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 now be eligible for low-cost flexible financing for up to 49 percent of eligible project costs for projects that meet certain eligibility requirements.  Previously, most TIFIA loans were capped at 33 percent of eligible project costs.  Each project must cost at least $10 million and comply with applicable federal regulations and policies associated with federal funding programs.

For transit projects, sponsors of projects may apply for loans up to 49 percent of project costs that are eligible for assistance under Chapter 53 of Title 49 of the U.S. Code.  This Chapter covers transportation projects that construct or improve public transportation systems, including any capital project or associated improvement eligible for Federal Transit Administration funding, such as infrastructure and vehicles for bus, subway, light rail, commuter rail, trolley, or ferry systems.

For Transit Oriented Development, eligibility for such loans extends to projects that are eligible for assistance under 23 U.S.C.A 601(a)(12)(E), which includes projects located within walking distance of, and accessible to, a fixed guideway transit facility, passenger rail station, intercity bus station or intermodal facility, as well as projects for economic development, including commercial and residential development, and related infrastructure and activities.  Such projects must also have a high probability of commencing the contracting process for construction within 90 days after a loan is provided and a high probability of reducing the need for financial assistance under any other federal program for the relevant passenger rail station or service by increasing ridership, tenant lease payments, or other activities that generate revenue exceeding costs. 

To achieve its goal of better connecting people to housing, jobs, schools, and public transportation, the USDOT is prepared to provide technical assistance on innovative transit-related concepts and to support project sponsors through the loan approval process.  Additional information can be found at

The Department of Transportation (DOT) recently published a notice in the Federal Register of proposed rulemaking (NPRM) to amend the Disadvantaged Business Enterprise (DBE) and the Airport Concession Disadvantaged Business Enterprise (ACDBE) regulations.  87 Fed. Reg. 43620 (July 21, 2022). This proposal is the first NPRM update since 2014.  While the DOT was originally scheduled to close the comment period on September 19, 2022, it agreed to extend the comment period until October 31, 2022, to provide sufficient time to prepare and submit comments to the docket. 

The proposed revisions to the regulations were drafted by the DOT’s Office of Civil Rights, together with the Federal Aviation Administration (FAA), the Federal Highway Administration and the Federal Transit Administration, in an effort to help small businesses better compete for contracts on aviation, highway, and transit projects with federal funding.  While some of the NPRM changes were minor, others would significantly expand program eligibility and modify airport sponsors’ regulatory duties.  The bulk of the NPRM addresses the DBE program, which is regulated under Part 26 of Title 49 of the Code of Federal Regulations (CFR) and contains approximately 20 changes (found here.)  Highlights of some significant changes are summarized below.

Personal Net Worth – Perhaps the most significant change is the proposal to increase the Personal Net Worth (PNW) cap for owners of both DBEs and ACDBEs from $1.32 million (last adjusted in 2011) to $1.6 million and exclude retirement assets from the calculation.  Additionally, community property rules are excluded and while “household contents” of the primary residence are still divided equally, the NPRM is modified to clarify that motor vehicles of any type belong to the person who holds the title. Finally, the DOT may make future adjustments to this amount without the need for rulemaking by using Federal Reserve data.  Such modifications should allow more owners to qualify as DBEs and permit existing DBEs to stay in the program longer.   

Ownership Requirements – The NPRM replaces the “real, substantial, and continuing” capital contribution standard with a less-rigid standard of “reasonable economic sense.”  Further, the NPRM clarifies that ownership investment includes purchases, capital infusions, gifts, and additional investments after initial ownership.  Additionally, the marital property provision has been removed.  These modifications that are no longer so narrowly construed provide owners with more flexibility for demonstrating contributions toward ownership.

Limits Total DBE supplier Goals –  The NPRM reduces the allowable credit for a prime contractor’s expenditures with DBE suppliers (manufacturers, regular dealers, distributors, and transaction facilitators) from 60 percent to 50percent of the contract goal.  However, exceptions may be granted by the DOT on a one-off basis, if prior approval is sought and obtained.  This modification is intended to limit a contractor’s ability to receive substantial DBE credit for using DBEs that provide only a gratuitous, pass-through function.  However, this modification may present difficulties for contractors in certain market areas where material resources and DBE participation are limited.

Reciprocity of DBE Certification – The NPRM proposes to establish interstate certification for DBEs.  DBEs certified in one state (State A) will no longer have to resubmit entire applications to other states.  Rather, a DBE seeking certification in State B need only provide evidence of certification and submit a declaration of eligibility.  State B then has 10 business days to certify the firm. However, after certifying the firm, State B may conduct its own certification review and initiate decertification procedures if it finds “reasonable cause” for determining that the DBE is ineligible for certification in State B.  Note that the standard for review has been heightened from the previous “good cause” grounds to “reasonable cause.”  This modification is intended to reduce the administrative burden on the DBEs that must now file comprehensive applications in each state (or city) and which then must be approved by all entities.  While this modification serves to streamline the approval process, if a DBE is decertified and if the DOT upholds the decision upon appeal, the DBE is automatically decertified in all states. Thus, the new modifications may allow for greater business opportunities in more states; however, they also place a DBE at risk of losing all DBE business nationwide should it be decertified.

Decertification Procedural Protections – The NPRM would require the authorizing agency to “meaningfully explain” the basis for any recommendation to decertify a DBE, modify the requirements for decertification hearings, and provide additional procedures for certification appeals.

Annual Reporting – The NPRM proposes to enhance the available information of DBE directories and create a centralized database for a DBE Bidders List through the DOT.   In addition to serving as a reporting system for DBEs to identify available bids and winning bids, data are also proposed to be used for program evaluation and goal setting.

Formalizing COVID-19 Guidance – The NPRM provides for continuation of virtual on-site interviews, virtual certification and decertification hearings, and alternative notarization methods.  These modifications are intended to conserve certification agency resources.

Appeals to DOT – The NPRM reduces the time for a DBE to appeal an in-state certification denial from 90 days to 45 days and permits the DOT to summarily dismiss an appeal, at its discretion.  This modification cuts in half the DBE’s time to file an appeal, a decision which affects the DBE’s ability to become certified or maintain its certification nationwide.

Clarifies Counting after Decertification – The NPRM proposes that prime contractors would only be permitted to add work or extend a completed subcontract with a decertified DBE (that received notice of decertification after the subcontract was executed) if it obtains prior, written consent from the recipient.  This modification was proposed to address the concern that contractors in design-build contracts only commit to work with specific DBEs once they have been awarded a subcontract and then add work to an existing contract with decertified firms.  

Prompt Payment Requirements   The NPRM requires that recipients affirmatively monitor the contractor’s compliance with subcontractor prompt payment and return-of-retainage requirements.  While this section does not mandate the specific monitoring mechanism, recipients are expected to enforce prompt payment and retainage compliance.  These requirements also flow down to all lower-tier subcontractors.   This modification was intended to address the barriers DBEs face to compete due to lack of prompt payment by taking steps to meet this challenge. 

ACDBE Modifications – The NPRM (1) adds, clarifies, and aligns the ACDBE program definitions with DBE program definitions; (2) replicates the DBE program’s small business element requirements;  (3) establishes procedures for counting ACDBE participation for firms that are decertified during the contract performance period due to exceeding the business size standard or the disadvantaged owner PNW limits; (4) clarifies goals setting and reporting requirements; and (5) seeks comment on whether to increase long-term lease agreements. 

This significant set of proposed rules offers an opportunity for many programming changes.  The comments posted to date range from supportive to critical and suggest that there still remain many questions and recommendations for improvement.  Following the close of the comment period, the DOT will consider modifications to the proposed rules.

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 permit is applied after the effective date. A grace period of approximately three months from the effective date may be available by applying for a code modification from the applicable office for projects significantly impacted by the code changes. Such a modification, if granted, would allow the project to continue under the 2018 codes.  If a municipality requires separate permit applications for each trade or portion of a project, then the application date for the primary permit will determine the code applicable to all permits for the project.  Additional information regarding all codes is available on the Connecticut Department of Administrative Services website.

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 following is a summary of the revisions:

* On confidentiality, the amended Rules codify the longstanding practice that all matters related to an arbitration, including the final award, are kept confidential. The amended Rules have further empowered arbitrators to issue confidentiality orders as needed.

* On the topic of consolidation and joinder, the AAA has made significant changes. More specifically, parties can now request the consolidation of arbitrations or joinder of additional parties. Unless all parties are in agreement, the decision to allow consolidation or joinder is left to the discretion of the arbitrator. In determining whether a request to consolidate or join may be granted, an arbitrator must consider: (1) the terms and compatibility of the agreements to arbitrate; (2) applicable law; (3) the timeliness of the request to consolidate and the progress already made in the arbitrations; (4) whether the arbitrations raise common issues of law and/or fact; and (5) whether consolidation of the arbitrations would serve the interests of justice and efficiency.

* On civility, new rule R-2 (c) requires that parties and their representatives appearing for arbitration pursuant to the AAA must conduct themselves in accordance with the AAA’s Standards of Conduct for Parties and Representatives (Standards). If a party fails to act pursuant to the Standards, the AAA may decline to further administer a particular case or case load.

* On promoting greater efficiency, the amended Rules prohibit any motion practice absent showing good cause and arbitrator permission. Discovery, other than a basic exchange of exhibits, also is prohibited.

* Reflecting on the advances in technology, the amended Rules now permit video, audio, or other electronic conference methods, in addition to the traditional, in-person conference, for each hearing. This development is most likely a result of pandemic-era success for AAA conferences.

* Regarding cybersecurity, the amended Rules include cybersecurity privacy and data protection issues as part of the checklist of topics for discussion at the preliminary hearing. Specifically, the amended Rules ask that discussion regarding the appropriate level of security and compliance in connection with the proceeding pursuant to the AAA is had at the preliminary hearing.

* Lastly, the Rules include the adjustment in the amount-in-controversy requirements for several types of arbitrations. Specifically, claims of up to $100,000, rather than the previous $75,000, may now qualify for expedited arbitration, allowing for a greater number of cases to utilize the expedited arbitration process. The amount-in-controversy requirement for the large, complex case track has doubled to $1 million. For a large, complex case to qualify for a panel of three arbitrators, claims and counterclaims must equal or exceed $3 million, triple the previous requirement.

An often-overlooked part of contract negotiations is the language included in the performance bond.  While the owner or contractor (bond obligee) requires a performance bond and pays for it, negotiating efforts are typically spent on the main contract language itself rather than the bond.  A common go-to performance bond form used in the construction industry is the AIA A312-2010 (A312).  If the bond obligee fails to make a simple change to the A312 form language, it can end up costing the bond obligee far more later when it seeks to enforce the bond and the surety declines coverage.

The A312 includes several express conditions precedent that must be satisfied before a surety’s obligation to respond to a claim on the bond is triggered.  The conditions precedent are contained in Section 3 of the A312.  Section 3 requires the bond obligee to provide notice of its intention to declare a default, an opportunity to cure, the declaration of default, and actual termination of the subject contract.  Section 5 of the A312 identifies the surety’s response options after the bond obligee satisfies the conditions in Section 3.  Many courts have held that the failure to strictly comply with all of the A312 Section 3 requirements renders the bond null and void and completely discharges the surety from all obligations under the bond.  A general contractor in Massachusetts recently learned this the hard way.

In Arch Insurance Co. v. Graphic Builders, LLC, 36 F.4th 12 (1st Cir. 2022), the contractor (bond obligee) made a claim under an unmodified A312 performance bond against a window supplier and its surety to pay for the multi-million-dollar cost to correct defective windows and to get a window warranty.  The contractor declared a default, but did not terminate the window supplier’s contract on the legitimate belief that since the work was substantially complete, such an option would have been a wrongful termination under Massachusetts common law.  The Circuit Court of Appeals acknowledged the contractor’s dilemma, but enforced the termination requirement in Section 3 in the A312 and affirmed the district court’s entry of summary judgment discharging the surety from liability on the bond.  The Court simply enforced the language in the bond to which the contractor had agreed.  As a result of not modifying the A312, the contractor was stuck not only with the cost of the bond and the window repair costs, but also significant legal fees to arrive at this court decision.

It is not uncommon for a claim against a performance bond to be asserted at the end of a project, after a party to the contract learns something went wrong and needs to be fixed.  To avoid the fate of the contractor in Graphic Builders, a bond obligee should remove the termination requirement in section 3.2 of the A312 (and from any other performance bond containing similar language), while negotiating the overall contract, to limit the final condition precedent in the bond to the declaration of a contractor default.  The bond obligee should not have to terminate the contract before the surety’s obligations are triggered and deal with the other potential issues that might accompany such an action late in a project.  Notice to the surety and principal that the bond obligee is considering declaring a default, providing an opportunity to cure, and a declaration of default should be all that is necessary before the bond obligee is entitled to the benefits of the performance bond for which it has paid.    

The recent Connecticut Appellate Court decision in Electrical Contractors, Inc. v. 50 Morgan Hospitality Group, LLC, 211 Conn. App. 724 (2022), eliminated any remaining doubt regarding a subcontractor’s right to payment for work performed when the subcontract includes a “pay-if-paid” provision. A pay-if- paid provision that makes an owner’s payment to the general contractor (GC) a condition precedent to the GC’s payment to a subcontractor excuses the GC from paying its subcontractor until it actually receives payment from the owner. If the owner doesn’t ever pay the GC, the condition is not fulfilled, and the subcontractor’s right to payment, never arises.  

The payment provision in this subcontract was short and simple.  It provided: “[T]he [subcontractor] expressly agrees that payment by [owner] to [GC] is a condition precedent to [GC’s] obligation to make partial or final payment to [subcontractor]…”  The Appellate Court found this language to be clear and unambiguous and affirmed the lower court’s summary judgment order as a matter of law.  Whether such provision is fair or reasonable does not matter so long as both parties are sophisticated business entities and the contract is not voidable on grounds such as mistake, fraud, unconscionability, or violative of public policy, none of which applied here.  A court will generally enforce the contract as written and not introduce new terms to which the parties did not agree.

Prior to this decision, several lower superior court decisions generally interpreted a similar payment provision including the term “condition precedent” alone, without any additional express risk-shifting language, such as a “pay-when-paid” provision, which simply postponed the GC’s payment obligation for a “reasonable” time.  Payment was still due the subcontractor at some point, without regard to whether the owner ever paid the GC.  However, these lower court decisions are not binding on any other courts and the Appellate Court firmly shut the door on any such equitable interpretations.

Subcontractors usually have little bargaining power when negotiating the terms of a subcontract; GC’s typically include pay-if-paid language in their subcontracts.  Subcontractors are left to either accept the risk of non-payment by the owner, a party with whom it has no contractual relationship, or not take the job.  The only hope at this point for more equitable subcontracts in Connecticut will be through legislative action prohibiting the use of pay-if-paid provisions in construction contracts.     

The American Institute of Architects (AIA) Contract Documents program recently released a limited number of state-specific Sworn Construction Statements and Lien Waiver and Release forms for use on construction projects. At the same time, the AIA also released generic versions of the waiver and release forms for use in states without specific statutory requirements.

At present, twelve states in the United States (Arizona, California, Florida, Georgia, Massachusetts, Michigan, Mississippi, Missouri, Nevada, Texas, Utah, and Wyoming) regulate lien waiver and release forms on construction projects. These regulations vary in their requirements. While some state statutes only regulate the language to be used on the forms (i.e., Arizona), other state statutes seek to regulate the lien waiver and release forms down to the font size used (i.e., Georgia). Given the specificity of such regulations, lien waiver and release forms that do not conform with state regulations are routinely found invalid by courts, if challenged.

Because courts routinely demand strict adherence to the statutory requirements for lien waiver and release forms in states in which such forms are regulated, the AIA has carefully curated Sworn Construction Statements and Lien Waiver and Release forms for the 12 regulated states to conform with state statutes and has locked the ability to edit these forms, other than to permit the input of project specific details. The AIA has maintained the ability to edit the generic Sworn Construction Statements and Lien Waiver and Release forms, however, to fit the needs of a project in a state in which the forms are not strictly regulated.

Despite the care taken to craft and protect the Sworn Construction Statements and Lien Waiver and Release forms, the AIA nevertheless recommends that parties consult with their attorneys prior to using an AIA lien waiver and release form to ensure the form selected is valid and consistent with the parties’ needs for a particular project.  

Below is an excerpt of an article published in Construction Executive on August 9, 2022 authored by Megan R. Naughton, co-chair of Robinson+Cole’s Immigration Group

Although the visa options are limited, there are some that can be explored by construction companies in the United States, including the following.


The H-1B visa category may be available for construction positions that require at least a bachelor’s degree in a specific field such as civil engineering, construction management or accounting. The timing can be challenging if an employer is looking to hire a recent graduate or someone outside of the United States for a role because of the H-1B lottery but can work well if the candidate is already in H-1B status and working for another company. These visas are site-specific, so they may need amending if a worker is moved from one site to another. Read the full article.

The purpose of a liquidated damages provision in a construction contract is to establish in advance a fair amount of compensation to the injured party for a breach of contract to avoid spending time and money fighting over uncertain actual damages after they occur.  Generally, to be enforceable, a liquidated damages provision must satisfy three criteria: (1) the damages resulting from a breach of contract must be uncertain when the parties enter the contract; (2) the parties must clearly express their intent to liquidate damages in advance; and (3) the amount stipulated for liquidated damages must be reasonable and commensurate with the actual damages it is meant to represent.  Failure to satisfy any of these criteria could render the provision unenforceable.

The recent Connecticut Appellate Court decision in New Milford v. Standard Demolition Services, Inc., 212 Conn. App. 30 (2022), indicates that courts might be reluctant to read a liquidated damages clause broadly, and raises concerns regarding the proper drafting of such a provision.  The Appellate Court held that when a liquidated damages provision in a construction contract is expressly limited to damages resulting from delay, it will not operate to prevent the recovery of actual and consequential damages caused by the non-breaching party for a reason other than delay.

The contract at issue in New Milford included a typical liquidated damages provision: “Failure of the Contractor to meet this established timeframe will result in in liquidated damages being assessed in the amount of $2,000/day for each and every calendar day beyond the contract time limit.”  The Court noted that the liquidated damages provision was clearly linked to a Contractor’s untimely performance and that the provision did not expressly state that liquidated damages are the exclusive remedy.  Moreover, other provisions in the contract expressly permitted the Town to recover “damages and losses,” arising from other types of breach by the Contractor, so the Court determined the liquidated damages provision did not preclude the Town from recovering additional actual and consequential damages caused by other breaches of the contract unrelated to delays.  To find otherwise would be to render the other remedial provisions superfluous, which courts avoid when interpreting contracts. 

A Court generally will not construe a contract to limit remedial rights unless there is a clear intention that the enumerated remedies are exclusive.  If a contracting party intends to make liquidated damages the exclusive remedy for all actual and consequential damages for a breach of contract, that intent should be expressly stated and there should be no references to other damages elsewhere in the contract.

Terminating a contract is a serious and sometimes risky decision. Whenever a client seeks advice regarding termination, a lawyer should stress the importance of strict compliance with the contractually specified termination provisions. One misstep by a terminating party who otherwise did nothing wrong could be a material breach of contract exposing the terminator to potentially large damages, even if the party being terminated first failed to perform under the contract. Is termination less risky with contracts that do not include any termination provisions? A Connecticut Supreme Court decision recently addressed this question and its ruling could have significant impacts.

The court ruled in Centerplan Construction Co. v. City of Hartford, 343 Conn. 368 (2022), that when a contract is silent as to termination notice and cure rights, a right to cure within a reasonable time is implied as a matter of law, unless that right is expressly waived. Notice and cure rights are thus implied in every contract and noncompliance with this unwritten requirement exposes a terminator to damages as if it had not followed the actual written provisions. This presumably applies not only to every proposal, purchase order, and short form contract, but also to oral agreements. Even if a party is in default and the project is delayed, Centerplan holds that it is entitled to notice and an opportunity to cure within a reasonable time before it may be terminated. The court provided no guidance on how long is “reasonable” to cure, so allowing an unreasonably short cure time before termination could conceivably expose the terminator to liability as well.

All may not be lost if a terminator doesn’t provide notice and the right to cure within a reasonable time, though it may involve a lawsuit. A terminator may have defenses against a claim for wrongful termination if, for example, a breach is truly incurable or the opportunity to cure is futile. The terminator would bear the burden of proving such defenses in court. The better approach would be to avoid this issue altogether by including language in every contract either incorporating notice and cure obligations (so they can be followed in the event of termination) or expressly waiving them.