New rules on WBE companies....please read carefully

New rule on women-owned small business contracting draws fire
By Elizabeth Newell enewell@govexec.com January 2, 2008

Advocates of women's business are vehemently criticizing a proposed Small Business Administration rule that would limit set-asides for on women-owned small businesses to four industries.

SBA was charged in 2000 with developing a women's procurement program to help agencies reach a goal of giving 5 percent of contracting dollars to women-owned small businesses. Since then, members of Congress and numerous advocacy groups have blasted the agency for delays in implementing the program, but SBA insists that the lengthy and ongoing regulatory process is necessary.

The proposed rule would allow contracting officers to award sole-source contracts of $3 million or less ($5 million in the manufacturing sector) to women-owned small businesses in underrepresented industries. SBA cited a RAND Corp. study in declaring that women are underrepresented in only four areas of government contracting: national security and international affairs; coating, engraving, heat treating and allied activities; household and institutional furniture and kitchen cabinet manufacturing; and other motor vehicle dealers.

Women Impacting Public Policy, an advocacy group in Washington, noted that there are more than 2,300 categories listed by the North American Industry Classification System, and WIPP President Barbara Kasoff called the proposed rule "a drastic step backwards in chipping away at the little progress that women made over the past seven years to gain a mere 5 percent of federal contracts."

"The Bush administration's proposed rule is a slap in the face to women business owners," said Sen. John Kerry, D-Mass., chairman of the Senate Small Business and Entrepreneurship Committee. "We've been trying for seven years to get the administration to end unfair contracting practices. By cherry-picking data, they've not only done nothing to level the playing field, they've actually shut women out of the process for thousands of different types of contracts."

Kerry said he will call on SBA to throw the proposed rule out at a hearing this month.

Defending the proposed rule, SBA spokesman Dennis Byrne said: "This set-aside is one tool to help achieve a goal and was never intended to be the end-all means to achieve the 5 percent mark. Understanding that, the set-aside can help an agency move closer to the goal."

But Margot Dorfman, chief executive officer of the U.S. Women's Chamber of Commerce in Washington, came out against the proposed rule. USWCC has long pushed for implementation of the women's procurement program, including filing suit with the U.S. District Court for the District of Columbia.

In November 2005, the court found that SBA had "sabotaged, whether intentional[ly] or not, the implementation of a procurement program which would have, and will, likely benefit the businesses they represent." The court ordered SBA to develop a plan for implementing the program, but status hearings have showed little progress.

USWCC "believes the recent filing of proposed rules by the SBA, which strips out the bulk of the findings and recommendations from the required national studies, is a continuation of the SBA's active sabotage of the women's contracting program," Dorfman said. "By dragging their feet for seven years and inappropriately narrowing the categories for underrepresentation, the SBA has become part of the problem -- instead of the designated national champion small business."

Arbitration In Kansas City Construction

Thanks to Kate Whitby of Spencer Fane Britt & Browne LLP regarding the following important subject.

Complete your negotiations and get it in writing!

The Missouri Court of Appeals recently refused to compel arbitration between a contractor and a subcontractor concerning construction work at 46th and Washington in Kansas City. The parties' written contract allowed arbitration of disputes only at the contractor's discretion. A dispute arose, and it turned out the subcontractor wanted to arbitrate. The parties' lawyers came to an agreement about the arbitrator to use, the dates and duration of the arbitration, documents to be exchanged, and the types of presentations that would be allowed at the arbitration. The subcontractor's lawyer sent the other side a letter outlining all the areas of agreement, but left one item potentially open: the scope of the award the arbitrator could issue, and whether that scope also was within the arbitrator's right to decide. The contractor's lawyer responded with an e-mail which said that he believed the letter correctly outlined "the type of arbitration we have agreed upon."

The lawyers apparently never reached closure on the "scope of arbitration" issue, but the subcontractor thought they had a sufficiently detailed agreement that this term could be filled in by the arbitrator. The contractor disagreed, and opposed the subcontractor's motion to compel arbitration.

The trial court denied arbitration and the appeals court agreed, finding that the lawyers' letter and e-mail had been nothing more than negotiations. The appellate court needed some confirmation or acknowledgement from the parties or their lawyers that the negotiations had finished and the parties had agreed to actually arbitrate a defined something. Absent such proof, the appeals court decided that the parties had never agreed to arbitrate at all.

Lesson to be learned? Complete your negotiations and get the agreement in writing!

Issues with destroying evidence in a construction lawsuit

What does this case mean? Missouri courts do not like it when folks destroy evidence....but stay tuned...the justices will not put up with this for long!

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Court declines to recognize cause of action for third-party intentional spoliation of evidence in Missouri, but sets forth the elements that would be required if such were recognized. Brian Fisher, Plaintiff/Appellant v. Bauer Corporation, Defendant, and Adzick Construction Co., LLC, Defendant/Respondent, No. 89432 (Mo. App. E.D., December 4, 2007), Crane, P.J.

 

While working on a construction site as a subcontractor, plaintiff fell from a ladder he borrowed from the general contractor. He filed suit against the general contractor and the manufacturer of the ladder for his injuries. Plaintiff's petition also included a claim against the general contractor, seeking damages for the general's alleged destruction or loss of the ladder, which plaintiff claimed was vital to his cause of action against the manufacturer of the ladder. General contractor filed a motion to dismiss, asserting that Missouri law does not recognize intentional or negligent spoliation of evidence as a separate tort claim. The trial court dismissed, and the plaintiff appealed.

Held

The appeals court noted that, in Brown v. Hamid, 856 S.W.2d 51 (Mo. banc 1993), the Missouri Supreme Court declined to recognize a new tort of intentional spoliation in Missouri. The court of appeals also noted that in the few jurisdictions which have recognized such a tort, the elements required in each of those jurisdictions are: (1) a pending or potential civil lawsuit; (2) knowledge on the part of the spoliator that the litigation is pending or probable; (3) intentional destruction of evidence; (4) intent of the spoliator to interfere with or disrupt or defeat the potential lawsuit; (5) a causal relationship between the act of spoliation and the inability to prove the elements of the lawsuit, and (6) damages.

In this case, plaintiff failed to plead that the destruction of the ladder was intentional; he merely pleaded that general contractor caused the ladder to be lost or destroyed with the intent to disrupt his claims. The court opined: This conclusory allegation is insufficient. . . . Plaintiff has not alleged sufficient facts from which the intentional destruction of evidence can be inferred. The failure to plead any one element is fatal. Because plaintiff has not alleged facts supporting each of the essential elements of a potential tort for third-party intentional spoliation, we do not reach the question of whether such a tort should be recognized in Missouri.

: Trial court's dismissal of "spoliation" tort affirmed.

When are construction contracts in Missouri void? When you do not sign them!

Local government contract that fails to comply with § 432.070, RSMo is void.  Orf Construction, Inc., Plaintiff/Respondent v. Black Jack Fire Protection District, Defendant/Appellant, No. 89502 (Mo. App., E. D., December 4, 2007), Shaw, J.

Black Jack's architect advertised for bids and approved Orf's proposal to construct a new fire house.  Orf began work pursuant to the architect's instruction.  Orf also obtained a change order, executed by Black Jack's fire chief. While the parties had exchanged a draft American Institute of Architects (“AIA”) agreement, it was never executed.  Black Jack subsequently dismissed Orf, who sued to compel arbitration per the AIA contract.  The trial court dismissed for failure to state a claim.

Held: Trial court's dismissal of contractor Orf's claims affirmed.

The appeals court noted that RSMo § 432.070 requires contracts with local government to “be in writing and dated when made, and shall be subscribed by the parties thereto, or their agents authorized by law and duly appointed and authorized in writing.” The trial court's evidentiary record contained nothing showing that Black Jack authorized the transaction or conferred on the fire chief the power to execute the underlying agreements.  Therefore, no valid contract existed and so the contract's arbitration clause was not enforceable.

More immigration legislation updates

We know that Arizona, Colorado and Oklahoma have enacted legislation and as I reported to you recently Kansas and Missouri is looking at laws aimed at dealing with the illegal alien issue.

Note Arizona’s law, which also would revoke the business licenses of employers that knowingly hire unauthorized workers, is currently being litigated on the grounds that it deprives employers of due process rights and oversteps state authority. Under an agreement reached at a Jan. 16 hearing, U.S. District Court Judge Neil V. Wake announced that there will be no prosecutions under the new law until March 1. He intends to issue a ruling by early February.

Also note with state incremental tax financing plans there is a movement afoot to require compliance with ALL applicable laws dealing with the immigration

Employee plans to deal with the demands of 2008

Ken Holland's recent article noted that there will be 10 MILLION MORE JOBS THAN EMPLOYEES in the economy this year. WHAT RECESSION?

My work effort for clients is to determine how to KEEP employees, not look for new ones for this year...employee benefit plans, incentive plans and ownership plans must be at the forefront of your investigations on behalf of your employees!

Immigration and construction law in Kansas and Missouri

Both state legislatures appear to be taking very aggressive stances on the immigration issues with Kansas submitting two different bills and Missouri four bills.  It is not just the fed.'s that are taking charge of this issue!

Going Green in KC

Kansas City appears to be reaching new levels of sustainability....go to this sight and see what is happening!

http://www.marc.org/environment/Smart_Growth/greenbuilding.htm

New construction csae involving insurance from the State of Florida may spell new direction for contractors

In J.S.U.B., Inc. v. United States Fire Insurance Co., 906 So. 2d 303 (Fla. 2d DCA 2005) the issue is whether a post-1986 standard form commercial general liability (CGL) policy with products-completed operations hazard coverage, issued to a general contractor, provides coverage when a claim is made against the contractor for damage to the completed project caused by a subcontractor’s defective work.
We answer this question in the affirmative. We conclude that defective work performed by a subcontractor that causes damage to the contractor’s completed project and is neither expected nor intended from the standpoint of the contractor can constitute “property damage” caused by an “occurrence” as those terms are defined in a standard form commercial general liability policy. Accordingly, a claim made against the contractor for damage to the completed project caused by a subcontractor’s defective work is covered under a post-1986 CGL policy unless a specific exclusion applies to bar coverage.

I would rethink pushing your insurance company on coverage matters..

Construction and the Energy Independence and Security Act of 2007

Note the new energy standards for commercial buildings:

Energy Efficiency in Buildings – Title IV
New standards for federal buildings include required improvements in existing buildings, green building standards for new buildings and a Zero Net Energy Initiative for all commercial buildings to average zero net energy by 2050. This section also includes incentives to promote industrial energy efficiency – through conversion of waste from industrial facilities, such as exhaust heat, into electricity – as well as increases in funding to assist consumers with weatherizing their homes and energy efficiency standards for manufactured housing.

Well kids.....start figuring out how to build to ZERO NET ENERGY!