The Construction Contract Review

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They say that any publicity is good publicity....but I'm not so sure. Make sure you do not end up on the news like this. Get your license!  (the interesting story starts after the commercial...sorry)

Key Questions for Your Construction Attorney

What to ask an Attorney -What questions can you ask an attorney to find out if he/she can help you, or is just someone eager to start billing.

Not surprisingly, there are many attorneys that will say anything in order to get a paying client. Their belief is that "its a legal problem" so they are qualified to help. You want to be sure that the attorney you select knows his or her stuff in the construction field.

Some typical questions would be:

Do they know the difference between construction-defect and construction law? (Surprisingly, there will be few attorneys outside the area of construction law that can intelligently define the differences, and if they cannot describe either to your satisfaction, then you should move on). Many attorneys that are not familiar with either area of law, think all construction related disputes are "construction defect".

Do they know how to calculate or determine CPM? (What is CPM?)

Do they know what float is? Who usually owns it?

How do they calculate or determine: general conditons, acceleration or compression, as-builts, red-line, change order impact (cost or time or both), delay impact, interference...?

How well do they know mechanics liens, design professional liens, stop notices... these are all legal situations, where any attorney should know the basic laws, but if they don't, then you shouldn't let them get up to speed at your expense. Find an attorney that already knows this area of law.

How well do they know indemnification, subrogation, Miller act, construction bonds (performance bonds, bid bonds, payment bonds, etc.), the different types of insurance. How well do they know the difference in public works projects vs. private works projects.

Do they know contractor licensing laws, notices such as preliminary notices, notice of completion, conditional and unconditional releases, abandonment. Do they know what conditions allow for total disgorgement.

These are typically questions that will help ferret out the construction law poseurs and give you a better feeling about who meets your qualifications as a knowledgeable construction law attorney.

via www.construction-laws.com

Thought this was a nice article from Scholefield Associates, P.C., a San Diego construction firm. Construction legal issues are unique and distinct from other legal issues and require appropriate expertise.

When I first started as general counsel to a construction company, I inherited some old construction disputes that were being handled by excellent litigators. However, those otherwise excellent litigators were not very experienced or focused on construction disputes. I found over time that the prosecution of those cases lacked a certain polish.

A similar example is often found on the financial side of a construction business. Percentage of completion accounting can be learned by accountants, but some financial experts just intuitively "get it."

Have you had any similar experiences on a construction dispute handled by a non-construction attorney?

Business & Technology | URS Corp 4th-qtr profit falls 25 percent | Seattle Times Newspaper

URS Corp 4th-qtr profit falls 25 percent

URS Corp., an engineering and construction services company, said Tuesday that its profit fell 25 percent in the fourth quarter as revenue fell by the double-digits.

The Associated Press

SAN FRANCISCO —

URS Corp., an engineering and construction services company, said Tuesday that its profit fell 25 percent in the fourth quarter as revenue fell by the double-digits.

The company earned $33.8 million, or 41 cents per share, in the three months that ended Jan. 1. That is down from the $45.2 million, or 54 cents per share, that it earned a year earlier.

Adjusted profit of 65 cents per share, which excludes a write-down for the discontinuation of a trade name, beat a 55 cent per share prediction of analysts polled by Thomson Reuters.

Revenue fell 22 percent in the quarter to $2.11 billion from $2.71 billion, short of the $2.35 billion analysts had expected. All three of the company' segments - infrastructure and environment, federal services, and energy and construction - posted lower revenue.

URS's 2010 profit forecast was for earnings in a range of $3.35 to $3.45 per share, higher than the $3.25 forecast from analysts.

For the entire year, URS's profit rose 22 percent to $269.1 million, or $3.29 per share, from $219.8 million, or $2.59 per share, the year before. Yearly revenue fell 8 percent to $9.25 billion from $10.09 billion.

The companys backlog at Jan. 1 rose slightly to $17.3 billion from a year earlier.

URS shares rose 74 cents to $48.40 in after-hours trading Tuesday after closing the regular session up 87 cents at $47.66.

via seattletimes.nwsource.com

U.S. Office, Shopping Center Construction Spending May Fall 13% - Bloomberg.com

U.S. Office, Shopping Center Construction Spending May Fall 13%

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By Daniel Taub

Jan. 6 (Bloomberg) -- Construction spending on hotels, office buildings and retail centers may fall 13 percent this year, the second straight annual decline amid a drop in property prices, the American Institute of Architects said.

The Washington-based group’s forecast is more severe than an estimate it made in July, when it predicted a 12 percent decrease. Spending will turn “marginally” higher in 2011, the group said today.

“The magnitude of the downturn has set in,” Kermit Baker, the group’s chief economist, said in an interview. This year’s expected drop compares with a decline of about 20 percent in 2009. “Another bad year is the bottom line, but there are some prospects of recovery as we get into 2011.”

U.S. commercial real estate values sank to the lowest level in seven years in October as job losses cut demand for apartments, offices and retail space, Moody’s Investors Service Inc. said last month. Office vacancies may approach 20 percent in 2010, according to Jones Lang LaSalle Inc. and Grubb & Ellis Co. Unemployment was 10 percent in November after a 26-year high of 10.2 percent the prior month, the Labor Department said.

Commercial construction spending will probably have a “marginal increase” of 1.8 percent next year, according to the architects group.

That forecast “still implies a weak first half

via www.bloomberg.com

Caterpillar World Headquarters Awarded LEED-EB(R) Gold from United States Green Building Council – Press Releases on CSRwire.com

Caterpillar World Headquarters Awarded LEED-EB(R) Gold from United States Green Building Council

Submitted by:Caterpillar Inc.

Categories:Clean Technology, Sustainability

Posted: Feb 05, 2010 – 09:14 AM EST

 

PEORIA, Ill., Feb. 05 /CSRwire/ - The Caterpillar Administration Building, which serves as the company's world headquarters, has been awarded LEED-EB® O+M (Leadership in Energy and Environmental Design for Existing Buildings: Operations and Maintenance) Gold certification from the United States Green Building Council (USGBC). Achieving the certification makes the Caterpillar facility, located in downtown Peoria, the first building in Illinois outside of the Chicago metropolitan area to become LEED-EB certified and the second building in the Caterpillar family to earn the recognition. The Cat Financial Center in Nashville, Tennessee, received LEED-EB certification in April of 2009. LEED is a third-party certification program and a recognized benchmark for the design, construction and operation of high-performance green buildings. LEED-Gold certification is the second highest rating obtainable in the system.

LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas: sustainable sites, water savings, energy and atmosphere, materials and resources and indoor environmental quality.

"Every day members of Team Caterpillar look for opportunities to apply their expertise, technology and common sense to address environmental issues," said Greg Folley, vice president of Caterpillar's Human Services Division. "Successfully identifying and managing our environmental footprint reduces environmental impacts where we all live and work, makes good business sense and is simply the right thing to do for our community, employees, customers and shareholders."

Specific highlights include:

• Decreased energy consumption by 40 percent through improved control systems, operating methods, and lighting automation.


• Implemented a new irrigation system for all landscaped areas resulting in a 50-percent water use reduction.


• Implemented a green cleaning program with new environmentally-friendly chemicals and developed an improved pest management program utilizing the least toxic methods.


• Leveraged Caterpillar's purchasing and recycling practices to reduce the environmental impact of materials used and conducted waste stream audits to drive continuous improvement efforts.

More information on the LEED green building certification system is available at www.usgbc.org/LEED.

About Caterpillar:
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines a

via www.csrwire.com

Green Construction Technology: Concrete Bricks

Pozzotive Plus CMUs and Concrete Brick from Kingston Block

Pozzotive Plus concrete masonry units (CMUs) and concrete facing brick are manufactured using up to 30% post-consumer recycled glass as a portland cement substitute and an average of 50% post-consumer recycled masonry aggregate from local sources in the Northeast. The recycled glass pozzolan (with the tradename Pozzotive), made by Empire Resource Recycling, LLC, is ground to about 15 microns (a finer powder than portland cement) and used in place of the cement, saving about one ton of CO₂ for every ton of cement replaced.

Pozzotive Plus CMUs have been made with up to 90% recycled aggregate, though 50% is typical. Compared to conventional CMUs and brick, Pozzotive Plus products require less energy to produce, are stronger, and have greater moisture and chemical resistance, according to the company. Both products meet and exceed ASTM C-90 for Loadbearing Concrete Masonry Units and C-129 for Nonloadbearing Concrete Masonry Units, and the brick meets and exceeds ASTM C-1634 for concrete facing brick. The company’s brick is manufactured with a standard bed depth of 3-5/8" and is available in three sizes: Modular (2-1/4" x 7-5/8"); Ledge (2-1/4" x 15-5/8"); and Royal (3-3/4" x 15-5/8"). In addition a Partition brick is available for interior applications (5-5/8" x 3-3/4" x 15-5/8"). Architectural CMUs are available in a wide range of shapes and sizes. Both the brick and CMU come in nine standard colors, in either ground-face or suede finish.

What makes this product green?

• Exceptional durability or low maintenance
• Post-consumer recycled content
• Reduce impacts from construction or demolition

LEED Credit relevance:

• MR Credit 4 — Recycled content

Reviewed in EBN: November 2009
View GreenSpec listing

More information:

Kingston Block & Masonry Supply, LLC
270 North Ave., Suite 200
New Rochelle, NY 10801
Phone: 914-633-3393
www.kingstonblock.com

via www.buildinggreen.com

Are there “green” provisions or specification in a proposed contract you are bidding on?  Have you identified the risks of those clauses and are you prepared to handle those new contractual risks?  Click here to send us your contract and we will provide a complimentary attorney review.

Absolutely Free Home Remodeling – A Tough Way to Make a Living

Offering absolutely free home remodeling to consumers is a tough way to make a living.  But many home remodeling contractors are often at risk for doing expensive home repairs and remodeling without getting paid a dime – legally.

 

Numerous states have strict statutes that, in the name of consumer protection,

offer draconian remedies against what legislatures perceive to be unscrupulous contractors.  Honest, good-faith contractors, however, can get caught in some of these legislative traps if they are not diligent in their paperwork. 

 

The Illinois Home Repair and Remodeling Act (HRRA) is a good example of requirements for consumer contracts. For any home repair or remodeling contract over $1,000, a person engaging in the business of home repair and remodeling is required in Illinois to provide the consumer with a copy of the "Home Repair: Know Your Consumer Rights" pamphlet.  A clear, concise, and complete written contract that spells out the who, what, where, when, and total cost of the project is required.  In addition, the contract is required to give the name and address of the person engaged in the business of home repair or remodeling. If the contractor uses a post office box, mail service, or agent to receive business correspondence, the contract must state the contractor's home address. 

 

 

Related enforcement statutes and court cases interpreting these statutes have had some painful outcomes for contractors.  Failure to abide by the HRRA may preclude a contractor from recovering unpaid contract balances or extra work, force a return of any money received, open up a contractor to further damages, attorney fees or possible sanctions from the Attorney General.  Homeowners in Illinois have received FREE home additions from contractors who failed to follow some of these statutes. 

The attorneys at Mayfield | Broderick can help contractors develop consumer contracts and practical checklists for dealing with residential homeowners.  It would be a lot cheaper to pay us a small flat fee for this preventative consultation than to perform free work for a consumer – can’t make that up in volume.

Photo Credit: http://www.flickr.com/photos/nickdawson/522097877/

What You Need to Know About Independent Contractors

Independent subcontractors are common service providers in the construction and other industries.  It is critical that a business owner correctly determines whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors.

 

The Illinois Employee Classification Act, effective in 2008, establishes specific criteria to determine if an individual performing services for a construction contractor is an employee or an independent contractor. While targeted specifically at the construction industry and for the collection of unemployment taxes by the Illinois Department of Employment Security (“IDES”), the criteria identified are likely to be used as a guide by other administrative agencies and for other industries.  However, the substantial penalties and other remedies would apply only to the construction industry in Illinois. 

 

Under the law, an individual performing services for a contractor is presumed to be an employee unless:

 

1. the individual is free from control or direction over the performance of the service for the contractor;
2. the service performed is outside the usual course of services performed by the contractor and
3. the individual is engaged in an independently established trade, occupation, profession or business.

 

The IDES looks to the actual rather than the alleged relationship of the parties, and the designations and terminology used in any agreements or contracts between them are not controlling. 

 

Free from Direction or Control

In determining the relationship between the parties, "control" or "direction" means that an employer has the right to control and direct the worker, not only as to the work to be done, but also as to how it should be done, regardless of whether that control is actually exercised.  Some of the numerous relevant factors considered include the right to change work methods, a set schedule requirement, is the relationship permanent, can the subcontractor hire/fire/pay its own assistants,

 

If these and other factors lead to the conclusion that the individual hired is under the direction and control of the employing entity, than that individual will be considered an employee. 

 

Outside the Usual Course of Services

This factor is satisfied if the service provided by the individual is either outside the usual course of business of the employing entity or performed outside its place of business. A good example would be janitorial service to company that does not provide janitorial services - services which merely render the place of business more pleasant or are not necessary to the employing entity's business are outside the usual course of business.

 

Engaged in an Independently Established Trade, Occupation or Business

For determining independent contractor status, "engaged in an independently established trade, occupation, or business" is interpreted to mean that the individual has a proprietary interest in the business which he or she can sell, give away or operate without hindrance from any other party.  While no one factor will determine if an individual is engaged in an independently established trade, occupation, profession or business, the business reality or "totality of the circumstances" will determine the presence of this condition.  According to the regulations, the following factors are viewed to determine whether the individual is engaged in an independently established trade, occupation, profession or business:  whether the individual offers his services to the general public; has its own tax, unemployment, and other state accounts for the payment of its various taxes; existence of an independent office location; separate licensing, when appropriate; and the right to keep profits or losses from the activity. 

 

BOTTOM LINE

Illinois and many other states have a very narrow definition of what an independent contractor is.  The laws and regulations are slanted towards a finding that almost any worker is an employee and not an independent contractor.  The attorneys at Mayfield | Broderick can help you make these determinations and avoid the substantial penalties for misclassification of an employee as an independent contractor.

Disaster Response — Habitat for Humanity Int'l

Haiti Earthquake

A powerful 7.0-magnitude earthquake struck Haiti on January 12, 2010, destroying thousands of buildings and homes. Over a million people have been affected by this devastating catastrophe. Habitat has worked with Haiti for over 26 years and will continue to serve the people there by helping to rebuild. Please make a tax-deductible donation today to support the survivors of the disaster.

via www.habitat.org

Habitat is addressing shelter solutions for low-income families affected by the 7.0 magnitude earthquake that struck Haiti on January 12, 2010. Habitat’s ability to respond effectively to this disaster will require support from donors, corporate partners and other community organizations. To lend support, please donate today. www.habitat.org

Happy Holidays

The Construction Contract Review is going on a bit of a winter shut down.  End of the year work push, kids' holiday shows, other fun (and some not so fun) social obligations, and quality time in the northwoods of Wisconsin require time for some re-tooling.  I'll be back January 4 and am looking forward to a fantastic 2010.  Stay safe and enjoy your holidays!