Cambridge Massachusetts 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

San Francisco International Airport Reaches New Heights in Sustainable Project Delivery

November 21, 2022 — Aileen Cho - Engineering News-Record
Ten years ago, Geoff Neumayr decided he was tired of “doing design and construction by combat.” San Francisco International Airport had completed a master plan for the complex and the front of the airport facilities doing things the traditional way. Reprinted courtesy of Aileen Cho, Engineering News-Record Ms. Cho may be contacted at choa@enr.com Read the full story... Read the court decision
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Economic Loss Doctrine Bars Negligence Claim Against Building Company Owner, Individually

October 20, 2016 — Michael L. DeBona – The Subrogation Strategist
In Beaufort Builders, Inc. v. White Plains Church Ministries, Inc., 783 S.E.2d 35 (N.C. Ct. App. 2016), the Court of Appeals of North Carolina addressed whether the economic loss rule barred the negligence claim of White Plains Church Ministries, Inc. (White Plains) against Charles F. Cherry (Cherry), the owner of Beaufort Builders, Inc. (Beaufort Builders). The court held that, because the economic loss rule would bar White Plains’ negligence claims against Beaufort Builders, White Plains could not pursue a third-party negligence claim against Cherry, individually. Read the court decision
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Reprinted courtesy of Michael L. DeBona, White and Williams LLP
Mr. DeBona may be contacted at debonam@whiteandwilliams.com

Milhouse Engineering and Construction, Inc. Named 2022 A/E/C Building a Better World Award Winner

September 12, 2022 — Milhouse Engineering and Construction, Inc.
CHICAGO, IL, Sept. 07, 2022 (GLOBE NEWSWIRE) -- PSMJ has awarded Milhouse Engineering and Construction, Inc. (Milhouse) their 2022 Building a Better World award. This recognition is given to a firm in the Architecture, Engineering, and Construction industries that significantly and positively impacts the communities they serve. This highly regarded award is chosen by a panel of industry visionaries and leaders based on the impact and nature of the activities completed by the organization. "Firms nominated for an A/E/C Building a Better World Award come in all sizes, from less than 10 architects to over 10,000 civil engineers. What they share is a realization that giving time and resources to those less fortunate is the right thing to do. And more and more, the most sought-after candidates for open positions are judging firms on their level of corporate social responsibility," says Frank A. Stasiowski, FAIA, Founder and CEO of PSMJ Resources, Inc. In 2012, Milhouse established Milhouse Charities, the 501c3 non-profit arm of the Milhouse family of companies. Milhouse Charities supports the Milhouse vision "to be a positive impact" by supporting the education, exposure and advancement of underrepresented youth and minorities in science, technology, engineering and math (STEM). Since its founding in 2012, Milhouse Charities has invested over $1 Million and 7,000 hours of community service into STEM, resource, and mentorship programs. The organization has made a global impact having done service in Illinois, Indiana, Pennsylvania, New York, Atlanta, and throughout Africa. About Milhouse Engineering and Construction, Inc. Milhouse Engineering and Construction, Inc. is a full-service engineering firm offering expertise in civil, mechanical, electrical, structural and environmental engineering, as well as construction and program management. We deliver creative solutions to complex problems around the globe. Driven by our diverse perspectives, we challenge the status quo to pursue a brighter future for the communities we serve. Milhouse has been named a 'Best & Brightest Companies to Work For' for 17 years in a row and is ranked as an 'ENR Top 500 Design Firm'. Follow us on LinkedIn and Facebook. Read the court decision
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The Biggest Change to the Mechanics Lien Law Since 1963

December 08, 2016 — Wally Zimolong – Supplemental Conditions
The New Year will bring with it the biggest change to Pennsylvania’s Mechanics Lien Law since the current law was passed in 1963. These changes will impact owner, contractors, and subcontractors equally. However, the biggest benefits will probably be for real estate developers and other project owners. On December 31, 2016, Pennsylvania will go live with a website known as the State Construction Notices Directory. On that date, owners will have the option of making projects costing $1,500,000 or more “searchable projects.” An owner makes a project a searchable project by filing with the Notices Directory a “Notice of Commencement” before works begins. The Notice of Commencement must include the name, address, and email address of the contractor, full name and location of the searchable project, the county where the project is located, a legal description of the searchable property, and the name address, and email address of the searchable project owner. Importantly, the owner must also post a copy of this Notice of Commencement at the project site. Read the court decision
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Reprinted courtesy of Wally Zimolong, Zimolong LLC
Mr. Zimolong may be contacted at wally@zimolonglaw.com

Colorado Requires Builders to Accommodate High-Efficiency Devices in New Homes

December 14, 2020 — David M. McLain – Colorado Construction Litigation
Starting in 2009, the Colorado Legislature began adding requirements that builders offer certain options to accommodate high-efficiency devices. These requirements started with solar prewire options in 2009, then water-smart home options in 2010. In 2020, the Legislature added requirements for electric vehicle charging and heating systems. These sections apply to unoccupied homes serving as sales inventory or a model home or manufactured homes, as defined by Colorado law. While the Legislature has only required builders to include options to accommodate these devices, it may be just a matter of time until builders must install the prescribed devices themselves. In 2009, the Legislature passed C.R.S. 38-35.7-106, which was amended this year by HB 20-1155. As it now reads, Colorado law requires every builder of single-family detached residences to offer to have the home’s electrical or plumbing system, or both, include:

A residential photovoltaic solar generation system or a residential thermal system, or both;
Upgrades of wiring or plumbing, or both, planned by the builder to accommodate future installation of such systems; and
A chase or conduit, or both, constructed to allow ease of future installation of the necessary wiring or plumbing for such systems.

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Reprinted courtesy of David McLain, Higgins, Hopkins, McLain & Roswell
Mr. McLain may be contacted at mclain@hhmrlaw.com

Construction Defect Headaches Can Be Avoided

February 21, 2013 — CDJ STAFF
Construction defect claims can be an avoidable headache, if builders apply some forethought. Mark J. Peschel of Johnson & Lindberg, a Bloomington, Minnesota law firm, points out that simply says that windows should be weatherproofed by appropriate flashing, without any guidance on accomplishing that. He notes that “builders tend not to know the weatherproofing code provisions as well as they should.” Another lawyer, Eric S. Hayes of Brown and Carlson in St. Louis Park extends this, “it’s not just the building codes that need to be followed, but also the standards in the industry.” Hayes notes that another way builders can avoid headaches is by being proactive. “I often hear, once things have gone sour and moved toward litigation, that the homeowner contacted the contractor a dozen times about a leaking basement and nothing was done, so they were forced to sue.” His advice for builders: “Don’t let it fester.” Read the court decision
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Hurdles with Triggering a Subcontractor Performance Bond

April 05, 2017 — David Adelstein – Florida Construction Legal Updates
There have been a couple of decisions as of late, particularly in federal court, that have gone in favor of a performance bond surety and against a general contractor’s claim against a subcontractor’s performance bond. These decisions have been so unfavorable that they may be swaying certain internal decisions to move to subcontractor default insurance with, perhaps, subcontractors that pose less risk. From the general contractor’s perspective, if they have to stop the management of the job and progress to jump through hoops to trigger the performance bond’s obligations, rightfully or wrongfully, the bond may not provide them the value they need. Performance bonds are an appropriate product in many instances, but there should be more consistency regarding the actual trigger of a subcontractor’s performance bond obligations. Project teams need to absolutely understand what efforts they need to take, and how they need to take such efforts, in order to properly trigger a performance bond’s obligations. This is a must (and I have presented many seminars on this very issue). Or, the general contractor should move away from the traditional AIA /standard performance bond form, which is the direction I always go when I am involved in the drafting of a performance bond. 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

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