Home Construction Thriving in Lubbock
December 30, 2013 —
CDJ STAFFThe 2013 numbers for home construction aren’t ready yet, but the January through November numbers for Lubbock, Texas show a 42% increase over the number of construction permits issued for single-family homes in the first 11 months of 2012. The number look even better compared to 2011’s totals, according to KFYO.
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One More Thing Moving From California to Texas: Wildfire Risk
June 19, 2023 —
Patrick Sisson - BloombergIn early January, Keith Elwell was doing one of the things he does best, swinging chainsaws to help save forests from wildfire. Amid groves of junipers and white oak trees, Elwell led a team of a half-dozen volunteers, clearing brush and dead limbs in Twin Springs Preserve in Williamson County, Texas, a 170-acre county preserve a 40-minute drive north of downtown Austin.
Set on the northeastern edge of Hill Country, a rolling, rocky landscape of natural springs and wild grasses, it’s also adjacent to Georgetown, the fastest-growing city in the United States according to US Census Bureau data. Once a small farming town, it’s now an Austin suburb of more than 75,000 people with 60 subdivisions under construction.
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Patrick Sisson, Bloomberg
Biden’s Buy American Policy & What it Means for Contractors
February 22, 2021 —
Meredith Thielbahr & Nicole Lentini - Gordon & Rees Construction Law BlogJanuary 25, 2021, President Biden signed an Executive Order (EO) “Ensuring the Future is Made in All America by All of America’s Workers”, which seeks to bolster U.S. manufacturing through the federal procurement process. Note that, just six day earlier, on January 18, the Federal Acquisition Regulation (FAR) Counsel issued a final rule implementing former President Trump’s July 2019 EO, titled “Maximizing Use of American-Made Goods, Products, and Materials” (EO No. 13881) on the then-current Buy American standards. For context, Trump’s proposed revisions – adopted and implemented by the FAR Council earlier this year – imposed three (3) significant changes worth noting: (1) increasing the percentage of domestic content (other than iron or steel) from 50% to 55% that an end product must contain in order to qualify as a “domestic end product”; (2) implementing an even higher increase in the domestic content requirement for iron and steel products to at least 95% U.S. “predominately” iron or steel product; and (3) increasing the price evaluation preference for domestic offerors from 6% to 20% (for other than small business) and 30% (for small businesses). The FAR’s rule became effective January 21, 2021, and applies to solicitations issued on or after February 22, 2021, and resulting contracts let. Biden’s EO rescinds Trump’s EO No. 13881 “to the extent inconsistent with [Biden’s] EO.” However, when dissected, it is clear Biden’s Buy American plan does little to modify thresholds inconsistent with the Trump Administration; rather, the White House’s latest EO implements changes in the form of BA administration. Nonetheless, Biden’s EO does expressly note that it supersedes and replaces Trump’s EO on the same issues.
Reprinted courtesy of
Meredith Thielbahr, Gordon & Rees and
Nicole Lentini, Gordon & Rees
Ms. Thielbahr may be contacted at mthielbahr@grsm.com
Ms. Lentini may be contacted at nlentini@grsm.com
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Texas Legislature Puts a Spear in Doctrine Making Contractor Warrantor of Owner Furnished Plans and Specifications
May 31, 2021 —
Paulo Flores, Timothy D. Matheny & Jackson Mabry - Peckar & Abramson, P.C.The Texas Legislature has just sent Senate Bill 219 (“S.B. 219”) to the Governor for signature; if this legislation is signed by the Governor, it will further erode the Texas legal doctrine that makes the contractor the warrantor of owner-furnished plans and specifications unless the prime contract specifically places this burden on the owner.
Background
49 states follow what is known as the Spearin doctrine (named after the U.S. Supreme Court case of United States v. Spearin) in which owners warrant the accuracy and sufficiency of owner-furnished plans and specifications. Texas, on the other hand, follows the Texas Supreme Court created Lonergan doctrine, which has been an unfortunate presence in Texas construction law since 1907. In its “purest form,” as stated by the Texas Supreme Court, the Lonergan doctrine prevents a contractor from successfully asserting a claim for “breach of contract based on defective plans and specifications” unless the contract contains language that “shows an intent to shift the burden of risk to the owner.” Essentially, this then translates into the contractor warranting the sufficiency and accuracy of owner-furnished plans and specifications, unless the contract between them expressly places this burden on the owner. Over the years some Texas courts of appeal had ameliorated this harsh doctrine, but in 2012, the Texas Supreme Court indicated Lonergan was still the law in Texas, in the case of El Paso v. Mastec. In 2019, the Texas Legislature took the first step toward hopefully abrogating the Lonergan doctrine by implementing a new Chapter 473 to the Texas Transportation Code with respect to certain projects undertaken by the Texas Department of Transportation, and Texas political subdivisions acting under the authority of Chapters 284, 366, 370 or 431 of the Transportation Code, adopting, as it were, the Spearin Doctrine in these limited, transportation projects. Now, the legislature has further chipped away at the Lonergan doctrine with the passage of S.B. 219.
Reprinted courtesy of
Paulo Flores, Peckar & Abramson, P.C.,
Timothy D. Matheny, Peckar & Abramson, P.C. and
Jackson Mabry, Peckar & Abramson, P.C.
Mr. Flores may be contacted at PFlores@Pecklaw.com
Mr. Matheny may be contacted at tmatheny@pecklaw.com
Mr. Mabry may be contacted at jmabry@pecklaw.com
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Managing Once-in-a-Generation Construction Problems – Part II
April 03, 2023 —
Jeffrey S. Wertman - Construction ExecutivePart I of this series discussed the benefits of construction participants using alternative project delivery methods and properly addressing change order issues, rising costs and payment structure issues to manage construction during these uncertain times. Part II below explores the possibility that higher prices and steady consumer demand could lead to an increase in unscrupulous contractor practices—and how owners can mitigate that risk, managing the challenges posed by the unforeseen labor shortage and turnover in the industry and evolving your construction team for short-term and long-term success.
Higher Prices and Steady Demand
With the demand for construction projects relatively stable, contractors remaining in high demand and a surge in prices for construction materials and components, owners are under great pressure to accept less favorable construction terms. This has presented unscrupulous contractors with perceived leverage over owners and new opportunities to engage in questionable business practices and fraud. Although some contractors may seek to stretch the boundaries of a construction contract, other contractors are more deliberate. Falsifying payment applications and invoices to inflate labor or materials costs, billing for work not yet performed or materials not yet delivered to the project site and manipulating change orders are examples of illicit and fraudulent practices by contractors.
Reprinted courtesy of
Jeffrey S. Wertman, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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City Drops Impact Fees to Encourage Commercial Development
November 08, 2013 —
CDJ STAFFThe Orvido, Florida city council wants to encourage commercial development, and they’re willing to do it by discouraging residential development. The impact fees for commercial buildings have dropped sharply, the Orlando Sentinel notes that for a 50,000 square-foot office building, the city is reducing the impact fee from $2,890 to $1,575, a drop of $1,313, nearly half.
Meanwhile, the impact fee for single-family homes has seen an increase of seven percent, going from $3,195 to $3.433. The city is clear about its reasons. “We’re very heavy on the residential side. We want to have more high-paying jobs come into the city,” said Keith Britton, a member of the council.
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Settlement Reached in Bridge Failure Lawsuit
December 11, 2013 —
CDJ STAFFOfficials claimed the failure of a bridge in Afton Township, Illinois was because trucks owned by Welded Construction used the bridge despite exceeding the bridge’s weight limit of 36.5 tons. The firm argued that they should be responsible for the depreciated cost of the bridge, not its replacement cost. Welded Construction had been using the bridge to get to the site of an oil pipeline construction project for Enbridge Energy.
Replacement of the bridge was initially estimated at $933,000, but that was in advance of any design work. Enbridge Energy settled the case at $900,000, which should cover most or all of the cost of repair or replacement. Some federal funds may also be available for repairing or constructing a new bridge.
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“Rip and Tear” Damage Remains Covered Under CGL Policy as “Accident”—for Now.
September 01, 2016 —
Michael Lindsay & Luke Mecklenburg – Snell & Wilmer Real Estate Litigation BlogThe Colorado Supreme Court has approved a settlement between the parties to an appeal of the 2012 Colorado Pool Systems v. Scottsdale Insurance Company Court of Appeals case, leaving that ruling intact. The ruling parses a fine line between uncovered costs of repairing defective work and covered costs of damage caused to nondefective work while repairing defective work. This nuanced opinion, which is now established Colorado law, is worth a second look.
In Colorado Pool Systems, Inc. v. Scottsdale Insurance Company, the Colorado Court of Appeals determined that so-called “rip and tear” damage caused by a construction professional to nondefective work while correcting defective work is covered as an “accident” under standard Commercial General Liability insurance language. 317 P.3d 1262 (Colo. App. 2012). A pool company excavated and built a rebar frame in order to construct a pool, but it hired a subcontractor to pour the concrete. An inspector later noticed that some of the rebar was too close to the surface, and the pool company agreed to demolish and replace the pool after an agent of its insurer represented that this loss would be covered. But the agent was wrong, the insurer denied coverage, and litigation ensued.
Reprinted courtesy of
Michael Lindsay, Snell & Wilmer and
Luke Mecklenburg, Snell & Wilmer
Mr. Lindsay may be contacted at mlindsay@swlaw.com
Mr. Mecklenburg may be contacted at lmecklenburg@swlaw.com
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