President Obama’s Fiscal Year 2017 Proposed Budget Includes Over $10 Billion for Federal Building Fund

President Obama’s Fiscal Year 2017 Proposed Budget Includes Over $10 Billion for Federal Building Fund

The U.S. General Services Administration (GSA) is the federal government’s real estate manager and director of the government’s real estate investment strategies. The Agency’s FY 2017 funding requests, submitted along with the President’s proposed budget in February, include requests for over $1 billion worth of construction projects in and around the Washington, D.C. area. In addition, GSA is requesting the following funds for infrastructure in Pennsylvania and the region at large:

1. Boyers, Pennsylvania: $31,200,000 for design and related services for the construction of a new federally owned facility of approximately 462,000 gross square feet to provide a long-term housing solution for agencies currently leasing an underground mine location within the area.

2. Philadelphia, Pennsylvania: $52,300,000 for Phase II of a two phase repair and alteration project for the Federal Building (Green Building), located in downtown Philadelphia. The project involves the realignment and reconfiguration of tenant space, and multiple building system upgrades/replacements.

3. Cleveland, Ohio: $15,524,000 for a repair and alteration project to complete, repair, and expand the plaza system at the U.S. Courthouse located in downtown Cleveland. The structural steel that supports the plaza is exposed to the elements and has been since the original construction.

(Here is a complete list of GSA’s proposed infrastructure projects in its FY2017 request.) These anticipated projects, coupled with rumors GSA has started the process of implementing much-needed upgrades to fedbizopps.com (the single government point-of-entry for federal government procurement opportunities), suggests the prospect of federal government projects may become more attractive to companies in the region within the year to come.

Although the appropriations bills ultimately passed by Congress this fall may or may not mirror these infrastructure plans, GSA’s proposal provides insight into its development priorities. We will track Congress’ final appropriations bills and continue providing updates on this blog.

A subcontract term that conflicts with the Miller Act is ineffective in a suit against the surety on the payment bond. But, that right may be waived.

A subcontract term that conflicts with the Miller Act is ineffective in a suit against the surety on the payment bond. But, that right may be waived.

In United States ex rel. Marenalley Constr., LLC v. Zurich American Ins. Co., et al, Civil Action No. 14-4581 (E.D. Pa. March 13, 2015), a subcontractor filed suit under the Miller Act to recover against the prime contractor’s payment bond for additional work performed at the VA Medical Center in Philadelphia, PA. The Miller Act provides a subcontractor the right to bring suit against the surety that issued the prime contractor’s payment bond if the subcontractor is not paid within ninety days of the completion of its work.

Prior to the commencement of the action, the prime contractor sought additional compensation from the VA in an administrative proceeding, which included the additional compensation sought by the Subcontractor. The VA had not approved payment for the additional work at the time the subcontractor filed suit. The prime contractor and its surety moved to dismiss, or in the alternative, to stay the action pending the outcome of the prime contractor’s claim against the VA.

The court denied the motion to dismiss, and held that the administrative procedure between the prime contractor and VA provides no direct remedy to a subcontractor for any claim it has against the prime contractor. The Court explained, “When a subcontractor and prime contractor have a dispute about the amount due the subcontractor, that dispute is not resolved in the [administrative] proceeding.”

Finally, the Court refused to grant a stay. Citing to non-Miller Act cases, the prime contractor and surety argued that the surety’s liability is “derivative” of the prime contractors and the prime contractor’s liability is being determined in the administrative proceeding.  The Court disagreed, and explained that the surety’s “liability on a Miller Act bond must be at least coextensive with the obligations imposed by the Miller Act if the bond is to have its intended effect.” As such, “a subcontract term that conflicts with the Miller Act is ineffective in a suit against the surety on the payment bond.” The practical takeaway from this case is the reminder the Miller Act permits a subcontractor to seek payment against the payment bond once the requisite ninety-day period has elapsed regardless of other administrative procedures that may be contractually required. Those Miller Act rights, however, may be waived, if: (1) the waiver is in writing; (2) signed by the person whose right is waived; and (3) executed after the person whose rights are waived has furnished labor or materials for use in the performance of the contract.

Federal Government Shutdown Having Limited Affect on Federal Highway Administration Construction, but Affecting Federal Contract Solicitation and Awards

Federal Government Shutdown Having Limited Affect on Federal Highway Administration Construction, but Affecting Federal Contract Solicitation and Awards

As the shutdown of the federal government enters its second week, its impact on federally funded construction projects has been somewhat muted because of the way that certain federal agencies receive their funding.  For example, because the Federal Highway Administration is funded by the Highway Trust Fund, which still has funding through the end of the 2014 fiscal year, the shutdown has virtually no impact on any Federal Highway Administration construction projects.  The Airport Improvement Program is also funded by a trust, and thus, the federal government shutdown will have much less of an impact on Airport Improvement Program construction projects.  Other agencies, including the Federal Transit Administration and the Federal Aviation Administration are not funded by a trust fund, and therefore, the government shutdown will have a much more significant impact on those agencies’ construction projects.

Overall, however, because funding has already been appropriated for most ongoing and already awarded direct federal construction projects, the federal government shutdown will have virtually no impact on ongoing and already awarded contracts.  Rather, the furloughs of non-essential government employees has suspended pending solicitations and awards, including task orders for existing multiple award contracts, until the shutdown comes to an end.

More information on the impact of the shutdown on federal construction contracts is available at the Association of General Contractors’ website.  The source of the information in this post is available here.

Federal Regulations Prohibit Texting While Driving on Federal Construction Projects

Federal Regulations Prohibit Texting While Driving on Federal Construction Projects

Although a lot has been made of the Ohio legislature’s recent decision to ban texting while driving in the Buckeye State, this ban, and Pennsylvania’s similar ban, should be nothing new to contractors and subcontractors working on federal construction projects.  In fact, since 2010 all contractors and subcontractors working on federal construction projects have been required to adopt and enforce a policy banning employees from texting whenever the employee is (1) driving a vehicle owned by the company; (2) driving a vehicle owned by the government; or (3) driving a privately owned vehicle when performing any work on behalf of the government.  See FAR 23.11 and FAR 52.223-18.

It is important to note that the term driving includes being behind the wheel of a running vehicle while stopped at a traffic light or stop sign, but not being behind the wheel of a vehicle that is pulled over on the side of the road way.  Additionally, term “texting” is broadly defined to include “texting, e-mailing, instant messaging, obtaining navigational information, or engaging in any other form of electronic data retrieval or electronic data communication” with a handheld or electronic device.   However, use of GPS navigation is expressly permitted provided that “the navigational device is secured in a commercially designed holder affixed to the vehicle” and “the destination and route [were] programmed into the device either before driving or while stopped in a location off the roadway where it is safe to park.”  Thus, checking a message at a red light, or using a cell-phone to navigate without placing that phone in a “commercially designed holder affixed to the vehicle” while operating a contractor owned vehicle constitute violations of the FARs.

The FAR also encourages federal contractors and subcontractors to conduct initiatives to establish rules and programs prohibiting texting while driving, and to educate employees about the safety risks associated with texting while driving.