Ike's Thoughts March 20, 2020 Print

Executive Director's Report

Coronavirus Statement – Brian Wood with Smith Currie held a Webinar yesterday where he explained what subcontractors can do now to protect their companies.  The presentation is available on the ASA National Website or we will email it to you upon request.  Here is a rider for FUTURE subcontracts he provided to address COVID-19 or similar epidemics. Please note that interpretation and enforcement of this provision will depend upon the applicable jurisdiction. 

Epidemic Rider
Notwithstanding any provision(s) of this Subcontract, if as a direct or indirect result of any virus, disease, or contagion, including but not limited to COVID-19 (individually or collectively, “Epidemic”), Subcontractor’s work is delayed, disrupted, suspended, or otherwise impacted, including, but not limited to, by (1) disruptions to material and/or equipment supply; (2) illness of Subcontractor’s workforce and/or unavailability of labor; (3) government quarantines, shelter-in-place orders, closures, or other mandates, restrictions, and/or directives; (4) Owner or Contractor restrictions and/or directives; and/or (5) fulfillment of Subcontractor’s contractual or legal health and safety obligations associated with an Epidemic; then Subcontractor shall be entitled to an equitable adjustment to the Subcontract schedule and duration to account for such disruptions, suspensions, and impacts. To the extent any of the causes identified herein results in an increase in the price of labor, materials, or equipment used in the performance of this Subcontract, or other costs of performance of the Subcontract, Subcontractor shall be entitled to an equitable adjustment to the Subcontract price for such increases, provided Subcontractor presents documentation of such increases (including the original prices and/or estimates) and evidence of Subcontractor’s reasonable efforts to find alternative sources of material or equipment supply and/or labor at the original/non-impacted prices and/or estimates.

Other Pandemic Resources  We developed a Coronavirus statement that includes suggestions from K&L Gates on addressing the current crisis.  A concise explanation of your requirements under the new emergency leave bill is available by request.  Just reply to this email. And member, Lerch, Early & Brewer is holding an HR Webinarat 11 am today that covers the issues raised by the Corona Virus Response Act that the President is expected to sign. 

What Does Fair Payment For Subcontractors Include? In Virginia, a State Senator introduced legislation making condition precedent language in subcontracts unenforceable.  This Senator was encouraged to introduce this legislation because one of her constituents explained how difficult it is for a subcontractor to get paid promptly.  This subcontractor worked directly for owners before his business changed and he was forced to work as a subcontractor.  He could not believe how long he had to wait for payment.  Most reasonable people are astonished that subcontractors have to wait for payment so long after they have incurred considerable expense for labor, material, tools, equipment and overhead.  But what is fair for GCs?  Should they be on the hook for payment to you if they do not receive your payment from the owner?  Dialogue needs to continue on payment to subs.  Is a law the only recourse?  How do we get owners, banks and GCs to understand that payment cannot be unfairly withheld?

Panel Addresses The Future  On March 3rd a panel of young people from ASAMW and NAWIC discussed the ramifications of the 2017 study of construction by the McKinsey Institute.A paper that describes the take-aways from this panel is available on the Website

Although Design-Build was a highly recommended process during these discussions, there are some considerations described in this article from Construction Dive.

General Contractor Partners Technology Event will be rescheduled –The event scheduled for yesterday in which our GC Partners would display current technology that they think will improve your operations will be rescheduled after this crisis subsides.  

Mid-Atlantic Construction Safety Conference will be rescheduled –  Click here for more information.  Your safety director cannot afford to miss this.

The Spring Golf Tournament is a go as of today.  We will change the way we handle meals and awards, but what better way to spend a Friday than playing golf with your friends and competitors.  If we have to postpone it, we will make sure you are happy with the new date or your fees will be refunded.  Whiskey Creek in Ijamsville has been the venue for this session for several years because it offers a beautiful setting for fun and golf.  Please register today to play if you have not been in contact with anyone with the coronavirus.  Click here for the  CDC Risk Assessment Click here for information on how to register and/or sponsor.  

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Advocacy Issues

Maryland – HB 763, which was introduced by Delegates Adams, Chisholm, Hornberger, and Krebs, will require payment of retainage on state work within 90 days.  No votes were taken before the legislature ended because of the Coronavirus. Current plans are to reconvene in May.  

HB 747 will get GCs paid in 15 days. It appears to be stalled for this session.

DC – No action since last report.  Meeting on First Source with DOES Director is planned for April 9th, but will likely be postponed.  There has been no action on other legislation we have been following.        

Virginia –  SB 208 (no “right of offset”) passed both houses of the Virginia legislature and awaits Governor Northam’s signature.  A subcontract clause in Virginia that states the GC can withhold payment on one job because of a dispute on a separate job (often listed as “right of offset”) will be void as against public policy.  No condition precedent legislation will be heard next session.   

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Member Updates

Welcome New Member – Atlantic Hardware Supply is the newest supplier we welcome to the family of the BEST suppliers and subcontractors in the DMV.  Atlantic is holding an event on June 11th in Hyattsville.  Click here for more information.

Shapiro & Duncan, Inc. was one of 13 construction subcontracting firms to earn the American Subcontractors Association’s Certificate of Excellence in Ethics. The awards were presented on March 7 during a ceremony in Las Vegas in conjunction with ASA’s annual national convention.

ASAMW Professional CPA Member, CBM, has a good article on the tax deductibility of food and beverage expenses. Click here to read the article.  

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