With the exponential spread of COVID-19, owners, contractors, and design professionals are recognizing the substantial impact this pandemic will have on the construction industry. Several states issued shelter-in-place orders, resulting in the suspension of some construction work. In some states, this has resulted in work stoppages on some of our nation’s largest infrastructure projects. The financial impact of these work stoppages will be significant. As a result, parties to construction agreements have looked to their force majeure clauses for guidance on how these issues should be addressed. Continue Reading Coronavirus Pandemic: My Construction Agreement Has a Force Majeure Clause, So Now What?
Illinois Governor J.B. Pritzker issued a shelter-in-place Executive Order on March 20, 2020, the latest in a series of restrictive statewide actions that he has implemented in the effort to prevent further spread of COVID-19, commonly known as the coronavirus. Governor Pritzker’s Executive Order follows the imposition of statewide restrictions on the size of public gatherings, a suspension for bars and restaurants offering dine-in service, and school closures. It currently extends through April 7, 2020. Continue Reading Illinois Governor Issues Shelter-in-Place Order in Response to the Coronavirus that Spares the Construction Industry
On March 13, 2020, President Trump declared a national emergency in response to the coronavirus (COVID-19) outbreak. Such a declaration has significant implications on the contracting community navigating the federal procurement process. While contractors are undoubtedly trying to manage existing contracts in light of labor and supply chain disruptions, many will be looking at the procurement landscape for business opportunities. Federal procurement law contains a number of provisions that authorize streamlined procurement procedures for major disasters or national emergencies. This article addresses the procedures that federal agencies may employ during a national emergency such as COVID-19. Because these procedures do not often look like typical procurement procedures, contractors should be mindful of the rules to better position themselves as they seek out opportunities. Continue Reading Federal Procurement Procedures During a National Emergency
Globally, many developers and contractors are scrambling to identify available contractual relief as the Coronavirus (COVID-19) disrupts cross-border supply chains. US businesses will recall a similar effort just eighteen months ago, when the Trump Administration announced increased tariffs on $300 billion of Chinese goods. That trade war prompted companies to scrutinize remedies and mitigate associated project risks by tapping alternative sources originating in other Asian countries and Canada. Once again, construction industry stakeholders should reexamine delay provisions in pending and future contracts to mitigate risks arising from project disruptions caused by COVID-19.
This article provides an overview of US case law interpreting the doctrine of force majeure in the context of disease-related delay claims. Drawing on that guidance, we then identify practical considerations for applying existing force majeure or related delay provisions and how they may be modified for future projects. Continue Reading Managing Project Risk Associated with the Coronavirus Outbreak Through Force Majeure Provisions
On February 22, 2020, Leah Rochwarg and Wendy Wendrowski will participate as panelists in a program at the American Society of Civil Engineer’s Construction Institute Summit regarding a design professional’s obligation to indemnify its client (to compensate its client for losses sustained because of the design professional’s acts or omissions). While many design contracts include an obligation for the design professional to indemnify and hold its client harmless from such losses, it is less common for a design contract to include an explicit obligation for the design professional to defend its client (to pay up front the client’s costs to defend against an action to recover such losses). The panel discussion will focus on different states’ rules of interpretation regarding the issue of whether an indemnity provision that does not expressly include a duty to defend nonetheless implicitly includes such an obligation.
Find more information about the Construction Institute Summit on the American Society of Civil Engineer’s website.
Federal contractors already subject to a myriad of reporting requirements should be prepared for yet another. Effective December 23, 2019, a new Federal Acquisition Regulation (“FAR”) provision entitled “Reporting of Nonconforming Items to the Government Industry Data Exchange Program” requires federal contractors and subcontractors to report to the Government-Industry Data Exchange Program (“GIDEP”) certain counterfeit or suspect counterfeit parts and certain major or critical nonconformances. The new FAR provision (48 C.F.R. § 46.317) and clause (FAR 52.246-26) applies to both civilian and defense contracts over the simplified acquisition threshold, currently $150,000.
Where did this rule come from?
On January 28, 2020, Seyfarth Partner Mark Johnson will be presenting a Lorman webinar titled “Understanding ConsensusDocs 755 and 756.” ConsensusDocs recently published the new Standard Master Subcontract Agreement Between Constructor and Subcontractor (CD 755) and the Standard Project Work Order (CD 756). Mark will discuss the ConsensusDocs approach and philosophy to its construction forms compared to other industry forms, explore the key revisions made to the existing CD 750 Standard Subcontract Form in order to transform it into the CD 755 and 756 forms. Mark will also explore other key provisions and risk allocations contained in the 755 form, from both the General Contractor and Subcontractor perspectives.
For more information or to register, visit the Lorman website at https://www.lorman.com/training/construction/understanding-consensusdocs-755-and-756.
Foreign states and their agencies engage in a variety of construction projects in the United States, all of which are subject to the Foreign Sovereign Immunities Act (“FSA”). This article explains some of the key aspects of the FSA that foreign governments and contractors should consider when engaging in those projects.
Foreign States and Their Agencies
Foreign states are treated differently from their agencies for certain aspects of the FSA. In deciding whether an entity is the foreign state itself or an agency of it, courts typically evaluate the entity’s primary purpose. If governmental, the entity is considered the foreign state itself, and if commercial, the entity is considered an agency. One line of cases holds if the entity is an integral part of a foreign state’s political structure, it is considered the foreign state itself. Continue Reading Foreign Governments Contracting for Construction in the United States: Navigating the Foreign Sovereign Immunities Act
Airports Council International is the only global trade representative of the world’s airports, and the Airports Council International represents airports interests with governments and international organizations such as ICAO, develops standards, policies and recommended practices for airports, and provides information and training opportunities to raise standards around the world. The team is led by Washington, DC attorneys James Newland, Randel Johnson, Christa Dommers, Leon Rodriguez, and Alex Passantino. We are looking forward to continuing to serve as cross-disciplinary counsel to the world’s airports owners, operators, and developers.
While China commands the media spotlight in the global war on trade, new trade battles are being waged south of the equator. On Monday December 2, 2019, President Trump announced that he would reinstate tariffs on aluminum and steel imports from Argentina and Brazil amid accusations that those countries have been engaging in a “massive devaluation of their currencies.” The President’s announcement, which came via Twitter, also urged the Federal Reserve to take measures to counter foreign currency devaluation, which negatively impacts US manufacturers and farmers ability to fairly export their goods.
Details of the new mandate are unclear as the White House has yet to release an order explaining the changes. Although the US started imposing global tariffs of 25% on steel and 10% on aluminum in 2018 on countries such as China, certain countries, including Brazil and Argentina, were quick to negotiate exemptions from the tariffs in the form of duty-free quotas. The President’s mandate comes on the heels of softening economies and weaker currencies in Brazil and Argentina, which has the effect of making farm goods in those countries cheaper than US farm production. Continue Reading President Trump to Restore Tariffs on Aluminum and Steel Imports from Brazil and Argentina