In an industry of seemingly ever-tighter margins across the board, it is perhaps unsurprising that the construction industry has fought to continue through the current coronavirus crisis as much as it has. However, many in the industry have stopped work and shut down sites and, despite the current and perhaps somewhat over-optimistic view from the government that work can continue whilst still complying with social distancing rules, it seems inevitable that all non-essential work will stop very soon. Continue reading “Coronavirus and Construction in the UK: The Time to Talk Is Now”
U.S. Army Corps of Engineers to Award Contracts to Convert Existing Buildings into ICU-like COVID-19 Treatment Facilities, Starting in New York
During a press conference on March 20, 2020, the U.S. Army Corps of Engineers (USACE) discussed plans to assist state-level COVID-19 relief efforts. USACE support will include the conversion of existing, underutilized buildings such as hotels, college dormitories and potentially large spaces into ICU-like treatment facilities.
To read the full text of this Duane Morris Alert, please visit the firm website.
Coronavirus and Construction Contracts
As of March 17, Boston halted all construction jobs in the city for two weeks due to the COVID-19 pandemic. This decision has affected approximately 21.4 million square feet of new or renovated development across 97 projects. Other municipalities have implemented travel restrictions and shelter-in-place orders requiring individuals to stay at home except as necessary to provide certain essential business and government services. These domestic actions, coupled with tighter border controls and quarantines at the international level, will inevitably result in supply chain disruption and labor force shortages.
As COVID-19 continues to spread throughout the country, it will impact project performance. There are some important contract considerations that parties should keep in mind as they evaluate their response to project delays and closures, safety concerns, and vendor and workforce unavailability.
To read the full text of this Duane Morris Alert, please visit the firm website.
New York City’s Sustainable Roof Laws Likely to Increase Construction Costs
As of November 15, 2019, building owners in New York City are required to install “sustainable roofing zones” on all newly constructed buildings, expansions of existing roofs and roof replacements. The new laws were passed by the New York City Council on April 18, 2019, and became law on May 20, 2019. These new ordinances, known as Local Laws 92 and 94 of 2019, passed as part of a broad package of laws known as the New York City Climate Mobilization Act, whose goal is reduction of building carbon emissions. Because the sustainable roof requirements are effective now, plans submitted to the Department of Buildings for approval must include plans for sustainable roofs.
NY Governor Vetoes Bill To Allow Delay Damages On Public Contracts
New York Governor Andrew Cuomo ended 2018 by vetoing New York Senate Bill 6686 to amend the state finance law by adding a new section 138-b to allow contractors working on public construction projects seek delay damages against government agencies. The vetoed bill would have required all public contracts to contain a clause allowing a contractor, subcontractor or supplier to make a claim for costs due to excusable delays resulting from actions or omissions by a public owner or any of its representatives. The bipartisan bill sponsored by Senators Michael Ranzenhofer (Republican) and Luis Sepulveda (Democrat) passed the Assembly by a vote of 103 to 40 and the Senate 59 to 0. The text of the bill can be seen here.
Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Duane Morris Cuba Business Group. Mr. Aquino focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.
Major Milestone Reached in Phase II of New York City’s Second Avenue Subway Project
The Metropolitan Transit Authority (MTA) announced that the Federal Transit Administration issued a “Finding of No Significant Impact” (FONSI) for Phase II of New York City’s Second Avenue Subway Project. The FONSI was issued after an extensive update of the original Environmental Impact Statement that was prepared in 2004. The new findings mean changes to the design of the project since 2004 were found to have no additional adverse impact on the environment in the construction area.
Congresswoman Carolyn B. Maloney said: “This finding is a major step forward toward making Phase 2 of the Second Avenue Subway a reality,” “Phase 2 will make it much easier to commute to and from East Harlem, and to access Metro North and the LaGuardia bus at 125th Street. We have already seen the extraordinary success of Phase 1, and the MTA must move forward as quickly as possible to build the full-length Second Avenue Subway up to 125th Street and then down to lower Manhattan.”
Phase I of the Second Avenue Subway opened for service January 1, 2017. Phase II is now underway with engineering and environmental reviews. Phase II will extend the subway line to 125th Street with stops at 106th, 116th, and 125th. When completed, the Second Avenue Subway Line will extend 8.5 miles from 125th Street in Harlem to Hanover Square in Lower Manhattan, including 16 new ADA-accessible subway stations.
Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Duane Morris Cuba Business Group. Mr. Aquino focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.
Is Your Business Prepared for New Tariffs on Aluminum and Steel Effective March 23?
On March 15, 2018, Presidential Proclamations 9704 (aluminum) and 9705 (steel) were published in the Federal Register Vol. 83. No. 51, at pages 11,619, etc., and pages 11,625, etc., respectively. As many are aware from continued coverage in the press, these proclamations are predicated upon national security concerns of the United States and the reports by the secretary of commerce under section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862). Mexico and Canada are excluded from the assessments for now in consideration of ongoing negotiations relating to the North American Free Trade Agreement (NAFTA).
A 10 percent ad valorem duty has been set for aluminum articles as defined in the proclamation relating to that category of product and a 25 percent ad valorem duty has been set for steel articles as defined in the second of these proclamations.
The effective date for the application of these duty rates is midnight Eastern time on March 23, 2018, with respect to goods entered into or withdrawn from warehouses for consumption on or after that date and time. These rates are in addition to any other duties, fees, exactions and charges applicable to such imported products. Such additional charges may include items such as harbor maintenance fees, merchandise processing fees and taxes, as appropriate.
New York Governor Vetoes Public Contract Notice Bill Requiring Prejudice Before Forfeiture
One of our previous alerts provided notice of a bill passed by the New York State legislature requiring any contract awarded for public work include a provision that the contractor’s failure to give a notice within 180 days of the time prescribed in the contract would not invalidate any claim unless the public entity could demonstrate that it was materially prejudiced by the failure to provide notice. The new year, however, brought news from Albany when it was learned that the Governor, Andrew Cuomo, vetoed the bill with a message that included the following justification:
Appropriate notice provisions in public works contracts permit public owners to manage projects more efficiently. They also ensure that information is promptly provided to stakeholders if necessary to evaluate a change order or to resolve a problem on a project.
The Governor further commented that such a bill would fundamentally change well-established law and eliminate a public owner’s ability to mitigate project delays, adhere to plan work schedules and – quoting here – “would require public owners to accept and pay for work that was unnecessary and otherwise unauthorized.” Throwing more gas on the fire, the memo in support of the veto further stated that, “[m]oreover, litigating whether a public owner has been materially prejudiced will undoubtedly lead to increased claims and costs. For these reasons, I am therefore constrained to veto this bill.”
The Governor, evidently in an attempt to placate the trade groups and other organizations in support of the bill as well as the majority of the legislature, suggested that the Council of Contracting Agencies conduct a review of the notice and “forfeiture” – his words – provisions and to issue a report with their proposed recommendations in September of this year. The committee purpose apparently is an attempt to create uniform notice provisions throughout the state public contracts. However, it does not appear that uniformity in notice provisions was the prime driver of the proposed bill but, rather, their forfeiture aspects.
New York Governor Issues Executive Order to Close Wage Gap In State Contracts
On January 9, 2017, New York Governor Andrew Cuomo signed Executive Order 162 requiring state agencies and authorities to include a provision in state contracts “requiring contractors to agree to include detailed workforce utilization reports, in addition to the equal employment opportunity information” that is currently required to be included in such reports. The new reports must contain the job title, salary and other data, including the gender, race, and ethnicity of each employee working on the state contract. If the contractor cannot identify the particular workers on the state contract, the report must then contain the job titles and salary data “of each employee in the contractor’s entire workforce.”
Executive Order 162 applies to “all State contracts, agreements, and procurements issued and executed on or after June 1, 2017.” The new reporting requirement applies to both contractors and subcontractors. Contractors and subcontractors will be required to report the information on a quarterly basis for all prime contracts with a value in excess of $25,000. Contractors with contracts of more than $100,000 must report monthly.
The New York State Department of Economic Development will set forth procedure in which the information will be reported. The New York State Department of Labor will analyze the data and make recommendations to eliminate any detected wage disparity.
Upon signing the Order Governor Cuomo stated: “At these stormy times of instability and confusion, New York must serve as a safe harbor for the progressive principles and social justice that made America.”
Executive Order 162 can be found here.
Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Duane Morris Cuba Business Group. Mr. Aquino focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.
New York Construction Industry Welcomes New Agreement On Extension Of 421-A Tax Abatement Program
Almost a year after it expired, the Building and Construction Trades Council and the Real Estate Board of New York (REBNY) reached an agreement to restore the 421-a tax exemption program. The New York State legislature still has to approve the agreement.
The new agreement will require developers to pay construction workers an average hourly wage of $60 (including wages and benefits) for projects in Manhattan with over 300 units south of 96th Street. In Brooklyn and Queens, the average hourly rate for workers, including wages and benefits, will be $45, and the wage and benefit obligations will apply to buildings located in Community Boards 1 and 2 within one mile of the nearest waterfront bulkhead. Projects with 50 percent or more affordable apartments are excluded from the wage and benefits requirement.
The agreement will also extend the maximum time developers will pay zero in property tax with the 421-a program from 21 years to 35 years. In exchange, affordable apartments with rent limitations must remain that way an additional 5 years to 40 years.
To assure compliance with the wage and benefits obligation of the program, developers will have to hire independent monitors to audit certified payrolls. The independent monitors will certify to the New York City Department of Housing Preservation and Development within 120 days of the receipt of the final Certificate of Occupancy that the compulsory wages and benefits have been paid.
Under the new agreement, developers may opt out of the 421-a wage and benefits requirement by entering into a Project Labor Agreement (PLA). If a developer chooses to enter into a PLA, the developer can still take advantage of all other elements of the 421-a program.
“The deal reached today between these parties provides more affordability for tenants and fairer wages for workers than under the original proposal. While I would prefer even more affordability in the 421-a program, this agreement marks a major step forward for New Yorkers,” Governor Andrew Cuomo said in a statement.
Rob Speyer, chair of REBNY, said: “We are pleased to have reached an agreement that will permit the production of new rental housing in New York City, including a substantial share of affordable units, while also ensuring good wages for construction workers.”
Jose A. Aquino (@JoseAquinoEsq on Twitter) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group and of the Duane Morris Cuba Business Group. Mr. Aquino focuses his practice on commercial litigation with a concentration in construction law, mechanics’ lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author’s law firm or its individual attorneys.