Contractor Community

June 2018

 

House Committee Approves ASA-Endorsed Contractor Payment Protections

The House Armed Services Committee, on May 9, voted to incorporate two key contractor payment protections in the National Defense Authorization Act for Fiscal Year 2019 (H.R. 5515). One amendment (Sec. 855) would require federal contracting agencies to provide with their invitations for bid and requests for proposals details on their change procedures and historical performance data about the resolution of change orders.

ASA Chief Advocacy Officer E. Colette Nelson told the committee, “The provision will help federal construction contractors and subcontractors learn and understand the risk of nonpayment for change orders before bidding and signing a contract.”

The second amendment would exempt the Miller Act from the periodic inflation adjustments to an acquisition-related dollar threshold. The 1935 Miller Act requires a prime contractor on federal construction projects over $150,000 to provide a performance bond for the protection of the government and a payment bond for the protection of subcontractors and suppliers. In 2006, Congress indexed the Miller Act and other procurement thresholds to inflation. Thus, in 2015, the threshold for the Miller Act increased from $100,000 to $150,000. Under current law, that threshold will be reviewed every five years and further increase in $50,000 increments.

Nelson told the Armed Services Committee, “Without this change in the law, a growing number of subcontractors and suppliers will be left without payment assurances.” If enacted, both of these provisions are expected to provide a precedent for public work at the state and local levels.

 

FASA Publishes Revised Edition of Prompt Payment in the 50 States

Many state legislatures have recognized the importance of prompt payment as public policy and interjected their notions of fairness into the traditional private contractual relationship through the enactment of state prompt pay laws. These statutes have attempted to level the playing field in the construction industry by imposing significant monetary disincentives, such as interest and attorney fees upon those holding funds belonging to another for an unreasonable time after the work has been satisfactorily performed.

Construction subcontractors seeking the most current information regarding state laws on prompt payment for commercial construction can now access a newly updated Prompt Payment Laws in the 50 States 2018. This popular manual charts state-by-state breakdown of such details as the time frame for payment from owners to prime subcontractors; from prime contractors to subcontractors; and from subcontractors to lower-tier subcontractors. The manual is a no cost benefit for ASA members and is available under “Contracts and Project Management” in the Member Resources section of the ASA Web site. The manual was prepared by ASA general counsel Kegler, Brown, Hill and Ritter, Columbus, Ohio.

 

House Approves ASA-Initiated Change Order Bill

The U.S. House of Representatives approved H.R. 4754, the “Change Order Transparency for Federal Contractors Act,” by voice vote on May 8. The bill, which was initiated by ASA and the Associated General Contractors of America, would require federal contracting agencies to provide with their invitations for bid and requests for proposals details on their change procedures and historical performance data about the resolution of change orders.

“When enacted, H.R. 4754 will help federal construction contractors and subcontractors learn and understand the risk of nonpayment for change orders before bidding and signing a contract,” said ASA Chief Advocacy Officer E. Colette Nelson. “These transparency provisions are just a down payment on the reform of change order practices on federal construction.”

ASA also is pursuing legislation that would require federal agencies to respond promptly to requests for equitable adjustment, make provisional payment of 50 percent of REAs, and make regular reports to contractors on the status of REAs.

 

ASA Publishes Paper on Preparation and Presentation of Changes and Claims

Despite diligent project management that has recognized and responded to any change or changed condition, most requests for equitable adjustment cannot be resolved until a more formal, detailed change order proposal has been submitted to the prime contractor or owner. ASA’s white paper Preparation and Presentation of Change Proposals and Claims reviews the purpose, structure and format of change proposals and provides tips for negotiating change proposals and claims.

The white paper is available in the Member Resources section of the ASA Web site by logging-in under “LogIn/Access Member Resources” and clicking on “Contract Changes and Claims.”

 

New Federal Bid Protest Procedures Now in Effect

Beginning on May 1, the Government Accountability Office began implementing new bid protest procedures, including an electronic filing system and a filing fee. GAO’s new Electronic Protest Docketing System replaces the various filing methods allowed in the past, including mail, fax and email. The new EPDS Web site includes detailed registration guides and instructions. “Given the tight timelines for filing protests, prospective filers should register on the new GAO system well in advance,” warned ASA Chief Advocacy Officer E. Colette Nelson.

Bid protest rules explicitly place the burden for the timely filing of protests and protest-related submission on the filing party. Nelson also noted that the new EPDS does not remove the existing requirement for an entity filing a new bid protest to provide the procuring agency’s contracting officer within 24 hours of filing the protest with GAO. In addition to the new electronic filing system, GAO has instituted a $350 filing fee, payable at the time of filing, as a condition to the acceptance and processing of a new bid protest.

 

OSHA Announces Intent to Consider Silica Rule Revisions

The Occupational Safety and Health Administration, on May 9, announced its intent to consider revisions to Table 1 in its final rule on Occupational Exposure to Respirable Crystalline Silica. Specifically, OSHA reported that it intends to publish a Request for Information in November 2018.

“This will provide an opportunity for ASA, other construction associations, construction employers and members of the general public to give OSHA input on the workability of the silica regulation,” explained ASA Chief Advocacy Officer E. Colette Nelson.

ASA repeatedly has expressed concerns about the viability of Table 1, since OSHA published its rule on March 26, 2016. Table 1: Specified Exposure Control Methods When Working With Materials Containing Crystalline Silica matches common construction tasks with dust control methods. In some operations, respirators also are needed. Under the OSHA rule, employers who follow Table 1 correctly are not required to measure workers’ exposure to silica and are not subject to the permissible exposure limit. ASA, as a member of the Construction Industry Safety Coalition, asked OSHA to revise Table 1 to make it more workable for more construction employers.

 

OSHA Will Delay Enforcement of Certain Provisions of the Beryllium Standard

OSHA announced that it will delay enforcement of ancillary provisions included in the beryllium standard for general industry until June 25. Under the terms of settlement agreements with petitioners who challenged the rule, OSHA plans to issue a proposal to further extend this compliance date for the ancillary provisions to Dec. 12, 2018.

In a memorandum dated May 9, OSHA said it would begin enforcing certain requirements of beryllium rule in general industry, construction, and shipyards on May 11, as scheduled; those requirements include the permissible exposure limits in the general industry, construction, and shipyard standards; and the exposure assessment, respiratory protection, medical surveillance, and medical removal provisions in the general industry standard.

 

ASA and AGC Officers Discuss Top Industry and Public Policy Issues

During an April 6 meeting in New York City, national officers of the Associated General Contractors of America and ASA discussed top industry and public policy issues, including workforce shortages, price volatility in construction materials, prefabrication in construction, design delegation, and how the two groups can collaborate to increase the use of ConsensusDocs in the construction industry. The ASA and AGC officers meet each year to discuss issues and explore new ways in which the associations can work together. ASA’s representatives were 2017-18 President Jeff Banker, Banker Insulation, Chandler, Ariz.; 2017-18 Vice President and President-elect Courtney Little, ACE Glass Construction Corporation, Little Rock, Ark.; 2017-18 Treasurer Anthony Brooks, Platinum Drywall, Little Rock, Ark.; ASA Immediate Past President Robert Abney, F.L. Crane & Sons, Inc., Southaven, Miss.; and ASA Chief Advocacy Officer E. Colette Nelson. The meeting of ASA and AGC officers took place the day after the annual Engineering News-Record Awards of Excellence luncheon and dinner.

 

DOL Adopts Final Rule on Longshore Workers’ Comp Claims

On April 19, the U.S. Department of Labor’s Office of Workers’ Compensation Programs adopted a new regulation that clarifies how maximum and minimum compensation rates apply to claims payable under the Longshore and Harbor Workers’ Compensation Act and its extensions. The LHWCA, a federal law similar to workers’ compensation, applies to construction performed on navigable waters of the United States and in adjoining areas. Current regulations offer little guidance to employers and injured workers on applying the maximum and minimum provisions. The new rule provides concrete directions on how to apply the maximum and minimum provisions in an individual case. The new regulation took effect on May 21, 2018.

 

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