-specific differences in licensing before entering into contracts in new jurisdictions. Penalties for non-compliance are severe and can reduce or eliminate a design professional’s right to payment under a contract.   Read More ›

Different States Impose Different Limitations on Indemnity and Additional Insured Provisions

Indemnity provisions, also known as hold harmless agreements, are frequently included in construction contracts to transfer the risk of third-party claims. Indemnity agreements involve a promise by which one party (the indemnitor) makes another party (the indemnitee) whole for a loss that the other party has incurred as a result of a third-party claim. Indemnity provisions offer the parties an opportunity to transfer the risk of loss to the party best-suited to bear the risk. In the same way, additional insured requirements can be used to transfer risk from a negligent party to another party’s insurance carrier. While these concept appear simple, the treatment of such provisions varies from state to state based on applicable statutes and court decisions. Read More ›

No Harm, No Foul? - Penalties for Noncompliance When Performing Construction in a Foreign Jurisdiction

An avoidable disaster: A well-respected, hard-working engineer designs and installs a system that meets and exceeds an owner’s contractual requirements. The project was located out-of-state for the engineer, but the promised fee justified the effort. In a rush to meet the project requirements, the engineer failed to confirm and follow the state registration and licensing requirements. After completion, the owner refuses to pay, arguing that the contract is illegal and void due to the engineer’s failure to obtain and maintain a license in this foreign state. The engineer is baffled and asserts that the system is better than the owner asked for – no harm, no foul, right? Unfortunately for the engineer, the owner has a viable argument. Penalties for noncompliance with a state’s registration and licensing requirements can be harsh and must be considered prior to performing work in a foreign state.   Read More ›

Bidding and Performing Public Works Contracts in Other States

Working in a new state can present many new opportunities, but it also comes with many challenges. You cannot assume that the new state’s laws will be identical to your own. Some issues that might come up include: registration and licensing requirements, anti-indemnity statutes, bonding and lien requirements, and public policy limitations on contract clauses such as pay-if-paid clauses, liquidated damages clauses, or no-damages-for-delay clauses. It is critical to be aware of any differences because you may be exposed to penalties or lose rights and remedies you are used to having. Read More ›

Who is and Who is Not Covered by a Public Project Miller Act Payment Bond?

The Miller Act, codified at 40 U.S.C. §§ 3131–3134, represents a Congressional effort to protect those supplying labor and material for the construction of federal public buildings or public works in lieu of the protections they might otherwise receive under state statutes if engaged in the construction of nonfederal buildings.  A Miller Act payment bond guarantees payment to certain parties supplying labor and materials to contractors or subcontractors engaged in the construction, alteration, or repair of any public building or public work of the federal government.  Absent the protection of a Miller Act payment bond, unpaid subcontractors and suppliers could find themselves without a viable remedy (other than a suit against a viable contractor or subcontractor) because there are no lien rights against public property. Read More ›

Executive Order 13658 - Implements Regulations Establishing a Minimum Wage for Federal Contractors

On February 12, 2014, President Obama signed a 5 page Executive Order (EO) that, among other things, will affect the minimum wages that must be paid under a number of agreements with the federal government that have previously not been subject to special rules on minimum wages.

The Department of Labor just issued 337 pages of explanation and regulations on it.   Here are the important take aways… Read More ›

Building the Impenetrable Brick Wall of Project Documentation

Little pig, little pig, let me come in.
No, no, not by the hair of my chiny chin chin.
Then I’ll huff, and I’ll puff, and I’ll blow your house in.

       Joseph Jacobs, English Fairy Tales, Oxford University (1890)

Early in my career as a project manager, years before becoming a lawyer, my manager called me into his office and assigned me to a large new project.  He explained that the project owner had a reputation for being very litigious, and he needed me to aggressively manage the project to avoid costly litigation.  As he explained my assignment, the conversation was reminiscent of The Story of the Three Little Pigs.  Recall that the big bad wolf was able to blow down the first two little pigs’ houses of straw and wood but was unable to destroy the third little pig’s house made of bricks.   Click here for a PDF copy of this article.       Read More ›

State Payment Bond Statutes: Navigating "Little Miller Acts"

Contractors working on public contracts may perform for a number of public owners across a variety of jurisdictions. While it is always prudent for a contractor to know the contractual requirements of each jurisdiction, it is even more important to do so when crossing state lines.  All states have some statute requiring payment bonds on public projects.  They are referred to as “Little Miller Acts” because they are fashioned after the federal Miller Act, 40 U.S.C. § 3131 et seq. Like the federal Miller Act, these statutes require payment bonds on public projects because of the inability to place a lien on public property.  These payment bonds ensure payment to subcontractors and suppliers performing work or supplying materials to the project. Subcontractors on state and local procurements need to know the requirements of these Little Miller Acts to protect themselves in the event they are not paid for their work.  Prime contractors, too, need to understand the Little Miller Acts if they are to defend against claims on their bonds, either on procedural grounds—most often when claims are untimely filed—or on the merits of the claim. Read More ›

Identification of Public Project Payment Bond Claimants

Prime contractors working on public projects are often required to provide a payment bond to ensure adequate financial protection for those subcontractors and suppliers providing labor, materials, equipment, or other services.  For federal government projects, this requirement is contained in the Miller Act.  40 U.S.C. §§ 3131–3134.  Many states have adopted similar laws, commonly known as “Little Miller Acts,” for work performed on state government projects.  Unlike private projects, lien rights do not exist on public work and payment bonds provide an important source of recovery for contractors that have not been paid for their work.    Read More ›

Amending the AIA A401-2007 to Avoid Pro Rata Share Backcharges for Job Site Cleanup

On most construction projects the parties’ contractual agreement addresses who is responsible for keeping the various work areas clean.  Generally, those who generate trash on a project must get rid of the trash.  Typically, it is the responsibility of the subcontractor to clean up and remove from the jobsite, or place in a dumpster provided by the prime contractor, all trash and debris including scrap materials, waste materials, rubbish, packaging materials, and crates and pallets used to ship materials and fixtures to the project site.  Frequently, the subcontract will require the subcontractor to remove all trash and debris resulting from the subcontractor’s work at the end of each work day.   

For a PDF copy of the article as it appears in the Construction Connection Newsletter, click here.  Read More ›