My Roof, My Rules: Arbitrators May Determine Their Own Jurisdiction When the Parties Delegate that Authority

By Amandeep S. Kahlon on September 20, 2017 Posted in Contract Interpretation

An issue that repeatedly comes up in construction disputes is the scope of an arbitration agreement. Courts generally interpret agreements to arbitrate broadly, and, where the arbitrability of a specific claim has been at issue, courts often defer, allowing such questions to be answered by the arbitrator. One recent opinion from the Ninth Circuit followed this general approach.

In Portland General Electric Co. v. Liberty Mutual Insur. Co., an owner contracted with a general contractor to construct a power plant in Oregon. The work started in 2013. In the contract, the parties consented to the exclusive jurisdiction of any federal court in Oregon. The contract also required a performance bond, and the bond agreement included a statement that “any proceeding, legal or equitable, under this bond may be instituted in any court of competent jurisdiction in the location in which the work or part of the work is located.”

In addition to the bonding requirement, the owner also required the contractor to obtain a written guaranty of performance from its parent company. In the guaranty, the owner and parent company consented to submit any disputes in connection with the guaranty to binding arbitration under the International Chamber of Commerce (ICC) Rules. The guaranty also specified that, once the arbitration proceeding was commenced, either party could implead any other entity (with its consent) in, and/or raise any claim against, any other entity provided such claim arose out of or in connection with an agreement with a subcontractor or the guaranty.

On December 18, 2015, the owner terminated the general contractor. In response, the contractor’s parent company filed a demand for arbitration. The contractor claimed it had not defaulted, that the termination was wrongful, and that the owner was due nothing under the guaranty agreement. Shortly thereafter, the parent company impleaded the surety under the performance bond invoking the impleader provision of the guaranty agreement and Article 7 of the ICC Rules. The surety consented and sought relief similar to that of the parent company.

The owner objected to the inclusion of the surety and sought a preliminary injunction in federal district court to prohibit joinder of the surety into the arbitration. The owner claimed that the contractor’s parent company had improperly impleaded the surety as part of a collusive effort to arbitrate claims that the owner and surety had agreed to litigate in Oregon courts. The district court granted the injunction, and the surety appealed.

On appeal, the surety argued that the owner’s election to arbitrate in the guaranty agreement and the ICC Rules left the issue of arbitrability of a particular claim up to the arbitrator and not the district court. The Ninth Circuit agreed with the surety, reversed the district court’s decision, and remanded the question of whether the surety’s claims could be arbitrated to the ICC arbitrator. The Ninth Circuit noted that “parties may delegate the adjudication of gateway issues such as arbitrability of claims to the arbitrator if they clearly and unmistakably agree to do so.” The court then determined that the incorporation of the ICC Rules into the guaranty accomplished just such a delegation, where the rules expressly set forth in Article 6(3) that the arbitral tribunal had the power and authority to determine its own jurisdiction over a particular claim or question. The court reached this conclusion even though neither the performance bond nor the construction contract provided for any agreement to arbitrate disputes between the surety and the owner.

The Ninth Circuit showed deference to the parties’ agreement to arbitrate, and the court’s decision highlights the importance of dispute provisions in contracts, even when found in exhibits or addenda incorporated by reference (e.g., bond or guaranty agreements). Here, the owner likely did not anticipate addressing any claims under the bonds in arbitration, but, because of the guaranty’s broad impleader language and its incorporation of the ICC Rules, the owner ended up in a disfavored forum. And, although the arbitrator may later determine he or she lacks jurisdiction over the surety’s claims, when give the opportunity, arbitrators often reach the opposite conclusion and find a claim arbitrable. Given that reality, the Portland General Electric case demonstrates that all construction industry participants should be mindful of the deference courts will give to arbitrators when determining the arbitrability of claims.

Can My Company Protest the Addition of Other Contractors to the IDIQ Pool?

By David W. Owen on September 14, 2017 Posted in Bid Protests, Government Contracts, Team Announcement

Bradley partner Aron Beezley recently published a Law360 Expert Analysis article on the jurisdictional issues associated with bid protests challenging the addition of other contractors to an indefinite-delivery, indefinite-quantity (or IDIQ) pool. As discussed in the article, the answer to the question, “Can my company protest the addition of other contractors to the IDIQ pool?” depends on whether you ask the Government Accountability Office (GAO) or the U.S. Court of Federal Claims. According to GAO, the answer is “no.” According to the Court, however, the answer is “yes.” Thus, as the article explains, companies seeking to challenge the addition of other contractors to an IDIQ pool should do so at the Court of Federal Claims, rather than at GAO.

The Expert Analysis article was published by Law360 on September 14, 2017. If you have any questions about any of the topics discussed in the article, please do not hesitate to contact Aron Beezley.

Texas Construction Alert: Important Reminder about Construction Claims for Builders and Contractors

By Ian P. Faria and Jon Paul Hoelscher on September 7, 2017 Posted in Construction Developments

Texas Construction Alert: Important Reminder about Construction Claims for Builders and Contractors In light of the recent devastation caused by Hurricane Harvey, we want to remind area builders of the 2011 law that applies to disaster remediation contractors performing work in Texas.

In 2011, wildfires ravaged over 40,000 acres of Texas land located in Bastrop and Grimes Counties. In addition to those wildfires, Texas experiences tornadoes, hail storms, floods and hurricanes on a regular basis. As a result, residential, commercial and industrial properties and structures required construction remediation. While many honest and hardworking Texas construction companies were there to help, some communities were plagued by unscrupulous contractors, referred to as “storm chasers,” who took money up front and failed to perform services as promised. In response to the misdeeds of these storm chasers, the Texas Legislature enacted the Disaster Remediation Contracts Statute which affects contractors who engage in remediation construction projects stemming from a natural disaster.

A new law was passed in 2011 by the Texas Legislature and was included in Chapter 58 of the Texas Business & Commerce Code.

The law applies to disaster remediation contractors, which is identified as those engaged in the removal, cleaning, sanitizing, demolition, reconstruction, or other treatment of improvements to real property performed because of damage or destruction to that property caused by a natural disaster. A natural disaster is defined as widespread or severe damage, injury, or loss of life or property related to any natural cause, including fire, flood, earthquake, wind, storm, or wave action, that results in a disaster declaration by the governor. This means that any construction remediation project related to a natural disaster falls under this new law.

The statute requires any agreement for disaster remediation work be reduced to a written contract. Contracts for disaster remediation projects must contain a disclosure statement with specific language outlining the statute’s prohibitions in boldfaced type of at least 10 point font:

This contract is subject to Chapter 58, Business & Commerce Code. A contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered.

The requirements and legal effects of the statute cannot be waived by any party through contract or other means. Additionally, any violation of the statute is also considered a violation of the Texas Deceptive Trade Practices Act which allows for the recovery of attorneys’ fees and multiplying damages in certain instances.

The law also provides that a contractor may not require a full or partial payment before the contractor begins work and may not require partial payments in an amount that exceeds an amount reasonably proportionate to the work performed, including any materials delivered. Therefore, a contractor cannot require a down payment, draw or other form of payment until work begins.

The law does not apply to remediation contractors if they maintain a physical business address in the county or a county adjacent to where the work is to be performed for one year prior to the date of contracting. This exception allows “local” companies to continue business as usual. However, the best practice would be to have your contracts and business practices set to comply with this law so that you can be ready to help in the event the next natural disaster is more than a county away. This new law affects all contracts entered into on or after September 1, 2011.

Bradley Partner Aron Beezley Appointed Vice Chair of ABA Bid Protest Committee

By David W. Owen on September 5, 2017 Posted in Bid Protests, Miscellaneous, Team Announcement

Bradley is pleased to announce that Aron Beezley was appointed vice chair of the American Bar Association’s Bid Protest Committee. The committee’s mission is to provide timely information on developments and a forum for discussing significant issues involving the resolution of bid protests within the federal government, including the agencies, the GAO, and judicial forums. The committee also conducts studies on the efficacy of the system for resolving bid protests of federal agency procurements.

If you have any bid protest-related questions, please feel free to contact Mr. Beezley.

When Substantial Compliance ‘Trumps’ Strict Construction of Florida Lien Laws

By Amandeep S. Kahlon on August 29, 2017 Posted in Lien Law, Miscellaneous

When Substantial Compliance ‘Trumps’ Strict Construction of Florida Lien Laws In Florida, to perfect its right to lien a property, a subcontractor is required to submit a Notice to Owner (NTO) within 45 days of commencing its work. Among other requirements, the NTO must list the contractor’s name and be served upon the owner and any party designated for service by the owner within the time period described above. Generally, Florida courts have taken a lenient approach to compliance with the substantive requirements of the NTO under applicable law. However, errors or omissions in the NTO can be grounds for voiding a subcontractor’s lien.

In Trump Endeavor 12 LLC v. Fernich, Inc. (d/b/a The Paint Spot), a Florida District Court of Appeal recently addressed how using the incorrect name of the general contractor in an NTO affected a painting subcontractor’s lien rights on a resort renovation project. After a fact-intensive analysis, the court determined that the subcontractor had substantially complied with the requirements of Florida’s lien laws, and, that absent any adverse impact to the owner, substantial compliance was sufficient to preserve the subcontractor’s lien rights.

The court’s decision keyed in on the following facts: (1) The defect in the NTO resulted from the owner’s providing the subcontractor with a notice of commencement that listed the wrong general contractor; (2) the correct general contractor, designated by the owner for receipt of the NTO, received actual and timely notice that the subcontractor was supplying materials to the project; (3) the general contractor treated the subcontractor as a potential lienor during the performance of the work by having the subcontractor attend meetings and sign partial lien waivers in requesting payments; and, (4) the owner could not demonstrate any adverse impact caused by the error on the NTO. The court reached its conclusion despite the fact that the subcontractor had received notice of the defect in its NTO prior to commencing its work but failed to correct the deficiency.

The court awarded fees and costs to the subcontractor, and it’s likely that the award caused the final judgment to balloon substantially from the subcontractor’s original lien amount of $32,535.87. Further, the owner also faced the sunk costs of its own attorneys’ fees through the trial and appeal. Rather than relying on an uncertain and factually dependent interpretation of Florida lien law, the owner would have been better served by settling the lien amount directly with the subcontractor to avoid the substantial added costs of litigation—costs that may have ultimately dwarfed the original lien.

The Trump case demonstrates that Florida courts may go to great lengths to preserve a subcontractor’s lien rights. However, the court also noted that the timing requirements in Florida’s lien laws require strict compliance, so the lack of actual notice within the 45-day prescribed period on all required parties may void a subcontractor’s lien rights. Understanding the Florida courts’ approach to these lien law issues is important because reliance on an incorrect interpretation of compliance requirements may result in an unfavorable ruling and the assessment of attorneys’ fees and costs (Note: non-compliant lien claimants may also be exposed to slander of title damages).

This case also illustrates the importance of getting the lien requirements straight before one begins work in a given jurisdiction. Many jurisdictions provide for notice prior or shortly after beginning work. And, the case is a reminder that, if you are informed that your lien notice is somehow defective, consult a lawyer about whether and how to correct it.

OSHA and Workplace Violence: What Contractors Need to Know

By Amy Elizabeth Garber on August 17, 2017 Posted in Construction Developments, Labor & Employment, Safety

OSHA and Workplace Violence: What Contractors Need to Know Although most contractors go to great lengths to promote jobsite safety, the fatal injury rate in the construction industry – which employs almost 6.5 million people – still exceeds that of any other U.S. industry. The Occupational Safety and Health Act (OSHA) has an entire section of regulations just for contractors. The OSHA regulations help contractors mitigate jobsite hazards such as falling, electrocution, and chemical exposure. Outside of these known jobsite risks looms the less familiar, but possibly just as dangerous, threat of workplace violence. Workplace violence may include any act of violence, by any individual, against an employee. Employers in all industries may face OSHA citations for failing adequately to prevent it. Yet OSHA does not have a single standard that specifically addresses workplace violence. So what is a contractor to do?

Although OSHA does not regulate workplace violence per se, its “General Duty Clause” requires employers to take “feasible means” to prevent against known threats of violence. The General Duty Clause requires employers to provide “employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.” The elements of a General Duty Clause violation are: (1) a hazard in the workplace; (2) the employer or the employer’s industry recognizes the hazard; (3) the hazard is likely to cause death or serious physical harm; and (4) there is a feasible means of eliminating or materially reducing the hazard.

In the context of workplace violence which might give rise to an OSHA citation, a key element is that the hazard must be known to the employer or the employer’s industry. Thus, OSHA citations for breaches of the General Duty Clause typically arise in healthcare — for example, in a psychiatric hospital where employees regularly face violent patients. In the construction realm, these citations are much less common. Nonetheless, a contractor could violate the General Duty Clause by ignoring or failing to recognize obvious threats or signs that an individual was going to commit an act of violence against other employees.

While the foregoing focuses on OSHA citations, a contractor could also face civil liability in a lawsuit by an injured employee against an employer. Furthermore, while the availability of workers’ compensation may bar many such lawsuits, contractors should not blindly rely on workers’ compensation insurance as a shield. If the contractor knew about an obvious threat and ignored it, an employee may be able to circumvent the usual bar and recover directly against the contractor.

Despite the lack of specific regulation beyond the General Duty Clause, OSHA has voluntary guidelines to prevent and mitigate workplace violence. The guidelines provide a helpful outline of a preventative program:

Identify and authorize individuals within the company to implement anti-violence programs.
Assess what positions or tasks are most likely to lead to violent incidents.
Create measures to control the risk.
Train employees to identify potential violence and handle violent incidents.
Evaluate the effectiveness of the company’s program.
Make sure that the hiring process thoroughly vets potential employee backgrounds.

Contractors should endeavor to prevent violence by employees and third parties just as any other employer. Most contractors have numerous projects occurring at the same time, and workers may face different threat levels based on the location of those projects. Thus, contractors should tailor preventive measures to reflect the location and nature of the projects. For example, if a project is in a neighborhood with a high crime rate, a contractor should devote more resources to safety training and dedicate on-site management to preventing and mitigating harm.

A critical element, and good starting point, is general awareness of potential harm in the first place. This starts with the hiring process and carries through to evaluating the general safety of workers on particular projects and raising awareness of threats on a daily basis.

The Financially Distressed Subcontractor on a Government Contract: What a Prime Contractor Should Do to Protect the Project and Itself

By Jay Bender on August 3, 2017 Posted in Bankruptcy/Creditor's Rights, Government Contracts

The Financially Distressed Subcontractor on a Government Contract: What a Prime Contractor Should Do to Protect the Project and Itself Some bankruptcy experts predict an increase in business failures for government contractors in the coming years. Increased demands and constraints on government spending will stress both prime contractors and subcontractors. As federal regulations generally place the burden of compliance on prime contractors, a financially distressed subcontractor is a concern not only for the sub, but also for the prime contractor.

A sub’s financial problems jeopardize the sub’s ability to perform its subcontract and, thus, pose serious threats to a prime contractor, including:

The prime’s inability to access promptly any equipment, parts, materials, inventories, or work in progress in the sub’s possession that is needed to complete the contract.
If the sub is in bankruptcy, the prime’s potential inability to terminate the subcontract, whether for default or for convenience, without first obtaining bankruptcy court approval.

Gaining Access to Equipment, Inventory and Other Property in Sub’s Possession

The Federal Acquisition Regulations (FAR) contain “title vesting” provisions, included in many government contracts, that provide for the making of advance payments, progress payments, performance-based payments, or the reimbursement of costs, to the prime or subcontractors. When a contract does include a title-vesting provision, the government will be deemed to hold full legal title to parts, materials, inventories, work in progress, tooling, test equipment, plans, drawings and other property that the prime or subcontractor has acquired or produced that are allocable or properly chargeable to the contract even though the contract is not yet fully performed.

Though title vesting provisions give the government ownership of property in a subcontractor’s possession, they do not guarantee that the government or the prime contractor will be able to get timely possession of that property from the under- or non-performing sub. Getting possession of that property can be complicated by a number of factors. Subs often refuse to turnover such property peacefully, hoping they will be able to stay on the job if they keep the property. A sub’s bank may have repossessed the property, or otherwise asserted that it has a lien on such property that takes priority over the government’s claims. If the sub is in bankruptcy, any efforts by the government or the prime contractor to take possession of property in the sub’s possession may be challenged as a violation of the automatic stay because the sub will argue it had at least a possessory interest in that property when it filed for bankruptcy. Any of these complications can delay obtaining possession of goods critical to the prime’s completion of the contract, exposing the prime to potentially significant losses.

For these reasons, prime contractors need to act quickly when one of their subs shows signs of financial distress. Primes should monitor their subs’ financial performance closely, especially the payment of their suppliers and sub-subs. Primes should include the full text of the applicable title-vesting regulation in subcontract forms, and not just cite to it, so that subs and the subs’ lenders have clear notice that the government will take title to the goods in the subs’ possession in accordance with those regulations. If the prime becomes concerned—based on solid indicators– that a sub will not be able to complete its subcontract obligations, the prime should consider alerting the government and work swiftly with the government to obtain a court order to get possession of the property and keep the job on track. Of course, such a drastic remedy may well tip the sub into insolvency and will certainly affect its ability to obtain any goods on credit thereafter. Should a sub file for bankruptcy, the prime should coordinate with the government to secure immediate relief from the automatic stay to get possession of the property.

Effect of a Sub’s Bankruptcy on the Prime’s Right to Terminate the Subcontract

Filing bankruptcy triggers an “automatic stay” of all collection actions against the sub and against any of the sub’s property. Action taken in violation of the stay is void and may result in sanctions against the party taking the action. A prime contractor is prohibited from terminating the right to proceed under a subcontract with a bankrupt sub unless the bankruptcy court “lifts” the automatic stay to allow such termination (whether the termination is for default or convenience).

Delaying the termination of the right to proceed under a subcontract can pose problems for the prime contractor, especially if the sub has ceased or slowed its performance of the contract (or clearly will not be able to complete the job) and the prime is eager to award the work to a takeover sub. The stakes are even greater when the underlying government contract pertains to national defense or other sensitive matters. Where time is of the essence to terminate a bankrupt sub’s right to proceed and bring in a replacement, the prime – in coordination with the government, if the government will cooperate – should file an emergency motion for relief from the automatic stay, asking the bankruptcy court for permission to terminate the sub’s right to proceed under the subcontract. A bankruptcy court may be reluctant to grant such relief early on in a bankruptcy case, especially if the prime seeks to terminate the right to proceed under the subcontract for default and does not have the right to terminate for convenience, or if termination of the right to proceed under the subcontract would be the proverbial final nail in the sub’s coffin. Again, however, if the subcontract implicates national security concerns, a bankruptcy court will be less likely to jeopardize national defense simply to give a bankrupt sub an extended opportunity to reorganize. If the bankruptcy court does not grant permission to terminate the right to proceed under the subcontract when requested and the bankrupt sub nevertheless fails to perform its obligations under the subcontract, the prime may need to bring in an additional sub to supplement the bankrupt sub’s work – though that decision should not be made without first obtaining advice from bankruptcy counsel.

Conclusion

A sub’s financial problems can push an otherwise profitable job into the red and destroy a government contractor’s reputation in the process. Prime contractors must monitor the financial affairs of subs and take prompt, deliberate action once a sub’s deteriorating condition becomes evident. While federal regulations often provide the government and its contractor with significant rights and remedies, a prime contractor must be ready to act decisively when necessary to protect its project and itself from being dragged under by a drowning sub. One step of course is to ask your lawyer to assist in evaluating an approach where the prime actually provides some monetary relief to the sub—perhaps based on change order that have been slow to process by the government. Another is to consider the effect of bankruptcy by the sub and proactive management of the developing situation. If you have any questions about how to manage a situation with a financially distressed sub on a government job, feel free to contact Jay Bender.

What Is “Fair Compensation” Following Termination for Convenience by the Government?

By Amandeep S. Kahlon on July 26, 2017 Posted in Contract Interpretation, Federal Contractors, Government Contracts

What Is “Fair Compensation” Following Termination for Convenience by the Government? The Armed Services Board of Contract Appeals (ASBCA) recently tackled a contractor’s claim for pre-construction costs following termination for convenience by the U.S. Army Corps of Engineers. In Pro-Built Construction Firm (June 1, 2017), the Board addressed a dispute arising out of a 2011 contract to construct a police station in Afghanistan. Eight months after executing the contract, but before issuing the notice to proceed (NTP), the Corps terminated the project over security concerns in the area. Pro-Built sought payment for $1.1 million in pre-construction services, which included subcontractor payments and standby costs for employees and workers for the entire eight-month period. The Corps rejected Pro-Built’s claim arguing, in-part, that it was unreasonable for the contractor to incur costs prior to the issuance of the NTP.

The ASBCA disagreed with the Corps of Engineers and awarded Pro-Built $338,708.47 in termination costs. The Board noted that the termination of the contract had the general effect of converting the contract into a cost-plus reimbursement agreement and entitled Pro-Built to reimbursement for all reasonable costs incurred. For the Board, the determination of what costs were reasonable and thus reimbursable was a fact-intensive inquiry.

In Pro-Built’s circumstances, construction work performed prior to the issuance of the NTP was not recoverable because the contract made clear such work would be performed at-risk. In contrast, standby labor costs and subcontractor costs incurred in preparation for the issuance of the NTP could be recoverable. The ASBCA was persuaded by testimony from Pro-Built’s expert and fact witnesses that market conditions in Afghanistan made it reasonable to staff up prior to issuance of the NTP and that the preparation costs were not related to construction services.

However, the ASBCA was troubled by some of Pro-Built’s cost accounting for certain employees and the claim for all eight months of costs prior to termination. The Board did not think it was reasonable for Pro-Built to incur standby and subcontractor costs for the full eight-month period when it initially anticipated issuance of the NTP one month after contract execution. The record also showed that several Pro-Built employees were shifted onto other projects a few months after execution when no NTP was forthcoming. As a result, the Board significantly reduced Pro-Built’s claim to allow only for recovery of three months of standby/preparation costs.

There are a few takeaways from the Board’s opinion. First, government contractors should be aware of their rights following a termination for convenience. Even prior to mobilization, there are significant costs incurred to develop and prepare for a project. If a project is terminated, a well-developed claim may include pre-mobilization costs. Second, government contractors should consider carefully how they present their claims for fair compensation when terminated for convenience. In the Pro-Built case, the Board expressed concern about the “all-or-nothing” approach taken by Pro-Built (which sought all eight months of costs) and the Corps (which denied all costs summarily) in presenting their competing arguments. This forced the Board to make the reasonableness determination on its own without guidance from the parties. Pro-Built and the Corps, for that matter, may have been better served by providing additional recovery alternatives to possibly adduce a more favorable opinion from the Board.

Highlights of the 2017 Revisions to the AIA-A101, A102, and A103

By Daniel M. Murdock on July 20, 2017 Posted in Construction Developments, Contract Interpretation

Highlights of the 2017 Revisions to the AIA-A101, A102, and A103 As discussed in a May blog article, the American Association of Architects (AIA) revise their form agreements between owner and contractor approximately every 10 years, and these form documents were recently revised by the AIA a couple of months ago.

This article focuses on comparing the changes from the 2007 version to the 2017 version of the following documents: AIA-A101 (standard form agreement between owner and contractor where the basis of payment is a stipulated sum); AIA-A102 (standard form agreement between owner and contractor where the basis of payment is the cost of the work plus a fee with a guaranteed maximum price); and AIA-A103 (standard form agreement between owner and contractor where the basis of payment is cost of the work plus a fee without a guaranteed maximum price). These documents (collectively referred to as the “Standard Form Agreement”) should be read in conjunction with the AIA-A201 (general conditions between owner and contractor). The May blog article provides an analysis of the 2017 revisions to the AIA-A201.

In its 2017 revisions, AIA makes many of the same changes across all three of the Standard Form Agreements. Also, similar to the changes to the AIA-A201, many of the changes to the Standard Form Agreements are minor clarifications and improvements or create new “check the box” features. Some of the substantive changes to the Standard Form Agreements are highlighted below:

As is the case with the AIA-A201, the most significant change to the Standard Form Agreements is the creation of the insurance and bonds exhibit. The 2007 Standard Form Agreements contained only a cross-reference to the insurance requirements in the AIA-A201. Under the 2017 version, much of the insurance and bonds information has been removed from the AIA-A201 and placed into an exhibit that is attached to the Standard Form Agreements. This change allows for greater flexibility and easier customization of the insurance requirements.
The Standard Form Agreements include a new method for calculating the amount that an owner must pay to a contractor for termination for convenience. Specifically, the parties are now prompted to agree upon a fee that the owner must pay to the contractor if it is terminated for the owner’s convenience. This termination fee is in addition to payments that the owner must make to the contractor for (i) work properly performed and (ii) costs incurred by reason of the termination, including costs attributable to termination of subcontracts.
The progress payment calculation has been simplified across the Standard Form Agreements and now includes, among other minor adjustments, a provision adding change directive amounts to the progress payment calculation and a provision subtracting amounts that the contractor does not intend to pay to subcontractors. The Standard Form Agreements also include a much more thorough procedure for withholding retainage.
The AIA-A102 and AIA-A103 are occasionally executed before the contract documents are finalized and the guaranteed maximum price or control estimate may contain certain assumptions. The AIA has added a paragraph to both form documents allowing for revisions to the contract documents that are consistent with the stated assumptions contained in the guaranteed maximum price or control estimate. The contractor is required to notify the owner and architect about any inconsistencies.
AIA-A103 now includes a section regarding procurement of long-lead items. This new section requires the contractor to prepare a list of long-lead items and allows the owner to procure such items on terms acceptable to the contractor. The contract for the long-lead items are later assigned to the contractor and the contractor must accept full responsibility for those contracts.
The AIA-A102 and AIA-A103 also include a new section forbidding the contractor from making advance payments to suppliers for materials that have not been delivered to the project site without the prior approval of the owner.

As indicated above, AIA made other minor revisions to the Standard Form Agreements, and the list above is not comprehensive of all revisions. Anyone attempting to use the 2017 form documents should carefully examine and compare the 2017 version with the 2007 form. If you have any other questions about the recent AIA revisions or drafting a contract for your particular project, please do not hesitate to contact us.

Bradley Partner Aron Beezley Named Top Attorney Under 40 by Law360

By David W. Owen on July 19, 2017 Posted in Government Contracts, Miscellaneous, Team Announcement

Bradley is pleased to announce that Washington, D.C. partner Aron Beezley was named by Law360 one of the Top Attorneys Under 40 in the country for the second year in a row. Law360’s annual list of Top Attorneys Under 40 recognizes the nation’s best attorneys under the age of 40 for their outstanding legal accomplishments. Law360 received more than 1,200 submissions for the 2017 list, and only 156 attorneys were selected. Aron was selected as a Top Attorney Under 40 in the area of Government Contracts Law.