Power Design Fined $2.7 million – Those who use “independent contractors” to gain a bidding advantage just got a wake-up call. DC Attorney General Karl Racine said, “if you cheat workers out of wages and benefits they’ve earned, or commit payroll fraud to gain an unlawful edge, you will be held accountable. . .”. By the consent order, Power Design is required:
- to pay $879,056 in restitution that will be used to compensate electrical workers who did not receive minimum wage, were not paid overtime wages, or were denied paid sick leave,
- required to pay $1,820,944 to resolve hundreds of allegations of worker misclassification and other forms of wage theft,
- required to pay $50,000 to support programs that provide apprenticeships, job training, or workforce development opportunities to District residents and
- must implement new policies and procedures to ensure compliance with the District’s minimum wage, overtime, paid sick leave, and worker misclassification laws.
One member felt the company got off too easy. He stated, “Given the amount of work done by PDI over the past 12 years (probably close to $1 billion in the DC market), this settlement is a drop in the bucket.” Please reply with your comments and let me know if I can quote you.
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Member Responds to Bidding Each GC/Owner differently – Per Josie Geiger at BION – There is absolutely additional costs associated with working with different GCs and Owners. I think this is often overlooked in the bidding process. As examples:
- What level of paperwork does this GC require? Is it the norm or above average? Will you need additional dedicated staff members to handle this?
- How long do they take to negotiate changes on your behalf? How long do they take to pay your monthly requisitions? (translation-how long are you funding this project?)
- What type of billing and PM systems will they require you to use. What is the learning curve for these systems and what are the associated fees?
- Do they require morning stand-downs or other routines that you need to account for in labor dollars?
- Is it their habit to overload the job with an over-abundance of “project engineers”?
- Are their “Safety” requirements within the industry standards? Lacking or beyond stringent?
- How about their overall ability to keep a project moving?
- Do they facilitate coordination among the subs or are the subs left to their own on this?
All of this and more can rob your bottom line if you go into the bidding process without considering the added costs associated with certain GCs and Owners.
Maryland – Introduction of a bill is expected soon that will require payment of retainage on state work within 90 days. It is now 120 days. ASA and ACE representatives will have dinner with the members of the House Economic Activities committee and the Senate Finance Committee on Feb. 12th.
DC – A previously scheduled meeting with the Director of DOES is scheduled for Feb. 14th. Please reply to this email if you would like to attend to discuss First Source and CBE Requirements.
Virginia – SB 208 which voids “right of offset” clauses will be heard in a subcommittee of the Senate Judiciary Committee next week. A bill to clarify payment to subcontractors (SB 627) was introduced by Sen Vogel of Prince William County.
Welcome Fort Myer Construction – it is a pleasure to welcome Fort Myer Construction to our membership. This fine company brings a solid reputation to our list of the BEST Subcontractors working with the BEST General Contractors to achieve efficient projects in the DMV.
Smith Currie announces that Brian N. Krulick has joined the partnership in the firm’s Washington, DC office. Brian has served as Of Counsel in that office for the past several years, concentrating his practice in the areas of construction litigation and government contracts.