PowerPoint Presentation| © 2021 Perkins Coie LLP2
2021 Legislative and Case Law Update – Mica Klein 9:10 - 9:35
The 2021 Reauthorization of RCW 39.10: Updates on What Changed –
Andrew Greene, Janice Zahn (Port of Seattle), and Scott Middleton
(MCAWW)
9:40 - 10:10
10:15 - 10:45
9:00 - 9:10
9:10 - 9:35
The 2021 Reauthorization of RCW 39.10: Updates on What Changed –
Andrew Greene, Janice Zahn (Port of Seattle), and Scott Middleton
(MCAWW)
9:40 - 10:10
10:15 - 10:45
Agenda
The “New” COVID-19 Requirements: What You Need to Know – Andrew
Greene and Jon Goddard
11:00 - 11:30
The “New” AIA Documents: A Refresher – Graehm Wallace and Michelle
Maley
11:30 - 12:00
Break 12:00 - 12:15
Contractor Requests for Time and Money (Including for COVID-19!) in
a Pandemic Influenced Market – Graehm Wallace and Geoff
Palachuk
12:15 - 12:45
Q&A and Closing Thoughts – Dick Prentke 12:45 - 1:00
The “New” COVID-19 Requirements: What You Need to Know – Andrew
Greene and Jon Goddard
11:00 - 11:30
The “New” AIA Documents: A Refresher – Graehm Wallace and Michelle
Maley
11:30 - 12:00
12:00 - 12:15
Contractor Requests for Time and Money (Including for COVID-19!) in
a Pandemic Influenced Market – Graehm Wallace and Geoff
Palachuk
12:15 - 12:45
12:45 - 1:00
2021 LEGISLATIVE AND CASE LAW UPDATE 33RD ANNUAL SCHOOL
CONSTRUCTION WORKSHOP
OCTOBER 29, 2021 | PRESENTED BY: MICA KLEIN
NEW LEGISLATION
• Amendments to RCW 39.30.060 correct technical error
• Listing requirements do not apply to design-build, GC/CM, or job
order contracts
• CPARB must report on fairness and transparency of subcontractor
listing policies
On a prime contract that is expected to cost $1,000,000 or more,
bidders must submit:
• a listing of HVAC, plumbing, and electrical subcontractors within
one hour of the published bid submittal time, OR AND
• a listing of the structural steel installation and rebar
installation subcontractors within 48 hours of the published bid
submittal time
| © 2021 Perkins Coie LLP7
• Amendments intended to expand public contracting opportunities
for WMBE by increasing regulatory oversight and accountability of
the OMWBE
• Audit and Review unit established
• OMWBE to annually identify state agencies and educational
institutions with low levels of participation
| © 2021 Perkins Coie LLP
ALTERNATIVE PUBLIC WORKS REAUTHORIZED
COVID DELAY COSTS
• Proposed amendments to “no damages for delay” statute (RCW
4.24.360)
• Amendments would prohibit public works contracts from waiving
rights of a contractor to damages or equitable adjustment arising
out of a delay caused by the COVID- 19 pandemic
“Any clause in a public works contract which purports to waive,
release, or extinguish the rights
of a contractor, subcontractor, or supplier to damages or an
equitable adjustment arising out of a delay in performance which
delay is caused by
the COVID-19 pandemic emergency proclamations is against public
policy and is void and
unenforceable.”
CORRECTION TO CM RULES
• Proposed bill would confirm low bid requirements do not apply to
personal service contracts for construction management, value
engineering, constructability review, and building commissioning
services.
“When, in the opinion of the board of directors of any school
district, the cost of any furniture,
supplies, equipment, building, improvements, or repairs, (or) other
construction work by a contractor who meets the criteria in
RCW
39.04.350, or other purchases, except books, will equal or exceed
the threshold levels specified in subsections (2) and (4) of this
section, complete
plans and specifications for such work or purchases shall be
prepared . . .”
CASE LAW UPDATES
MIXED-USE DISPUTE
payment • Mixed verdict, net judgment
to GC totaling $9.2M • Court of Appeals held jury
instruction was misleading and reversed for new trial
• Supreme Court reversed
“AP has the burden to prove that Lake Hills provided the plans and
specifications for an area of work at issue, that AP followed those
plans and specifications, and that the [construction] defect
resulted from defects in the plans or specifications. If you find
from your consideration of all the evidence that this affirmative
defense has been proved for a particular area, then your verdict
should be for AP as to that area.”
| © 2021 Perkins Coie LLP13
GC/CM BID PROTEST DISPUTE
• Preliminary injunction denied in Superior Court
• Appeal to Washington Court of Appeals (Division I)
• Appeal dismissed “. . . [O]ur Legislature has created [CPARB] to
advise the legislature on policies related to public works delivery
methods like RCW 39.10.390. Its membership includes many
stakeholders in public contracting . . . stakeholders impacted by
the GC/CM delivery method, have a clear avenue to pursue questions
about RCW 39.10.390 through their advisory role.”
| © 2021 Perkins Coie LLP14
AGC of Washington, et. al., Appellants v. Jay Inslee, et. al.,
Respondents
PREVAILING WAGE STATUTE
• Senate Bill 5493: prevailing wage rates solely based on
CBAs
• AGC and other contractor organizations challenged law
• Court of Appeals (Division II) held new RCW 39.12.015(3)
unconstitutional
| © 2021 Perkins Coie LLP15
TERMINATION DISPUTE
• Superior Court converted to termination for convenience and
awarded damages
• Court of Appeals (Division I) largely affirmed
• Supreme Court affirmed in part, holding that City was not
entitled to termination for default
| © 2021 Perkins Coie LLP16
WSDOT PROJECT DISPUTE
• Earthwork sub sued, claiming $12M in damages
• GC counterclaimed, alleging earthwork sub caused delays
• Split result following bench trial • Following cross appeals,
Court
of Appeals (Division I) affirmed, confirming enforceability of
notice and claim provisions
| © 2021 Perkins Coie LLP17
DEVELOPER DISPUTE
• Concrete and steel sub brought suit against developers for
non-payment
• Developers counterclaimed for fraud, other claims
• Arbitrator awarded sub $5.2M • Superior Court and Court of
Appeals affirmed and awarded attorneys’ fees
THANK YOU
THE 2021 REAUTHORIZATION OF RCW 39.10: UPDATES ON WHAT
CHANGED
33RD ANNUAL SCHOOL CONSTRUCTION WORKSHOP
OCTOBER 29, 2021 | PRESENTED BY: ANDREW GREENE JANICE ZAHN, PORT OF
SEATTLE SCOTT MIDDLETON, MCAWW
| © 2021 Perkins Coie LLP20
• Two new CPARB positions: one representing diverse business
community and one representative from a transit agency
• Consolidation of existing provisions regarding heavy civil GC/CM
procurement into one new section
• New WSU pilot program for small design-build projects of less
than $2mil • Requirement for project approval if public agency
elects to use design-build for
pre-engineered metal buildings • Provisions to improve
opportunities for minority, women, and veteran-owned
businesses and small businesses; including a work plan for best
practices guidelines
• Project Review Committee must represent a balance of public and
private sector representatives with at least one member
representing the interests of disadvantaged business
enterprises
High Level Summary of RCW 39.10 Changes
| © 2021 Perkins Coie LLP21
• The public body is encouraged to post the design-build
opportunity in additional areas, such as websites for business
associations or the office of minority and women's business
enterprises, to further publicize the opportunity for qualified
design-build teams.
• Evaluation factors must include a proposer's inclusion plan for
small business entities and disadvantaged business enterprises as
subconsultants, subcontractors, and suppliers for the project, to
the extent permitted by law.
• Evaluation factors may also include, but not be limited to, the
technical approach ((, design concept, and the outreach plan to
include small business entities and disadvantaged business
enterprises as subconsultants, subcontractors, and suppliers for
the project)) or the design concept.
Changes related to Design Build – RCW 39.10.330
| © 2021 Perkins Coie LLP22
• Any contract must require the firm awarded the contract to track
and report to the public body and to the office of minority and
women's business enterprises its utilization of the office of
minority and women's business enterprises certified businesses and
veteran certified businesses.
• A public body shall establish a committee, including a member
with knowledge and experience in state and federal laws, rules, and
best practices concerning public contracting for minority, women,
and veteran-owned businesses and small businesses, to evaluate the
proposals.
Changes related to Design Build – RCW 39.10.330
| © 2021 Perkins Coie LLP
• “Budget Contingencies” and “Risk Contingency” now defined
• These contingency types have been interpreted and used
inconsistently in public works construction - For example, “risk
contingency” (contractor’s contingency) has been used to
cover overall budget shortfalls
24
• Reduces time for public owners to process and respond to requests
for equitable adjustments, change orders and claims from 60 days to
30 days
• If 30-day period expires without a response from the public
owner, the EA, change order, or claim is not “deemed denied” so the
parties do not necessarily need to move on to dispute resolution
process.
GCCM-Related Changes
| © 2021 Perkins Coie LLP
FEE AND OTHER PRICE-RELATED FACTORS IN SELECTION OF GCCM – RCW
39.10.360
25
• While statute still requires evaluation of a fee, it now gives
public owners the option to request other price-related factors for
evaluation purposes - Specified general conditions (SGCs) are no
longer a requirement - Fee and SGCs are still required in
alternative subcontractor selection process
• RFP must define any price-related factors used for evaluation
purposes
GCCM-Related Changes
26
• Authorized for all trades with a $3M anticipated subcontract
value • PRC approval to use process required for non-certified
public owners • Notice of intent to use process must be published
in same publication as
call for proposals • RFP must include definitions of what should be
included as a specified
general condition and what should be included as the fee (matrix) •
Written final determination must reasonably address comments
received • RFP must describe how interviews, if used, will be
evaluated • Cumulative scoring of nonprice and price factors is
required
GCCM-Related Changes
27
• RCW 39.10.380(1) now requires individual bid packages to be
prepared with trades separated in a manner consistent with industry
practice
• Bundling of trades in a manner inconsistent with industry
practice is prohibited without justification and specific approval
by public owner
• More work being done on this topic in best practices
GCCM-Related Changes
28
• RCW 39.10.380(6) now allows more flexibility for GCCMs to
negotiate with the lowest responsible and responsive bidder on an
adjustment to the low bid or proposal price based on agreed changes
to plans and specs when: - All responsive bids and proposal prices
exceed published bid package
estimates; and - The apparent low responsive bid does not exceed
the published bid package
estimate by more than 10 percent
• Publishing bid package estimates is a new statutory
requirement
GCCM-Related Changes
• "Coefficient" means the job order contractor's competitively bid
numerical factor applied to the public body's prices as published
in the unit price book.
• "Job order contract" means a contract in which the contractor
agrees to a fixed period, indefinite quantity delivery order
contract which provides for the use of ((negotiated, definitive))
work orders for public works as defined in RCW 39.04.010.
• "Unit price book" means a book containing specific prices, based
on generally accepted industry standards and information, where
available, for various items of work to be performed by the job
order contractor. ((The prices may include: All the costs of
materials; labor; equipment; overhead, including bonding costs; and
profit for performing the items of work. The unit prices for labor
must be at the rates in effect at the time the individual work
order is issued.))
Definitions RCW 39.10.210 related to JOC
| © 2021 Perkins Coie LLP30
• The public body is encouraged to post the request for proposals
for job order contracts and the availability and location of the
request for proposal documents in other areas, such as websites for
business associations, the office of minority and women's business
enterprises, and other locations and mediums that will further
publicize the opportunities.
• The identity of the specific unit price book to be used and a
description of which elements shall be included in the coefficient
as necessary to establish a firm fixed price on work orders to be
awarded under the job order contract.
• The public body shall ensure that evaluation factors include, but
are not limited to, ((proposal price)) the coefficient and the
ability of the proposer to perform the job order contract.
Request for Proposal for JOC
| © 2021 Perkins Coie LLP31
• After the committee has selected the most qualified finalists,
the finalists shall submit ((final proposals, including sealed bids
based upon the identified unit price book)) a sealed bid including,
but not limited to, coefficient(s). Such bids may be in the form of
coefficient ((markups from)) adjustments to the listed unit price
book ((costs)).
• As part of annual notification: - The job order contractor is
encouraged to post the notification of
intent to perform public works projects in other areas, such as
websites for business associations, the office of minority and
women's business enterprises, and other locations and mediums that
will further publicize subcontractor opportunities.
Request for Proposal for JOC
| © 2021 Perkins Coie LLP32
• Job order procedure—Required information.
• Each public body shall maintain and make available the following
information for each job order contract: • (1) A list of work
orders issued; • (2) The cost of each work order; • (3) A list of
subcontractors hired under each work order, including whether those
subcontractors were certified small, minority, women, or
veteran-owned businesses; and • (4) A copy of the intent to pay
prevailing wage and the affidavit of wages paid for each work order
subcontract.
RCW 39.10.460
• CPARB shall publish best practices guidelines for increasing and
sustaining access to contracting opportunities in alternative
public works for minority, women, and veteran-owned businesses, and
small businesses and recommendations for changes to state law by
June 30, 2022
• Business Equity/Diverse Business Inclusion Committee is
conducting enhanced public engagement and developing best practices
guidelines
• RCW 39.10 must be reauthorized before the sunset date of July 1,
2031
Continued work beyond ESB 5032
| © 2021 Perkins Coie LLP
QUESTIONS?
34
• Janice Zahn, Assistant Director of Engineering Port of Seattle
(206) 787-3798
[email protected]
• Scott Middleton, General Counsel & Government Affairs
Director MCA of Western Washington (206) 442-9029
[email protected]
Contact Information
OMWBE: DIVERSITY & INCLUSION IN SCHOOL DISTRICT CONSTRUCTION
33RD ANNUAL SCHOOL CONSTRUCTION WORKSHOP
OCTOBER 29, 2021
Statutory Framework: Overview
The legislature finds that minority and women-owned businesses are
significantly underrepresented and have been denied equitable
competitive opportunities in contracting. It is the intent of this
chapter to mitigate societal discrimination and other factors in
participating in public works and in providing goods and services
and to delineate a policy that an increased level of participation
by minority and women-owned and controlled businesses is desirable
at all levels of state government.
| © 2021 Perkins Coie LLP
RCW 39.04 RCW 39.19
| © 2021 Perkins Coie LLP
39
• “. . . agency procedures and guidelines shall include a plan to
ensure that minority and women-owned firms and veteran-owned firms
are afforded the maximum practicable opportunity to compete for and
obtain public contracts for services.”
• “The level of participation by minority and women-owned firms and
veteran-owned firms shall be consistent with their general
availability within the professional communities involved.”
Statutory Framework: Architects
40
• CPBARB members must be knowledgeable about best practices
concerning public contracting for minority, women, and
veteran-owned businesses and small businesses
• One CPARB member must be from OMWBE • CPARB must reflect the
gender, racial, ethnic, and
geographic diversity of the state, including the interests of
persons with disabilities
• PRC must include at least one member representing the interests
of disadvantaged business enterprises
| © 2021 Perkins Coie LLP
• Evaluative factors must include proposer’s past performance in
utilization of disadvantaged businesses and the inclusion plan for
small business entities and disadvantaged business enterprises as
subconsultants, subcontractors, and suppliers for the
project.
• Bid packages must be prepared to reduce barriers for and increase
participation by disadvantaged business enterprises.
| © 2021 Perkins Coie LLP
• Evaluation factors must include past performance in utilization
of disadvantaged business enterprises.
• Evaluation factors must include proposer’s inclusion plan for
small business entities and disadvantaged business enterprises as
subconsultants, subcontractors, and suppliers for the project
• Contracts must require the design-builder to submit inclusion
plans and track and report to the public body and OMWBE utilization
of certified businesses and veteran certified businesses.
| © 2021 Perkins Coie LLP
2021 School District Construction Seminar
Who we are – OMWBE Established in 1983, OMWBE was created to
mitigate societal discrimination and other barriers to minority-
and women-owned businesses participating in public works and
providing goods and services.
“…. minority and women-owned businesses are significantly
underrepresented and have been denied equitable competitive
opportunities in contracting”
Certification
Governor’s Subcabinet on Business Diversity
• Best practices, tools, guides, templates, and more available on
our website.
• Additional releases over the next year, plus training offerings
on all topics
• OMWBE will monitor progress of agencies in using these tools and
best practices, and measure statewide M/WBE participation
Tools for Equity in Public Spending
Share information about OMWBE and Veteran Business certifications,
and small business registration in WEBS.
Familiarize yourself with OMWBE’s directory of certified businesses
and reach out to OMWBE to schedule an in-depth training.
Send OMWBE areas you see gaps in the directory of certified
businesses and partner to conduct targeted outreach to fill those
gaps.
Sign up for OMWBE’s monthly supplier diversity emails to learn
about newly certified businesses and get the latest news on
training opportunities and best practices.
Invite OMWBE to review your solicitations and provide feedback as
part of the evaluation process.
Forecast future spending, to allow time for planning outreach
strategies, conducting pre- bid conferences, and lengthening
solicitation timelines.
Evaluate contract sizes and scopes and consider unbundling.
Review boilerplate contract language for barriers, especially
focusing on experience, insurance, and bonding requirements.
Increase small and diverse business access to information by
conducting robust outreach.
Require inclusion plans that outline commitments a contractor,
vendor, or consultant will make towards your agency's goals of
increasing participation by historically underutilized
businesses.
Why our work matters • Supports all facets of the economy and helps
“diversify” our
economic investments, contributing to resiliency and recovery •
Promotes competition, innovation, and better-quality service
delivery
for the government • Small businesses make up a large part of our
economy and over 51% of
jobs, supporting success, prosperity, and resiliency of our
communities and families
• Government contracts can provide stable, predictable work and
help M/WBEs weather economic changes and grow their
businesses
Timolin Abrom, Assistant Director of Supplier Diversity
[email protected], 360-280-3121
Tools for Equity in Public Spending bit.ly/2X7hEWr
Questions / Contact us
33RD ANNUAL SCHOOL CONSTRUCTION WORKSHOP
OCTOBER 29, 2021 | PRESENTED BY: ANDREW GREENE JON GODDARD
| © 2021 Perkins Coie LLP64
Agenda
• What are the current COVID-19 requirements applicable to school
construction in Washington?
• How have these rules changed over time?
• What do the recently enacted rules require?
• Key issues to consider.
Timeline
• March 13, 2020: Statewide school closures • March 23, 2020: “Stay
Home, Stay Healthy” Order
issued, effective March 25, 2020 • March 25, 2020: “Construction
Guidance” issued • May 4, 2020: “Safe Start Washington” for phased
re-
opening commences • May 15, 2020: Additional guidance issued
for
construction in “Phase 2” • April 21, 2021: Updated guidance issued
for
construction • Today: April 2021 guidance still applies
| © 2021 Perkins Coie LLP67
• COVID-19 Site Supervisor
• COVID-19 Safety Training
April 21, 2021 Guidance Changes
• Activities for which social distancing may not be maintained is
authorized to resume
• Aligned quarantine requirements for out-of-state workers with CDC
guidance
Source:
https://www.portseattle.org/sites/default/files/2021-04/COVID19-Construction-
Guidance_20210421.pdf
https://www.portseattle.org/sites/default/files/2021-04/COVID19-Construction-Guidance_20210421.pdf
Highlights: • Contractor develop a COVID-19 mitigation plan •
General obligation to keep safe site • Educate and following
L&I requirements • Designate a COVID-19 site supervisor •
Provide COVID-19 safety training • Physical distancing • PPE,
sanitation, and cleanliness • Employee health/symptom
self-assessment Source:
https://www.portseattle.org/sites/default/files/2021-
04/COVID19-Construction-Guidance_20210421.pdf
Highlights: • Maintain face coverings • Separate employees with
possible or confirmed
cases • Provide written notice of any potential exposure • Report
outbreaks of 10+ employees • Protect high-risk employees Sources:
https://www.governor.wa.gov/issues/issues/covid-19-
resources/covid-19-reopening-guidance
https://lni.wa.gov/forms-publications/F414-164- 000.pdf
https://lni.wa.gov/forms-publications/F417-291- 000.pdf
the Secretary of Heath’s current guidance on facial coverings
• Fully vaccinated employees, if: - Working alone or in a location
inaccessible to the
public - No volunteers, visitors, or non-employees nearby
• Otherwise, maintain facial covering and physical distance
Sources: https://www.governor.wa.gov/issues/issues/covid-19-
resources/covid-19-reopening-guidance
https://www.governor.wa.gov/sites/default/files/COVID
19%20Facial%20Coverings%20Guidance.pdf
75
Vaccine Requirement (Proclamation 21-14.1)
• Prohibits “a Worker to engage in work . . . After October 18,
2021 if the Worker has not been fully vaccinated against COVID-19
and provided proof thereof as required”
• “On-site contractors are not Workers if they do not work in
places where students or persons receiving services are
present.”
• May “elect to require the employer of a contractor who is subject
to this Order to assume responsibility for the vaccination
verification and accommodations requirements in this Order.”
• “Contractor” includes subcontractors and other tiers.
| © 2021 Perkins Coie LLP76
See FAQs: https://www.governor.wa.gov/VaccineMandateFAQ
SEPARATED VS. NON-SEPARATED
33RD ANNUAL SCHOOL CONSTRUCTION WORKSHOP
OCTOBER 29, 2021 | PRESENTED BY: GRAEHM WALLACE MICHELLE
MALEY
| © 2021 Perkins Coie LLP
• 2019 Updates: A133 for GC/CM
• June 2021: Old A133 retired; including the A201
AIA Updates: Two Waves
| © 2021 Perkins Coie LLP80
• Highest-grossing film: Pirates of the Caribbean: At World’s
End
• Top-rated TV show: American Idol
• Super Bowl: Colts defeat Bears, 29-17
• World Series: Red Sox sweep Rockies
• Atlanta Braves: 84-78 (88-73 this year)
• Houston Astros: 73-89, not yet cheaters
Throwback alert! What happened in 2007?
| © 2021 Perkins Coie LLP81
| © 2021 Perkins Coie LLP82
AIA Documents
History: Standard form documents since 1888 Interpretive case law
(AIA Legal Citator) Evolved to reflect practices in the
construction industry Nearly 200 agreements and forms Revision
drafting process / industry commentary
| © 2021 Perkins Coie LLP85
A201-2017: Primary Changes
1. Technology • AIA 201 § 1.6 – Permits notice, but not notice of
Claims, via
electronic transmission
2. Sustainability • Revisions contained in underlying agreements
(e.g., A101 / A133)
3. Insurance and Bonds (Article 11) • Most language removed; new
“Exhibit A, Insurance and Bonds”
4. BIM Protocols • Identifies protocols for the use of, and
reliance on, BIM (§ 1.8)
| © 2021 Perkins Coie LLP86
5. Electronic Documents • Clarifies that the Contractor may
maintain Contract Documents and
other Project records at the site in electronic format (§
3.11)
6. Direct Communications • Allows for more direct communication
between the Owner and
Contractor while maintaining the Architect’s ability to keep
apprised of communications (§ 4.2.4)
7. Termination Fee • Allowing for the establishment of a
“termination fee” in the event the
Owner terminates the Contractor for convenience (§ 14.4.3)
A201-2017: More Changes
A201-2017: Other Changes
§ 6 – Work by Other Contractors • § 6.2.2 – “Contractor shall not
be responsible for discrepancies or defects in the
construction or operations by the Owner or Separate Contractor that
are not apparent.”
§ 9 – Payment Process • § 9.6.8 – So long as Owner has made
payment, Contractor must indemnify Owner for
lien and Subcontractor claims
§ 11.1.4 – Notice of Cancellation or Expiration of Insurance •
Contractor must provide Owner with notice of an impending or actual
cancellation or
expiration of coverage. Owner has the right to stop the Work until
lapse cured – unless lapse caused by Owner
| © 2021 Perkins Coie LLP88
Supervision • AIA 201 § 3.3.1 (Contractor to propose alternative
means/methods if unsafe instruction)
Construction Schedules • AIA 201 § 3.10.1 (a few more details
required)
Design Responsibility • AIA 201 § 3.12.10 (Contractor entitled to
rely upon performance criteria provided)
Minor Changes in the Work • AIA 201 § 7.4 (waiver if Contractor
performs Work without notice of costs)
Decisions to Withhold Payment Certification • AIA 201 § 9.5.2
(either party may submit a Claim if they disagree with a
certification)
| © 2021 Perkins Coie LLP89
THE A133: 2009 - 2019
| © 2021 Perkins Coie LLP91
A133: Owner-Construction Management Agreement
| © 2021 Perkins Coie LLP92
• Winner of the Bachelor: Melissa Rycroft Molly Malaney
• Latest fashion trend: Velvet track suits
• Cringiest moment: Kanye West interrupts Taylor Swift’s VMA
acceptance speech
• Actual cringiest moment: Flash mobs
• World Series: The Red Sox would win the World Series in four
short years
Throwin’ it back again: What happened in 2009?
| © 2021 Perkins Coie LLP93
• Permits Owner to contract with Contractor before design is
completed
• Role: • GC/CM is engaged in project planning
• Services: • Preconstruction: cost estimating, value engineering,
feedback
on constructability and scheduling
• For consistency:
• Reflects changes to make the A133 consistent with the A201, as
amended in 2017.
• Keeping up with the times:
• Burgeoning prominence of GC/CM work
• Incorporates feedback from architects, construction manages,
owners, and professional consultants.
| © 2021 Perkins Coie LLP96
• Greater flexibility to define scope of preconstruction services •
§ 3.1.14 – Parties can describe “any other Preconstruction Phase
services to be
provided by the Construction Manager.”
• § § 3.1.3.3, 3.1.6.3 – GC/CM has greater advisory role in
deciding whether to establish BIM or other protocols and
collaborating with the Architect.
• Insurance obligations • Mirror those of the project
Architect.
| © 2021 Perkins Coie LLP99
A133-2019: Construction Phase Commencement
• Greater flexibility to permit early start of construction work •
E.g., ordering long-lead items, demolition, site work
• § 3.3.1.2 – “The Construction Phase shall commence upon the
Owner’s execution of the Guaranteed Maximum Price Amendment or,
prior to acceptance of the Guaranteed Maximum Price proposal, by
written agreement of the parties. The written agreement shall set
forth a description of the Work,” etc.
| © 2021 Perkins Coie LLP
• Greater flexibility to define Substantial Completion • Exhibit A
– provides fill-ins for Substantial Completion of certain phases of
the Project
• § A.2.3.3 – liquidated damages may be applicable to different
phases of the Work
| © 2021 Perkins Coie LLP
THANK YOU!
CONTRACTOR REQUESTS FOR TIME AND MONEY (INCLUDING FOR COVID-19!) IN
A PANDEMIC INFLUENCED MARKET
33RD ANNUAL SCHOOL CONSTRUCTION WORKSHOP
OCTOBER 29, 2021 | PRESENTED BY: GRAEHM WALLACE GEOFF
PALACHUK
| © 2021 Perkins Coie LLP
• What is the current environment doing to construction?
• What do the contracts say?
• How can we navigate those issues?
- What the courts have said / might say
- Project-specific scenarios
• Questions & Answers
DELAY, DELAY, DELAY
• Supply chain issues • Labor shortages • Material price increases
• Loss of productivity • Changing legislation • Vaccine mandates •
Permitting agencies
Causes of Most Delays
| © 2021 Perkins Coie LLP
Every Contract is Different
• What is underlying the delay?
§ 8.3.1 If the Contractor is delayed at any time in the
commencement or progress of the Work by … labor disputes, fire,
unusual delay in deliveries, unavoidable casualties, adverse
weather conditions documented in accordance with Section 15.1.6.2,
or other causes beyond the Contractor’s control … and the Architect
determines, justify delay, then the Contract Time shall be extended
for such reasonable time as the Architect may determine.
• Right (entitlement) to assert a claim? Was it properly
asserted?
§ 8.3.2 Claims relating to time shall be made in accordance with
applicable provisions of Article 15.
Relevant Contract Language
Contractor Delays
Revised Contract Language
• Our Supreme Court requires strict compliance with these claims
provisions
• Mike M. Johnson (2003); Realm v. City of Olympia (2012); NOVA v.
City of Olympia (2018)
• Recent $12M+ claim dismissal in King County at summary
judgment
Revised Contract Language
DELAYS RESULTING IN EXTRA TIME OR MONEY (OR BOTH)*
1. Inexcusable Delay – (a) caused by an event within the
Contractor’s or its Subcontractors’ control; (b) beyond the Owner’s
control; and (c) may entitle the Owner to damages.
2. Excusable Delay – (a) caused by an event beyond the control of
the Contractor or its Subcontractors; and (b) may entitle the
Contractor to an extension of time only.
Delays Resulting in Extra Time / Money
116
| © 2021 Perkins Coie LLP
Delays Resulting in Extra Time / Money
3. Compensable Delay – (a) caused by an event within the Owner’s
control; (b) beyond the control of the Contractor; (c) may entitle
the Contractor to additional time and compensation.
4. Concurrent Delay – (a) caused by two or more “concurrent” events
above; and (b) should be treated as an “excusable delay” for which
Contractor and affected Subcontractor(s) are entitled additional
contract time only.
*Bruner & O’Connor, Construction Law § 15:29, Delay
(2021)
117
Downstream Delays
Because the contractor normally (1) imposes the use of its own
subcontract form, (2) selects its subcontractors and suppliers, (3)
decides whether or not to require them to post surety bonds to
assure their subcontract performance, (4) coordinates their work
and material deliveries, (5) can pursue legal recourse against them
for indemnity or contribution with respect to its own liability for
owner and third-party delay claims and (6) can pursue them for its
own damages for breach of their subcontracts, the contractor
normally is charged with the ‘inexcusable’ delay of any and all of
its subcontractors and suppliers.
• See Bruner & O’Connor, Construction Law § 15:32, Delay
(2021); see also S. Leo Harmonay, Inc. v. Binks Mfg. Co., 597, F.
Supp. 1014, 1027 (S.D.N.Y. 1984), aff’d 762 F.2d 990 (2d Cir. 1985)
(contractor controls coordination of subs within its bid); Graham
v. United States, 231 U.S. 474 (1913) (contractor responsible for
delivery of late materials); Caddell Constr. Co., Inc. v. United
States, 78 Fed. Cl. 406 (2007) (contractor and steel fabricator on
the hook for delays and issues related to shop drawings and
RFIs).
118
Other Potential Areas of Claims Upstream
• Increased Material Costs* - Lumber & Plywood (+56.8%) -
Copper & Brass Mill Shapes (+49%) - Steel Pipe and Tube (+49%)
- Metal Bar, Joists, Rebar (+38%) - Aluminum / Structural Steel
(+33%) - Plastic Construction Products (+26%) - Sheet Metal (+24%)
- Gypsum Products (Drywall) (+22%)
*U.S. Bureau of Labor Statistics, Last 12 Months (Sept. 2021)
119
• Material Shortages & Bottlenecks - Longer than anticipated
lead times - Raw material shortages - Increased global costs and
bottlenecks
• China, South America, Africa • Requires supply-chain
restructuring
- Cost escalation and material delays - Transportation
closures
• Labor Shortages - Sick-outs - Mandatory quarantines - “Adjusting”
to vaccine mandates
120
Delay Claims vs. Disruption Claims
• A delay extends the planned duration of a project, and a delay
claim seeks added contract time due to the delayed period of
performance. The contractor may also seek to recover added costs
incurred due to the prolonged period of performance, but its
entitlement to compensation is dependent upon whether the delay is
compensable or not.
• Disruption claims seek compensation for damages suffered as the
result of impacts to productivity, which made the contractor’s work
more difficult or less efficient to perform. Disruption or
inefficiency can occur even if the project was completed on time if
the disruption reduced the contractor’s planned or expected
productivity.
121
| © 2021 Perkins Coie LLP
123
WHAT DO THE COURTS SAY? (*SPOILER ALERT: NOT MUCH YET*)
| © 2021 Perkins Coie LLP
The Courts Say What?
“To prevail on its claim for equitable adjustment(s), plaintiff
must demonstrate first that any increased costs arose from
conditions differing materially from those indicated in the bid
documents, and that such conditions were reasonably unforeseeable
in the light of all the information available to the contractor [at
the time of bidding]. Plaintiff must also show that its contract
costs actually increased, and that the cost increases were the
direct and necessary result of the change.”
Sterling Millwrights v. United States, 26 Cl. Ct. 49, 72 (1992)
(citations omitted).
125
The Courts Say What?
• Willamette Crushing Co. v. State, 188 Ariz. 79, 932 P.2d 1350
(Ariz. Ct. App. 1997)
- Contractor [Wildish] was awarded a highway construction project
to be completed within 360 days. After being awarded the contract,
Wildish decided it could not meet the staging or milestone
deadlines and sought a revised schedule. The State refused, and
Wildish eventually adopted its own staging and milestone plan, met
the same deadline, but incurred cost overruns of $3M.
- State rejected the claim for $3M, and Wildish sued. The trial
court granted summary judgment and dismissed the claim. Wildish
appealed. The Arizona Court of Appeals affirmed dismissal.
- Wildish argued the increased costs arose from conditions that
“differed materially” from the bid documents, and that the changes
were “unforeseeable,” sufficient to prohibit any contractor from
being able to complete the job within in the required time.
126
The Courts Say What?
• “Performance specifications [rather than design specifications]
set forth an objective and allow the contractor to determine how to
achieve it.” Id. at 81. - Owner’s implied warranty under Spearin
only arises for design specifications:
• “[The] due date in a public contract is not a warranty by the
government; it is a warranty by the bidding contractor that, if
awarded the contract, it can do the work in the specified
time.”
• “[Contractor] was tightly circumscribed by the contract due date,
but the due date is not a design specification; it is a performance
specification…. How long it takes to perform a contract is a
function of the specification requirements and the contractor's
capabilities. The bidder knows or should know both before bidding,
but the government knows but one....”
• Id. at 83 (citing Am. Ship Building v. United States, 228 Ct. Cl.
220, 654 F.2d 75 (Ct. Cl. 1981)).
127
The Courts Say What?
• The court reasoned that contractors bear such sequencing risks
when bidding the project. Id. at 81.
- A contractor saying “it can’t be done” after bidding the job
usually won’t justify a delay claim or request for additional
compensation…
• Based on the current construction dilemmas, courts might be
willing to impute knowledge upon project bidders (e.g., current
market for lead times, supply chain bottlenecks, cost increases,
etc.).
- It is a more difficult question for those projects that bid
before supply chain issues arose.
128
The Courts Say What?
• Appeal of Ace Elec. Assoc., Inc., ASBCA Nos. 11781 & 11496,
67-2 B.C.A. (CCH) ¶ 6456 (July 18, 1967) - Contractor claimed
excusable delay caused by 1965 flu epidemic. Board of
Contractor
Appeals rejected the claim.
- Contractor asserted that flu caused a 30-40% rate of absenteeism
over several weeks.
- “Illness occasioned by the onset of a flu epidemic is in general
an excusable cause for delay provided it can be shown that
performance was in fact delayed by reason of such epidemic. It is
incumbent upon appellant to establish not only the existence of an
excusable cause for delay but also that such cause actually
contributed materially to such delay as well as the actual extent
of the delay so caused.”
129
The Courts Say What?
• Pernix Serka JV v. Dept. of State, CBCA 5683, 2020 WL 1970843
(C.B.C.A. Apr. 22, 2020) - Claim arising from Ebola outbreak in
Sierra Leone. Contractor was not entitled to any
additional compensation – only an extension of time.
- Contractor requested guidance from contracting officer regarding
whether it should evacuate the site following Ebola outbreak.
Contracting officer provided no guidance regarding the Ebola
outbreak, and the Contractor decided to temporarily
demobilize.
- Contractor later sought an equitable adjustment of time and
additional compensation. The request for compensation was denied by
the contracting officer, and the court agreed and granted the
State’s motion for summary judgment.
130
The Courts Say What?
• Pernix Serka JV v. Dept. of State, CBCA 5683, 2020 WL 1970843
(C.B.C.A. Apr. 22, 2020) - Court held the Contractor could receive
added time, but not additional costs, since
neither party contemplated an Ebola outbreak during the bidding /
negotiations.
- The Board found that “given the Excusable Delays clause,
[Contractor] has not identified any clause in the contract that
served to shift the risk to the Government for any costs incurred
due to an unforeseen epidemic.”
- “It is well-established that a contractor with a fixed price
contract assumes the risk of unexpected costs not attributable to
the Government. . . . and [a]bsent a special adjustment clause, a
contractor with a fixed price contract assumes the risk of
increased costs not attributable to the Government.”
131
The Courts Say What?
• “[Contractor’s] fixed-price contract obligated [it] to perform
and receive only the fixed price. ... A contractor is entitled to
additional time but not additional costs. Appellant’s attempts to
shift the risks clearly articulated by the contact are
unavailing.”
• “Particularly given the Excusable Delays clause, [Contractor] has
not identified any clause in the contract that served to shift the
risk to the Government for any costs incurred due to an unforeseen
epidemic. Nor does the contract require the Government to provide
[it] with direction on how to respond to the Ebola outbreak. Thus,
under a firm, fixed-price contract, [Contractor] must bear the
additional costs of contract performance, even if [it] did not
contemplate those measures at the time it submitted its proposal or
at contract award.”
This 2020 decision obviously parallels with the COVID-19
pandemic.
132
| © 2021 Perkins Coie LLP
Navigating Delays During Construction
• If the Contractor seeks additional time (not additional
compensation) due to industry-wide impacts or shortages…
- Then evaluate the claim, ask whether any better methods of claim
analysis might exist, and consider granting a time extension.
• If the Contractor seeks additional compensation and/or time
extensions based on project-specific disruptions…
- Then evaluate the backup documentation and consider best approach
to handle claim:
• Execute a change order / grant time extension? Challenge
entitlement? Execute a contractual amendment or rider (particularly
for cost escalation)? Rely on claims procedures of the contract?
Pursue mediation?
134
Navigating Delay Claims & Litigation
• If the Contractor’s request for additional time due to
industry-wide impacts or shortages, or for additional compensation
and time based on project-specific disruptions or impacts, does not
get resolved…
- Then (1) Challenge the Contractor’s claim methodology
• MCAA Factors? Measured Mile? Total Cost / MTC Claim? Critical
path analysis?
- Then (2) Rely on the Notice and Claims procedures of the Contract
and find other ways to challenge contractual entitlement.
- Then (3) Request and perform an audit of all backup related to
the claim.
- Then (4) If litigating, make sure to capture and address any
other lower-tier claims that might also exist alongside the claim
at issue.
135
IF [DECISION] DOESN’T GET RESOLVED, THEN [RESULT] (PART II)
136
Navigating Delay Claims & Litigation
• If the Contractor claims additional compensation as a
“constructive change” to the Contract, due to mask mandates, social
distancing mandates, vaccine mandates, or any other governmental
mandate… - Then Contractor must establish the existence of both (1)
a change (i.e., that its
performance requirements were altered), and (2) an order (i.e.,
that the added work was not volunteered, but resulted from the
direction of the Owner).
- Then Contractor must establish entitlement – that person
directing the change had contractual authority to unilaterally
alter the contractor's duties.
- Same defenses apply, based on prior slide.
| © 2021 Perkins Coie LLP
Slide Number 1
Slide Number 11
Lake Hills Investments, LLC v. Rushforth Construction Co.
PELLCO Construction, Inc. v. Cornerstone General Contractors,
Inc.
AGC of Washington, et. al., Appellants v. Jay Inslee, et. al.,
Respondents
Conway Construction Company v. City of Puyallup
Scarsella Brothers, Inc. v. Flatiron Constructors, Inc.
Serpanok Construction, LLC v. Point Ruston, LLC
Slide Number 18
Slide Number 19
GCCM-Related Changes
GCCM-Related Changes
GCCM-Related Changes
GCCM-Related Changes
GCCM-Related Changes
GCCM-Related Changes
Request for Proposal for JOC
Request for Proposal for JOC
RCW 39.10.460
Contact Information
OMWBE
Who we are – OMWBE
Tools for Equity in Public Spending
Strategies to make your contracts more accessible
Share information about OMWBE and Veteran Business certifications,
and small business registration in WEBS.
Familiarize yourself with OMWBE’s directory of certified businesses
and reach out to OMWBE to schedule an in-depth training.
Send OMWBE areas you see gaps in the directory of certified
businesses and partner to conduct targeted outreach to fill those
gaps.
Sign up for OMWBE’s monthly supplier diversity emails to learn
about newly certified businesses and get the latest news on
training opportunities and best practices.
Invite OMWBE to review your solicitations and provide feedback as
part of the evaluation process.
Forecast future spending, to allow time for planning outreach
strategies, conducting pre-bid conferences, and lengthening
solicitation timelines.
Evaluate contract sizes and scopes and consider unbundling.
Review boilerplate contract language for barriers, especially
focusing on experience, insurance, and bonding requirements.
Slide Number 57
Slide Number 58
April 21, 2021 Guidance Changes
Slide Number 69
L&I Requirements and Guidance
Updated Facial Covering Guidance
OSPI Guidance and Resources
Slide Number 77
Slide Number 78
Back to the Future: What happened in 2017?
Three Influences: 2007-2017
Fast-forward to 2019
Downstream Delays
Delay Claims vs. Disruption Claims
Slide Number 122
Slide Number 124