Friday, February 13, 2015

Frank Cara Wins 2014 Mentor Award from Port Authority

New York, New York - December 5, 2014 - Frank Cara, a partner at Connell Foley LLP and Co-Chair of the firm’s New York Construction Law Practice, recently earned the “2014 Mentor Award” from the Port Authority of New York and New Jersey as part of the Authority’s Mentor-Protégé Program.  Cara was recognized for his commitment to the program and the education and guidance he has provided to a number of “protégés” since 2011.
The Mentor-Protégé Program was formed in 2002 to help increase the number of Port Authority-certified Minority and Woman-Owned Business Enterprises (MWBEs) qualified to bid on large construction contracts with public and private organizations.  According to the Port Authority’s website, “The program seeks to improve the protégés' management, organization and construction skills by teaching them new strategic tools to speed the growth of their businesses.”
Mentors in the program advise protégés on a range of issues, from project planning to estimating, bidding and project closeout, as well as other important general and trade contracting information. Protégés are expected to incorporate this new knowledge into their business practices, making tactical and tangible changes in their approach and operations.

Cara was recognized for his efforts and was presented with the Mentor Award at a luncheon held on December 4, 2014.

Thursday, October 30, 2014

WHAT KEEPS YOU UP AT NIGHT?

We have all been there: woken up in the middle of the night in a panic about a claim, statute of limitations or notice issue. Or worried that certain people in the company are not following your advice, which will only create havoc down the road.

To help you sleep better, I am in the process of putting together a series of programs that will address many of the corporate and litigation issues I encountered during my time as general counsel at a national construction firm. The focus of the programs will be risk management and litigation avoidance. I would love to hear your concerns/worries and incorporate them into the programs.

So, please tell me, “what keeps you up at night?” 

Thursday, October 16, 2014

New York State Sets the Highest M/WBE Goals in the Country at 30 Percent

On October 1, 2014, Governor Andrew M. Cuomo announced that his Administration is dramatically increasing its state contracting utilization goal for minority- and women-owned enterprises to 30 percent. The press release announcing this increase can be viewed here: http://www.governor.ny.gov/press/10114-mwbe-contracting

Interestingly, the current increase in the state contracting utilization goal is not based upon an updated disparity study. The last study was performed in 2010; based upon that study, the goal was set at 10%. Since 2010, the goal has tripled to 30% without the support of an updated disparity study. Can this be an election year?

This new goal will place increasing pressure on contractors to develop compliant minority participation plans and I would not be surprised if there is increased scrutiny of those plans.

If you need assistance in developing a minority plan, a compliance program, or navigating M/W/DBE matters, feel free to contact Connell Foley’s New York Construction Law Group for guidance on this or any other construction related issue.

Thursday, August 28, 2014

New Executive Order Requires Federal Contractors to Disclose Labor Law Violations

On July 31, President Obama issued an executive order imposing new mandates on federal contractors.  The Fair Pay and Safe Workplaces Executive Order helps federal agencies “identify and work with contractors with track records of compliance” with labor laws in order to “reduce execution delays and avoid distractions and complications that arise from contracting with contractors with track records of noncompliance.”  It imposes new obligations on federal contractors.

Starting in 2016 for all federal contracts over $500,000, the executive order mandates the disclosure of all labor law violations for the past three years.  Prime contractors must disclose any administrative merits determinations, arbitral awards or decisions, or civil judgment rendered against the company for violations of any of 14 federal statutes and executive orders, as well as “equivalent” state laws.  Post-award, contractors must update the disclosures every six months.  Contracting agencies must consider the disclosures in determining whether the contractor is a “responsible source” and whether further action is needed.  Further action could include additional remedial measures, compliance assistance, declining to exercise an option on a contract, contract termination, suspension, or debarment.  The executive order goes even further and requires contractors to impose similar requirements on all subcontracts over $500,000.

If you have any questions about this executive order or any other legal issues regarding your business feel free to contact Connell Foley’s New York Construction Law Group for guidance on this or any other construction related issue.

Friday, July 25, 2014

Just when you thought you were out...They pull you back in.

Just when you thought you were in the clear and the U.S. Attorney was out of time to bring a false claims action against you, the Supreme Court of the United States may issue a decision that will keep you up at night.

On July 1, 2014, in Kellogg Brown & Root Services, Inc., et al. v. United States ex. rel. Carter, the Supreme Court decided that it will look at the applicability of the Wartime Suspension of Limitations Act (WSLA) to the statute of limitations applicable to False Claims Act (FCA) litigation.

By way of background, an action was brought against Kellogg Brown & Root Services, Inc., alleging that the company had fraudulently billed the United States for services provided to the U.S. military in Iraq in 2005. The court initially dismissed the complaint as being beyond the FCA’s statute of limitations. That decision was reversed on appeal. The Circuit Court found that the WSLA tolls the statute of limitations for “any offense” involving fraud against the federal government “[w]hen the United States is at war.” 18 U.S.C. § 3287. The court also held that the Act “does not require a formal declaration of war,” reasoning that such a requirement “would be an unduly formalistic approach that ignores the realities of today[.]” The United States had not formally declared war since World War II. Given the current military conflicts like Afghanistan and Iraq, as well as past military operations such as Operation Desert Shield in 1990 and Desert Storm in 1991, this decision effectively repeals the statute of limitations for civil fraud claims and authorizes an indefinite tolling of FCA claims pursuant to the WSLA. I wait with trepidation to see how the Supreme Court will handle this issue.

If you ever find yourself facing a false claim action or are unsure of your legal footing, feel free to contact Connell Foley’s New York Construction Law Group for guidance on this or any other construction-related issue.

Thursday, June 19, 2014

It's Déjà Vu All Over Again – Joint Bidding is Back

On June 9 Assembly Speaker Sheldon Silver submitted a bill that would permit joint bidding for utility interference work. What does this mean for you – no more independent negotiations with the utility companies. The utility interference work will be included in your bid price and the project will be awarded to the lowest responsible bidder. Given that the type and extent of interferences that will be encountered is inexact and difficult to accurately estimate, it unclear to me how the City of New York intends to structure the bid documents. It would make sense to me for the bids to be based upon a multiplier of a unit price, but we shall see.

For those of you old enough to remember, in 1993 the City experimented with a joint bidding process. Back then, the City consulted with the relevant utility companies to identify the interferences and then incorporate those interferences into the project specifications of the contract. The bid documents solicited separate bids for the City work and the utility interference work, the “non-City” work. The contract was then awarded to the contractor who submitted the lowest aggregate bid. However, the Court of Appeals, the highest court in the State of New York, concluded that this bid structure violated the public bidding rules, as it was possible that the contractor with the lowest bid for the City work would not be awarded the project, if his bid for the non-City work was too high. It is also possible that a contractor with a higher bid for the City work to be awarded the contract, where its bid for the non-City work was lower, making its aggregate bid the lowest. Thus, “Section U” was born.  Section U eliminated aggregate bidding but required the contractor to perform the utility interference work.

Now, in the last days of this legislative session, Speaker Silver in response to the lobbying efforts of the utility companies, submitted this bill for a return to joint bidding. All indications are that this bill will pass. We will keep you posted on the passage of the bill and the structure of the bids to see if they conform to the public bidding rules. Only time will tell. I am sure this will be a hot topic in the coming months.

If you ever find yourself unsure of your legal footing feel free to contact Connell Foley’s New York Construction Law Group for guidance on this or any other construction related issue.

Wednesday, May 14, 2014

The New Normal: False Claims

We are all too familiar with the false claim actions that result in criminal and civil penalties and potential disbarment. In the last month alone, a Connecticut construction company paid a $2.4 Million dollar fine, a Chicago based company settled the claims against it for $12 Million, a New York based company forfeited $55 Million in a plea deal with the District Attorney’s Office and finally the US Attorney for the Southern District of New York commenced an action against another contractor for allegedly using a “pass through” to meet its DBE requirements on a contract.

The heightened scrutiny of our industry has raised some interesting questions when it comes to even mundane day to day practices. One that I want to touch upon today, is when there is “wiggle room” on your price for an additional work order to allow for negotiating movement. Can that situation result in a false claim? You know you are going to end up at the negotiation table to get “beat up” on your number for the work. Have you ever just given a quote and the owner accepted it? I don’t think so.

There are many variables in determining the price for a proposal. It is not an exact science. Delays, impacts, weather, labor efficiency, and material cost fluctuations all play a role.  Some helpful hints for staying out of trouble: (i) document everything (ii) have detailed backup as to how the price, overhead and profit was calculated including labor, material, insurance, difficulties expected to be encountered, overall impact costs to the project, etc.; (iii) document everything; (iv) maintain all correspondence; (v) document everything; (vi) be truthful, do not inflate the numbers; always (vii) document everything; and finally (vii) negotiate in good faith.  

If you ever find yourself facing a false claim or unsure of your legal footing, feel free to contact Connell Foley’s New York Construction Law Group for guidance on this or any other construction related issues.