Catagory:Articles and Publications

By: Josh M. Leavitt, John C. McIlwee, K&L Gates

For Presentation to Practising Law Institute Symposium
Building Better Construction Contracts: Tailoring Incentives, Creating Collaboration and Developing Effective Risk Allocation

Panel Discussion: Creating a Better Design/Build Agreement

April, 2011, New York City

Those attending this symposium no doubt are familiar with the touted benefits of the design build delivery method: (1) single point of responsibility to owner; (2) shortening certain project times; (3) fewer change orders and more cost-certainty; (4) fostering higher quality work-product; (5) reduced finger-pointing in the event of claims; and (6) minimizing certain owner’s risks.  While design build is widely used on suitable projects in the private sector, the story has been different in the public sector, particularly at the state level.

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Presented by K&L Gates Partners Timothy L. Pierce, Jason L. Richey, and Lawrence M. Prosen at the 25th Annual Construction SuperConference in San Francisco, CA on December 16, 2010, this presentation explores how typical construction claims on the same project may vary depending on venue of the project.

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By: Carleton O. Strouss, C. G. Bowman & George A. Bibikos, K&L Gates, Harrisburg

The United States Court of Appeals for the Third Circuit recently vacated a $1 million award to a contractor for extra work it performed on a moving services contract because the award would have exceeded the funding authorization of the project owner, Wayne Moving & Storage of New Jersey, Inc. v. The School District of Philadelphia. [1]  The case is a cautionary tale for contractors and subcontractors.  In it, a subcontractor asserted that it should be paid extra costs that exceeded the project funding authorization.  It asserted that representations by the government should estop it from being able to rely on the statutory defense that the funding was not authorized.  The Third Circuit concluded that the doctrine of equitable estoppel may be asserted against governmental entities in Pennsylvania.  However, in applying the doctrine to the case before it, the Third Circuit found that the contractor seeking compensation from the governmental entity had failed to meet the elements of an estoppel claim.  Therefore, it reversed the District Court which had granted the claim and vacated an award in excess of $1 million.

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Global Law firm K&L Gates LLP has earned more first-tier rankings than any other law firm in the inaugural edition of the U.S. News & World Report – Best Lawyers rankings of the “Best Law Firms,” available online at www.usnews.com/bestlawfirms and on newsstands in the coming weeks.  Based on surveys of Nearly 9,000 lawyers and more than 9,500 clients throughout the United States, including representatives of every Fortune 100 and more than half of Fortune 1000 companies, the report includes ranking of law firms in almost 40 practice areas and approximately 175 metropolitan and state areas.

Along with its first-tier rankings in surveyed metropolitan and state areas, K&L Gates was also recognized with national first-tier rankings in the Corporate Law, Securities/Capital Markets Law, Mutual Funds Law, Antitrust Law, Employment Law – Management, Private Funds/Hedge Funds Law, and Construction Law categories.

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By:  Larry Eiben, K&L Gates, Chicago

The State of Illinois is part of the nationwide trend to codify new construction standards for energy efficient buildings and sustainable development.  Illinois has adopted the Illinois Energy Conservation Code, which became effective January 29, 2010 and the Green Buildings Act, which became effective on July 24, 2009.  The goals of these laws are to reduce energy consumption, protect the environment, cut pollution and promote sustainable development. 

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By:  Josh M. Leavitt, K&L Gates, Chicago

Introduction

While there are those who debate whether green building is effective from an environmental impact point of view, no one seriously debates that it is big business.  One researcher reports green expenditures were approximately $10 billion in 2005 and between $36 billion and $49 billion in 2008.  Hupp, Recent Trend in Green Buildings Laws: Potential Preemption of Green Building and Whether Retrofitting Existing Buildings Will Reduce Greenhouse Gases and Save the Economy, The Urban Lawyer Vol. 41, No. 3 (Summer 2009).  Paul Primavera, Senior Vice President of the Lockton Companies predicts that “within the next three to five years certified green buildings will account for 25 percent of all new construction in the United States.  Green Buildings: New Construction Concepts and Risks, (Fall 2009) available at http://www.lockton.com/Insights-And-Publications/White-Papers

Certainly political forces and public awareness are at work, but there is no doubt that the green building explosion has been driven by the belief that it is profitable.  The work product of researchers and consultants projecting benefits from green building improvements, the sales representations of green building product manufacturers and public and private incentive programs have fed those expectations.  Project owners expect to receive specific and often quantifiable benefits from their investments, including energy savings, reduced overhead and maintenance, more tenant interest, increased lease income, and government incentives (such as tax credits, low-interest loans, density bonuses, zoning waivers, fast-track permitting, and reduced permit fees), and other financial incentives.  They also expect less quantifiable benefits such as energized work forces, general goodwill, and marketing benefits.

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Chicago Partner Gregory Andre, with the help of Associate Michael Roth, made a significant contribution to a recently published resource on construction law by co-authoring a lengthy chapter about negotiating construction contracts.  The chapter, aptly entitled “Negotiating Construction Contracts”, provides a detailed discussion of the topic and addresses a myriad of underlying issues, including information to be provided by the owner and the contractor, changes in the work and change orders, delay, claims disputes, default, and many others.

Available from the Illinois Institute of Continuing Legal Education, the 2010 edition of Construction Law: Transactional Considerations can be purchased by clicking here.
 

By Michael Schrier and Joel Rubinstein

The State of Maryland is cracking down on what it perceives to be a problem with construction or landscaping contractors and subcontractors misclassifying workers as “independent contractors” instead of as “employees.” Maryland’s new enforcement mechanisms have the potential to impose significant penalties for misclassification. As a result of these new enforcement schemes, all construction companies with workers located in Maryland and who are classified as “independent contractors” should carefully review such classifications for compliance with new statutory and enforcement regimes to make sure such workers have not been inadvertently misclassified.

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