Subcontract Flow-Down Provisions: Constructive Acceleration and Delays on Federal Projects

A contractor’s claims against the government for constructive acceleration and delays are governed, in part, by the applicable clauses of the Federal Acquisition Regulations (FAR) incorporated into its contract with the government. Whereas a subcontractor’s claims against a contractor for constructive acceleration and delays are governed, in part, by which FAR clauses are incorporated into its subcontract. Prime contractors and subcontractors on federal projects should be aware of the importance of understanding flow-down provisions in subcontracts and how they can . . . Read More

Changes to Construction Prompt Payment Act: What It Means for Construction Contractors Operating in DC

In 2023, the Private Contractor and Subcontractor Prompt Payment Act of 20131 (the Act) was amended to include additional protections for subcontractors on private projects by limiting a contractor’s setoff rights related to claims or damages on other projects. This limitation also applies to first-tier subcontractors. Below, attorneys in PilieroMazza ’s  Construction Group summarize what changes to the Act mean for construction contractors and subcontractors working on private construction projects in DC. The Act—which governs private projects—requires contractors and first-tier subcontractors to pay . . . Read More

5 Tips to Protect Construction Contracts During An Economic Downturn

For two consecutive quarters, the U.S. economy experienced an economic decline—typical indicators of an impending recession. Despite what the numbers may indicate, it is still unclear what direction the U.S. economy may take. Whether a recession is already here or on the way, here are five tips to help protect your construction contracts—particularly payments for your work. 1. Review Your Construction Contracts Do not wait to review your construction contracts. Understand the financial status and the payment terms applicable to each . . . Read More

Takeaways from Biden Administration’s Initiative to Promote Equal Opportunity in Federally Funded Infrastructure Projects

On March 14, 2023, the U.S. Department of Labor (DOL) announced the launch of the “ Mega Construction Project Program ” initiative, which is designed to promote equal opportunity and expand the workforce in construction trades involved with large federally funded projects. The Mega Construction Project Program will focus DOL’s efforts to bring the public and private sectors together on a select group of projects to provide a diverse pool of qualified workers access to jobs in construction trades. Projects eligible for designation under . . . Read More

New Virginia Law Prohibits “Pay-When-Paid” and “Pay-If-Paid” Provisions in Construction Contracts

Construction contracts routinely set payment terms as “pay-when-paid” or “pay-if-paid.” These terms protect the prime contractor from bearing all the risk of nonpayment by the owner. In Virginia, however, that will not be true for much longer. Last month, Virginia lawmakers passed Senate Bill 550, which makes “pay-when-paid” and “pay-if-paid” clauses unenforceable in most circumstances. Specifically, the new law applies to both public construction contracts and certain private construction contracts that involve at least one general contractor and one subcontractor. . . . Read More

New Infrastructure Bill and Its Impact on Disadvantaged Business Enterprises in the Construction Industry

The Infrastructure Investment and Jobs Act ( the Bill )—which makes a portion of its $1.2 trillion available for surface transportation projects—currently awaits signature from President Biden and will have significant impacts for construction contractors participating in the Department of Transportation’s (DOT) Disadvantaged Business Enterprises (DBE) Program. The Bill addresses aid to federal highways, transit, highway safety, motor carrier, research, hazardous materials, and rail programs. DOT’s DBE Program permits states to set up DBE programs, in compliance with DOT standards, that promote . . . Read More

COVID-Related Construction Claims: 4 Key Strategies for Recovery

The construction industry has seen increased costs and contract performance concerns resulting from the impacts of COVID-19. For construction firms contracting with the government, it is critical to understand how to position the firm to recover increased costs. Following are four key recovery strategies to better prepare you before filing a claim or request for equitable adjustment (REA). 1. Understand How Contract Provisions Help Carefully examine the contract to identify provisions that may excuse delays or provide for recovery in . . . Read More