Fairfield Connecticut Building Expert Directory

Recovering For Inflation On Federal Contracts: Recent DOD Guidance On Economic Price Adjustment Clauses

October 24, 2022 — Amanda L. Marutzky - ConsensusDocs
Since October 2020, inflation in the United States has seen its fastest increase in more than 30 years. In the last year alone, inflation has remained as high as 8.6%. This hike has impacted everything from diesel to steel. In the construction industry, the higher prices of goods and services directly affect how contractors draft their construction contracts. The Department of Defense (DoD) has taken note of this dramatic price increase and recently issued guidance to its commanding officers and the procurement community. On May 5, 2022, DoD issued a memorandum titled “Guidance on Inflation and Economic Price Adjustments.” The stated purpose of the memo is “to assist COs to understand whether it is appropriate to recognize cost increases due to inflation under existing contracts as well as offer considerations for the proper use of EPA when entering into new contracts.” DoD’s memo responds to contractor and contracting officer concerns about the sudden and unexpected cost increases in labor and materials. Economic Price Adjustments, or EPAs, are adjustments to a stated contract price upon the occurrence of certain contingencies. FAR 16.203-1. They are of three general types – (1) adjustments based on established prices, (2) adjustments based on actual costs of labor or material, or (3) adjustments based on cost indexes of labor or material. Id. Because EPAs allow for adjustments in a contract price, EPA clauses allow a contractor to recover unanticipated increases in its project costs. For example, FAR 52.216-4, Economic Price Adjustment-Labor and Material, authorizes a contractor to recover for increases in the cost of material or labor. Such recovery is available when costs increase more than 3%, with a maximum recovery of 10% of the original contract price. See also FAR 52.216-2 through FAR 52.216-4. These EPA clauses provide contractors with relief and protection from issues such as dramatic inflation. EPA clauses, however, are not included in all contracts. Read the court decision
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Reprinted courtesy of Amanda L. Marutzky, Watt, Tieder, Hoffar, & Fitzgerald, LLP (ConsensusDocs)
Ms. Marutzky may be contacted at amarutzky@watttieder.com

How Retro-Commissioning Can Extend the Life of a Building—and the Planet

July 10, 2023 — Matthew Zweibruck - Construction Executive
Sustainability initiatives in the built environment need not be limited to new construction or other large expenditures. Aging facilities have the potential to extend their years of service while also combating greenhouse gas emissions. But what is the best course of action? From building design initiatives such as net zero and electrification to renewables and green building certifications, it can be a complicated and overwhelming field to navigate. Building owners and property managers may question if they are pursuing the correct programs to minimize their organization’s negative impacts on the environment. With all the initiatives, buzzwords and fancy awards surrounding these initiatives, there are energy-efficiency strategies available to buildings that cut through this noise—strategies that are cost effective, quick to implement, widely abundant and result in an immediate reduction in a building’s impact on climate change. Reprinted courtesy of Matthew Zweibruck, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Third Circuit Follows Pennsylvania Law - Damage Caused by Faulty Workmanship Does Not Arise from an Occurrence

May 10, 2013 — Tred Eyerly
The Third Circuit followed Pennsylvania law in determining that damage caused by faulty workmanship did not arise from an occurrence. Zurich Am. Ins. Co. v. R. M. Shoemaker Co., 2013 U.S. App. LEXIS 6093 (3d Cir. March 27, 2013). The County sued R. M. Shoemaker, alleging faulty construction of an addition to a correctional institution. The County alleged Shoemaker negligently supervised its subcontractor, thereby permitting the subcontractor to engage in willful misconduct, resulting in damage to structural elements of the correctional institution. The County alleged that Shoemaker's negligence permitted water to intrude, damaging the electrical systems, acoustic ceilings and miscellaneous equipment. Zurich sought a declaratory judgment that it was not required to defend or indemnify Shoemaker. The district court granted Zurich summary judgment. Relying on Pennsylvania law, the district court found that the allegations in the underlying action did not arise from an occurrence. Read the court decision
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Reprinted courtesy of Tred Eyerly
Mr. Eyerly can be contacted at te@hawaiilawyer.com

Near-Zero Carbon Cement Powers Sustainable 3D-Printed Homes

August 07, 2023 — Aarni Heiskanen - AEC Business
Eco Material Technologies and Hive 3D have unveiled the first 3D-printed homes using near-zero carbon cement as part of a housing project called The Casitas @ The Halles. The homes, ranging from 400 to 900 square feet, are constructed using Eco Material’s durable, longer-lasting cement called PozzoCEM Vite®. The cement replaces 100% of traditional Portland cement, has 92% lower emissions, and sets much faster. Hive 3D has developed a system to mix Eco Material’s cement replacement products with locally-sourced aggregates on-site, enabling cost-efficient and affordable construction. The collaboration aims to offer sustainable housing solutions and transition the construction industry away from high-carbon materials. Read the court decision
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Reprinted courtesy of Aarni Heiskanen, AEC Business
Mr. Heiskanen may be contacted at aec-business@aepartners.fi

A Court-Side Seat: Recent Legal Developments at Supreme and Federal Appeals Courts

December 18, 2022 — Anthony B. Cavender - Gravel2Gavel
This is a review of initial Supreme Court and Federal Appeals Courts oral arguments and other matters in October 2022. Oral Arguments at the Supreme Court Michael Sackett, et ux., v. Environmental Protection Agency The Supreme Court’s 2022 term began on October 3, 2022, with this important oral argument. For many years, the petitioner has encountered EPA opposition to the construction of a home on his property located near a lake in Idaho. The agency insists that the land is subject to federal regulatory jurisdiction, in that a Clean Water Act permit will be needed before work can proceed. Several courts have already weighed in on this issue; whether the land in question is considered a regulated “wetlands” pursuant to the “significant nexus” test developed by the Court in the Rapanos case decided in 2006. The oral argument was fairly long and spirited. The justices appear to believe that the “significant nexus” is unworkable because in many instances it provides little or no guidance to landowners as to whether their property may be subject to federal jurisdiction, and thus subject to civil and even criminal penalties. Justice Kavanaugh remarked that “this case is going to be important for wetlands throughout the country and we have to get it right.” Later, Justice Gorsuch lamented the fact that implementing a test for federal jurisdiction under the Clean Water Act test is so difficult to apply: “If the federal government doesn’t know [if a property is adjacent to navigable water and is regulated,] “does a reasonable landowner have any idea.” The issue is very difficult to resolve, and the Congress has indicated that is has no interest in entering this regulatory thicket. Read the court decision
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Reprinted courtesy of Anthony B. Cavender, Pillsbury
Mr. Cavender may be contacted at anthony.cavender@pillsburylaw.com

Exculpatory Provisions in Business Contracts

May 30, 2018 — David Adelstein - Florida Construction Legal Updates
An exculpatory provision in a contract is a provision that relieves one party from liability for damages. It shifts the risk of an issue entirely to the other party. Such a provision is generally drafted by the party preparing the contract that is looking to eliminate or disclaim liability associated with a particular risk, oftentimes a risk within their control. These provisions are also known as limitation of liability provisions because they do exactly that — limit liability as to a risk. For this reason, they can be useful provisions based on the context of certain risks, and are provisions that are included in business contracts (such as construction contracts). While such clauses are disfavored, they are enforceable if they are drafted clearly, unambiguously, and unequivocally. If they are unclear, ambiguous, or equivocal, they will construed against enforcement. See Obsessions In Time, Inc. v. Jewelry Exchange Venture, LLP, 43 Fla.L.Weekly D1033a (Fla. 3d DCA 2018) (finding exculpatory clause in lease ambiguous and, therefore, unenforceable as to lessor looking to benefit from the exculpatory clause). Read the court decision
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Reprinted courtesy of David Adelstein, Florida Construction Legal Updates
Mr. Adelstein may be contacted at dadelstein@gmail.com

Condo Owners Allege Construction Defects at Trump Towers

April 28, 2016 — Beverley BevenFlorez-CDJ STAFF
The Daily Business Review reported that three lawsuits have been filed against the developers of Trump Towers in Sunny Isles Beach, Florida alleging cracked pool decks, sloping roofs, water intrusion, among other construction defects. While Gary Mars, the attorney for the associations, did not have an estimate of repair costs, an engineer hired by the unit owners listed over 300 defects in two of the towers, according to the Daily Business Review. Attorney Peri Rose Huston-Miller of Derrevere Hawkes Black & Cozad, counsel for Steven Feller (a defendant), stated their client is "aware of the complaints that have been filed and is confident the parties will work together toward a resolution of the issues alleged.” Read the court decision
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Contractor Wins in Arbitration Only to Lose Before the Superior Court on Section 7031 Claim

June 19, 2023 — Garret Murai - California Construction Law Blog
If you’re a regularly reader of the California Construction Law Blog you’re aware of Business and Professions Code section 7031 which courts have variously described as “harsh[ ],” “draconian” and “unjust,” but, importantly, nevertheless valid. We haven’t seen many cases applying Section 7031 in an arbitration setting, however, until now. In Vascos Excavation Group LLC v. Gold, 87 Cal.App.5th 842 (2022), a contractor who prevailed on a payment claim in arbitration, had its victory snatched from its fingertips by the Superior Court which found that the arbitrator had exceeded her authority because the contractor was subject to Section 7031. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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