Monthly Archives: October 2013

October 30, 2013 · 9:30 AM

Wednesday Word to the Wise: Verify Your Performance & Payment Bonds

Yesterday my Twitter feed delivered a pair of tweets about a rash of fraudulent contract surety bonds in Tennessee:

https://twitter.com/matthewdevries/status/395264837514969088

The owner/obligee got “lucky” in the case of the Regency Hotel demolition project at the Memphis International Airport, in that it discovered the fraud before contract award; that at least provided an opportunity to rebid the contract and award it to a properly bonded prime contract.  Goes without saying that the discovery of a forged or otherwise fraudulent bond during contract performance can be a much messier proposition.

What can owners/obligees do to protect themselves?  Verify your bonds.  How?  I suggest utilizing the resources furnished by the Surety & Fidelity Association of America (@SuretyFidelity) on its “Verify Your Bond” webpage. There you will find information needed to locate a particular bonding company and inquire about the authenticity of a specific bond.  You’ll also find a current list of surety companies participating in the Association’s Bond Authentication Program.

Stay vigilant, owners/obligees.

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Filed under Payment Bonds, Performance Bonds, Surety Law

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October 29, 2013 · 1:00 PM

Top 10 Things to Know About North Carolina’s New Design-Build/Public-Private Partnership Law

This past summer, the N.C. General Assembly passed and Governor McCrory signed into law groundbreaking legislation authorizing the use of design-build, design-build bridging and public-private partnerships in the delivery and financing of public construction projects in the state.  The legislation is sure to alter North Carolina’s public procurement landscape drastically and influence the complexion of the state’s construction industry, particularly at the design and prime contractor levels.

DBP3Last Wednesday, October 23, I attended an excellent panel discussion covering key aspects of House Bill 857 (“HB 857”) sponsored by Carolinas AGC Foundation, AIA North Carolina (@AIA_NC), the Professional Engineers of NC (@ProfEngNC), United Minority Contractors of North Carolina and the American Council of Engineering Companies of North Carolina.  Based on that discussion and my own review and analysis of the legislation, here are my top ten observations:

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Filed under Feature story, Local law, policy & news, Payment Bonds, Project Delivery Systems, Public Bidding, State law, policy & news

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October 25, 2013 · 2:00 PM

Construction Tweets of the Week for the Week Ending Friday, October 25, 2013

1.  Scott Wolfe of Zlien.com tweeted about the pros and cons of filing a claim of lien on real property in advance of a construction mediation.  The linked blog post notes that while a claim of lien might enhance the claimant’s negotiation leverage, it might simultaneously generate adversarial tension up the chain, which in turn could make a mediated resolution more difficult to achieve.

It’s an interesting strategic question, particularly now that N.C. Gen. Stat. § 44A-23(d) expressly gives subs and suppliers the option to file their lien claims within 120 days of the prime contractor’s date of last furnishing, as opposed to their own date of last furnishing.  More than ever, timing is everything.    Continue reading →

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Filed under Construction Risk Management, Delay Claims, Federal law, policy & news, Federal Procurement, Lien Law, State law, policy & news, Subcontractors

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October 22, 2013 · 9:52 AM

Mediator/Arbitrator Hybrids: The Next Big Thing in Construction Dispute Resolution?

One of the oft-cited advantages of arbitration is that it is simpler, cheaper and faster than litigation.  Recent figures from the American Arbitration Association (“AAA”) suggest that while a commercial case may take up to two years to run its course through the judicial system, commercial cases can be resolved via arbitration between six months and a year.

Still not fast enough for you?  Then perhaps you might be interested in the following fast-track alternative dispute resolution procedure:

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Filed under Arbitration, Federal case law, Mediation

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October 15, 2013 · 9:45 AM

Construction Tweets of the Week for the Week Ending October 12, 2013

1.  Now that North Carolina lawmakers have embraced public-private partnerships as a project delivery option for public works, what size projects might we see developed via P3?  Well, if the $4.8 billion (yes, that’s billion, with a “b”) expansion of I-35E in Texas is any indication, the sky’s the limit.  Here’s AGC SmartBrief editor Jennifer Hicks’ tweet about the big news from the Lone Star State:

https://twitter.com/SB_AEC/status/387212261800288256

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Filed under Bid Protests, Federal case law, Federal law, policy & news, Federal Procurement, Highway Contracts, Project Delivery Systems

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October 7, 2013 · 9:00 AM

Construction Tweets of the Week

Alright, faithful readers, it’s time to launch a new feature here at N.C. Construction Law, Policy & News, a little something I’m christening the “Construction Tweets of the Week.”

The construction industry at all levels — local, state and national — enjoys an increasingly vibrant presence on Twitter.  I aim to showcase some of the voices that left an impression on me in the preceding week, as well as to facilitate ongoing discussion, whether in the Comments section of this blog and/or in the Twitterverse beyond.

You’ll note the tweets embedded here are fully interactive, with hotlinks to each Tweep’s profile, linked content and “Follow” button.  The reply, retweet and “favorite” functions are also fully operational.  Click early, click often, and become a part of the Construction Twitterati.

Without further ado, here are the Construction Tweets of the Week for the week ending Saturday, October 5, 2013:

1.  Dave Simpson of CarolinasAGC blasted out this tweet about six not-to-be-missed, CAGC-sponsored seminars concerning the North Carolina Legislature’s recent adoption of the design-build and public-private partnership (“P3”) project delivery systems for public projects in North Carolina:

https://twitter.com/CAGCNCBldgDiv/status/385043039095238657

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Filed under Mediation, Project Delivery Systems, Surety Law

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October 3, 2013 · 8:58 AM

Who Benefits from Subcontractor Default Insurance? Not Project Owners.

The good folks at Bricker & Eckler, an Ohio law firm, recently blogged about a New York appellate decision concering subcontract default insurance (“SDI”), often referred to as “SubGuard” based on a Zurich SDI product of the same name.  The case involves a private owner who alleged it was misled by its construction manager (presumably at-risk) into believing that the SDI policy the CM had procured from the project’s largest subcontractor provided coverage to the owner in the event of that sub’s default.  Turns out the policy only named the CM, but not the owner, as an insured, and when the owner discovered it had no coverage after the sub’s default, it sued the CM for fraud, among other claims.

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Filed under Construction Risk Management, Performance Bonds, Subcontractors

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