The Site Report - Construction Law Insights, Issue 11, November 2024

Jonathan Deasy, Stephanie Eaton, Matthew Georgitis, Steven Hemric, Clifford Kinney Jr., Brienne Marco, Julian Neiser
Spilman Thomas & Battle, PLLC
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Issue 11, 2024

Welcome to our 11th issue of 2024 for our construction industry insights e-newsletter - The Site Report. In this edition, we cover a wide variety of topics of interest for those in the construction industry—from a deep dive into a recent minority-owned construction company case and insight into the potential impact of tariffs on the industry, to how 3D printing and modular construction is changing construction. We also offer commentaries on North Carolina and its changing stance on unlicensed contractors and a shift in complying with headgear protection. Finally, the co-chair of Spilman’s “Battle Group,” Cliff Kinney, discusses key issues to evaluate BEFORE litigation. Enjoy reading and Happy Thanksgiving!

Thank you for reading!

 

Federally Funded Projects and Minority/Women-Owned Businesses – A Legal Lesson

By Matthew W. Georgitis

It may seem obvious that construction companies and federal agencies, such as the Department of Transportation, are to adhere to the federal regulatory statutes for federally funded construction projects, but you would be wrong in assuming that the rules are followed, particularly when it involves a minority or women-owned business. Let’s be upfront and honest. The construction industry is still predominantly male and non-minority dominated, with growing, but still smaller in terms of number, involvement from minority/women-owned companies. In an effort to increase the participation of minority/women-owned companies, the federal government enacted several statutes that require a certain percentage of subcontractors on federally funded projects to be minority/women-owned companies. Without the participation of those companies, a general contractor’s bid should not be accepted by the DOT…unless all bids fall below the threshold or the GC can demonstrate they made a good faith effort to find a minority/women-owned subcontractor but there were none to be found. This statutory backdrop sets the stage for the following matter that was successfully prosecuted by the team at Spilman after a long, hard-fought battle lasting eight years. 

Click here to read the entire article.

Tariff Concerns Loom Over Construction Input Prices 

“Potential trade policy changes under the incoming Trump administration could raise costs for a wide range of materials, economists say.”

Why this is important: Right now, construction input prices remain 0.2 percent lower than a year ago, and nonresidential construction input prices are down 0.5 percent in that period. However, potential trade policy changes under the incoming Trump administration present a new layer of unpredictability for contractors. New or increased tariffs have the potential to raise prices for a wide range of construction inputs, including items produced domestically that compete with imports. Construction industry professionals should therefore take notice that input prices may rise in the short term if purchasers rush to import materials prior to the implementation of those policies. --- Jonathan A. Deasy

3D Printing and Modular Construction - A New and Growing Avenue for the Construction Industry

By Stephanie U. Eaton

Just as many national, local and company-specific clean energy and sustainability goals are aiming for carbon reduction or carbon neutrality by certain future dates, such as the U.S. federal government’s target of at least 50 percent carbon reduction by 2030, the demand for electricity continues to grow. In fact, the construction industry’s use of electricity is predicted to grow 20 percent by 2030. How can contractors, designers, engineers, architects and building owners help reduce the industry’s carbon emissions and electricity demand at the same time?  

Click here to read the entire article.

NC Licensing Board Joins National Enforcement Effort, Targets Unlicensed Contractors

“Partnering with the National Association of State Contractors Licensing Agencies (NASCLA), the NCLBGC’s efforts included investigating complaints and coordinating with other state boards in response to Hurricane Helene’s impact in Western North Carolina.”

Why this is important: The NC Licensing Board for General Contractors’ recent push on enforcement against unlicensed contractors and violations of the general contractor laws and regulations is not isolated to the NCLBGC. Other boards within North Carolina and across the country have been ramping up enforcement efforts. For consumers who have been victims of unlicensed and/or unscrupulous contractors, this is great news, and the resources being made available to victims of the recent hurricanes by licensing boards are excellent tools to help avoid scams and know how to report illicit activity.

On the other side of the coin, due to unintentional and unwitting technical violations, many legitimate contractors are also finding themselves the subjects of board investigations. Often, these types of violations are avoidable with slight changes to the contractor’s business. Having the assistance of experienced legal counsel can be an invaluable resource to (1) proactively help your business avoid these unintended technical violations and (2) navigate the complaint and investigation process. --- Steven C. Hemric

Confusion, Lack of Clarity Over Head Gear Poses Safety Risks

“Employers, workers and safety officials aren’t often on the same page about appropriate head protection, a new study finds.”

Why this is important: According to the Bureau of Labor Statistics, U.S. workers suffered a reported 155,830 head injuries on the job between 2021 and 2022. As a result of this troubling statistic, Wisconsin-based business safety consultant firm J.J. Keller & Associates Inc. and the International Safety Equipment Association (ISEA) conducted a study that revealed significant confusion and over-simplification in the differences (and similarities) between hardhats and helmets amongst safety professionals. This disconnect often arises from variations in the strictness of employers’ PPE programs, inconsistencies between state and federal OSHA standards, and differing PPE requirements among owners, contractors and subcontractors. The ISEA therefore recommends that safety professionals engage in an ongoing dialogue to provide managers with clarity, guidance and education to address the evolving landscape of head protection. Such ongoing dialogue will lead to better comfort and fit for those wearing the head protection that will ultimately increase the likelihood that workers will wear head protection and wear the right type. --- Jonathan A. Deasy

The Corporate Transparency Act: Deadline Approaching

By Brienne T. Marco

Before we know it, 2024 will be coming to a close. As we approach the end of the year, we want to remind you of an important upcoming deadline under the Corporate Transparency Act. Companies formed before January 1, 2024 must file their initial beneficial owner report no later than December 31, 2024.

Click here to read the entire article.

Ask the Attorney

Clifford F. Kinney Jr. is a Member in our Charleston office. His primary areas of practice are construction litigation, toxic torts, chemical exposure (including benzene, C-8, carbon black and perchloroethylene), class actions, mass torts, general litigation and alternative dispute resolution.

Q: As Co-Chair of our litigation strike force, The Battle Group, you are well versed in handling litigation that brought the media spotlight as well as a likely trial in the future. As a former American Arbitration Association neutral, you have seen your fair share of cases and understand the nature of litigation. But, what are the major issues for a lawyer or party to address before even getting into the merits of a case? 

A: Obviously, understanding the facts of a case is critical. But, there are several issues that should be addressed early in the defense or prosecution of a claim.

  1. What governs the conduct of the parties, and who are they? There is typically a written agreement between the parties who have already had some adversarial interaction. As a practical matter, the practitioner or client needs to get a copy of the agreement and all relevant subparts. This is sometimes easier said than done, but it is critical, because you’ve got to read the contract. Next, the identity of the parties and their relationship must be addressed. Who is the attorney’s client, who are the relevant parties to the contract and dispute?
  2. Where will this be contested? Is there an arbitration clause that applies? (read the contract) Is early mediation required? (read the contract) Is there a choice of venue provision? (read the contract). Is there a choice of law provision? (read the contract). Are there time limitations to bring claims (mechanic’s and materialmen’s liens)? Are certain claims prohibited or restricted? (read the contract).
  3. Who will pay? Does anyone have insurance (that you know about at this stage)? Is anyone an additional insured on someone else’s policy? Is there a bond? Is there indemnification? (read the contract) Is there fee shifting? (read the contract). Are there requirements for providing notice of claims? (read the contract)

If you have a handle on these three items, a well-versed attorney can help guide you through the litigation portion of the issue. It’s also important that you have an attorney who understands how to litigate, but also understands construction-related issues. Construction cases can have a myriad of issues that are very unique and having someone in your corner who readily knows those issues will be essential.

 

 

 

 

 

 

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

© Spilman Thomas & Battle, PLLC

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