Most subcontracts include a flow through provision (also called flow down and incorporation clauses) stating that the subcontractor and contractor are bound by the same obligations as set forth in the prime contract between the contractor and owner. Many jurisdictions interpret such provisions narrowly, as illustrated in a recent case out of New York. In
Architects Should Not Make Initial Decisions on Construction Disputes
A common provision often deleted from the standard form AIA documents is the provision in the AIA A201 General Conditions requiring an Initial Decision Maker (IDM) for claims between the contractor and owner. In the A201, the contracting parties have the option of naming their own IDM for the project. If an IDM is not
Another Law Will Increase Construction Costs in New York
New York recently enacted legislation known as Carlos’ Law, which increases penalties for corporate liability for the death of, or serious injury to, an employee. The bill, S.621B / A.4947B, was named after Carlos Moncayo, a construction worker killed in a trench collapse on a New York City construction project. Moncayo’s employer repeatedly flouted safety
Connecticut Court Clarifies a Limit on Payment Bond Claims for Public Projects
In All Seasons Landscaping, Inc. v. Travelers Casualty & Surety Co., No. DBD-CV21-6039074-S, 2022 WL 1135703 (Conn. Super. Ct. April 4, 2022) the plaintiff, a subcontractor on a state project, commenced a lawsuit against the surety who issued a payment bond on the project two years after the subcontractor last performed any original contract work
Agree First or it May Cost You Later
Business relationships often begin before parties execute a written agreement containing the terms and conditions by which the relationship will be governed. With little more than a Letter of Intent (“LOI”) or Letter of Award (“LOA”) one party is typically pressured to begin investing time and money to start preliminary work on a project. If
More Funding Brings More Bureaucracy to Federal Projects
On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA) (Public Law 117-58). The IIJA includes the Build America, Buy America Act which declares that “none of the funds made available for a federal financial assistance program for infrastructure may be obligated for a project unless all of the
A Prevailing Party Provision Should Define What It Means to Prevail
A typical prevailing party contract provision allows the prevailing party in litigation or arbitration to recover their attorney’s fees from the other party. It is an attractive provision when negotiating a construction contract and its existence often weighs on the decision to pursue litigation or arbitration. However, which party “prevails” is not always easy to
USDOT Expands Financing for Certain Transit Projects
The U.S. Department of Transportation (USDOT) recently announced that it will offer more low-cost flexible financing for both transit and Transit Oriented Development projects under the Transportation Infrastructure Finance and Innovation Act (TIFIA). The TIFIA program is intended to help project sponsors reduce costs and speed up the delivery of transit projects. More applicants will
Connecticut Adopts New Codes
Effective October 1, 2022, Connecticut adopted new State Building, Fire Safety, and Fire Prevention codes. The new codes include 12 international and national model codes. The State Building Code applies to most buildings and other structures newly-constructed, altered, added to, or undergoing a change in use. The new codes apply to projects for which a
The AAA Revises its Commercial Arbitration Rules and Mediation Procedures
The American Arbitration Association (AAA) has revised its Commercial Arbitration Rules and Mediation Procedures, effective September 1, 2022. The goal of these revisions is to standardize longstanding AAA practices concerning confidentiality, consideration of consolidation/joinder motions, and civility. The amendments also further promote efficiency, reflect advances in technology, and include discussion on cybersecurity concerns. The