The conference brought together women electricians, ironworkers, plumbers, and other craft workers from across North America.  650 union tradeswomen attending the annual “Women Building California and the Nation” conference earlier this month were urged to take a cue from top Facebook executive Sheryl Sandburg and “lean in” to become leaders at job sites, union halls and in their communities.

Since 2010, when the VA instituted its process to verify service-disabled, veteran-owned small businesses, we have received call after call from companies that have been denied verification. Denial, of course, can have a devastating effect. Without receiving verified status, a company cannot qualify for contracts set-aside by the VA for SDVOSB companies. Many times, when we receive these calls and then review the basis for denial, all we can do is shake our collective heads in disbelief. A simple phone call would have very likely paved the way to verified status. Instead, the company is stuck with attempting to fix the problem through the reconsideration process, which is uncertain and never quick, and must consider the distinct possibility that it will have to wait six (6) months from a final decision to reapply. This has raised the ire of many a veteran. Well, for those veterans who have advocated for change, help appears to be around the corner.

On Tuesday afternoon, Business Wire reported that on May 1, 2013, the VA will begin providing SDVOSB applicants the opportunity to correct “minor deficiencies” found in their documentation prior to a denial being issued. The idea is to add an element of common sense to the process and avoid denying applicants who really do deserve verification. The new process will work as follows:

Firms determined to have problematic issues that are easily corrected will be contacted by the Center for Veterans Enterprise and informed of CVE’s preliminary findings. The applicant will then have 48 hours to respond, indicating a willingness to correct the issues and provide revised documentation addressing the preliminary findings. As part of this new process, the applicant will be referred to verification-assistance counselors to enhance the probability that any deficiencies are overcome.

This is great news for our veterans and it is our understanding that other changes may be in the works. As we hear about what the VA intends to introduce, we will pass along that information to you.

The Federal Acquisition Regulatory Council (“FAR Council”) is expected to finalize as many as nine regulations in the upcoming year. One of the most interesting of the proposed rules would require prime contractors to accelerate payments to small business contractors.

FAR council issued notice of this proposed rule on December 19, 2012. The proposed rule is the latest step toward implementing policies put in motion by the July 2012 “M-12-16” memo, issued by Jeff Zients, the acting director of the Office of Management and Budget (“OMB”). In that memo, OMB asked agency heads to accelerate payments to small business contractors, by, inter alia, encouraging prime contractors to promptly pay their small-business subcontractors. Following issuance of the M-12-16 memo, several agencies issued directives instructing their Contracting Officers to begin inserting a new clause into all contracts – a clause which requires prime contractors, upon receipt of accelerated payments from the government, to pay small business subcontractors on an accelerated timetable to the maximum extent practicable.

The proposed rule would compel ALL agencies to include this new prompt-payment language into any new solicitations and resultant contracts. In its current form, the proposed clause (as set forth in the notice) provides no specific guidance concerning the definition of “accelerated.”

The sad fact of the matter is that the proposed rule does not provide subcontractors any new rights under the Prompt Payment Act, nor does it affect the application of the interest provisions of the Prompt Payment Act. Under current Prompt Payment Act provisions, interest begins to run when an agency does not pay a contractor an amount due “by the required payment date.” This new accelerated payment policy will not change the “required payment date” for purposes of calculating the interest penalty. Nonetheless, if it goes into effect, the proposed rule would at least provide small businesses with the ability to demand accelerated payment if the appropriate circumstances present themselves.

In today’s world, it is not at all uncommon for employees, or even owners of companies, to “telecommute” or “work remotely” from time to time. It’s one of the many great things that technological advancement has provided. In fact, many say that it’s too easy to stay connected to the office, making it impossible ever really get away. As I walk down Market Street in Philadelphia every day, I see person after person glued to their phone, checking messages and responding to email incessantly (present company included). In fact, I’m on a flight to Phoenix at this very moment writing this article, which I will email to my assistant and have posted for all of you to read. It’s incredibly easy to work from anywhere at any time. Until recently, however, the Veterans Administration did not subscribe to this theory. It interpreted its regulations to mean that a service-disabled veteran could not manage his or her business remotely. A few weeks ago, the Court of Federal Claims issued an opinion that changed all that. KWV, Inc. v. United States, No. 12-882C (2013) should provide much more flexibility to service-disabled veterans in our ever-changing world.

KWV involved a Rhode-Island based service-disabled veteran-owned business (“SDVOSB”) that was owned and managed by a Korean War veteran with more than thirty years of construction experience. KWV was awarded a contract set-aside for SDVOSBs by the VA, and drew an agency protest from a disgruntled competitor, Alares LLC (“Alares”). Alares challenged KWV’s SDVOSB status, arguing that the service-disabled veteran did not actually “control” the company within the meaning of 38 C.F.R. § 74.4 because he lived in Florida for part of the year. Alares claimed that the veteran’s sons, both of whom worked for the company in Rhode Island, actually controlled the company.

The VA’s Office of Small and Disadvantaged Business Utilization (“OSDBU”) agreed with Alares; it found that, because the service-disabled veteran resided in Florida for a portion of the year, he could not maintain sufficient control over the day-to-day management of KWV. The OSDBU therefore held that KWV was ineligible for the contract, and revoked KWV’s SDVOSB status, rendering it unable to bid on future SDVOSB set-aside contracts issued by the VA. KWV then appealed this decision to the United States Court of Federal Claims, seeking injunctive relief, and got it.

The Court found that the service-disabled veteran’s decision to live in Florida for part of the year did not preclude him from “controlling” KWV within the meaning of 38 C.F.R. § 74.4. Judge Lettow (the same judge that presided over the Miles case, a case that we won on behalf of an SDVOSB, and wrote about last month) stressed that the veteran “employs various electronic means to keep track of the day-to-day business of KWV,” which was revealed during the proceeding. The court concluded that this was an acceptable means of controlling KWV’s operations, per the requirements of 38 C.F.R. § 74.4.

Based upon this finding, the Court issued a preliminary injunction, setting aside the VA’s decision to sustain the protest. The Court also ordered the VA to restore KWV’s SDVOSB eligibility.

This case represents a very important development for SDVOSB owners. The VA must now recognize that “control” under 38 C.F.R. § 74.4 is not dependent upon an owner’s physical presence at an office or site. Rather, service-disabled veterans can remotely manage the day-to-day affairs of their SDVOSBs, provided that they fulfill the other prerequisites regarding “control.” This is great news for SDVOSB owners, who, like many of us, must manage our affairs far from afar sometimes…even at 37,000 feet.

Technology can be both a blessing and a curse. It can allow you to work from pretty much anywhere, but, as we all know, there are certain places where you should simply avoid using the technology available to you, such as when you are behind the wheel. The hazards of texting while driving has become a major problem and, as a result, it’s been rendered illegal in many states. Based upon recent changes to the FAR, now the federal government is getting into the act.

Pursuant to FAR Subpart 23.11 (incorporated into every government contract through clause 52.223-18) a government contractor should adopt and enforce a policy banning employees from texting whenever an employee is: (1) driving a vehicle owned or rented by the company; (2) driving a vehicle owned by the government; or (3) driving a privately owned vehicle when performing any work on behalf of the government. Moreover, contractors are required to “flow down” this anti-texting clause to all of its subcontractors, if the value of the subcontract exceeds the “micro-purchase threshold” (currently $3,000).

More importantly, 52.223-18 requires federal contractors to “conduct initiatives” to educate employees about the dangers of texting while driving; these initiatives should be “commensurate with the size of the business.” If you are a large government contractor, this likely means that the government will expect some sort of training in addition to a written policy or employee handout covering this topic. If you are conducting periodic ethics training (and you should be), you can likely incorporate any necessary training on anti-texting as part of those sessions. If you do not conduct periodic ethics, and other government contracting, training to refresh yourself regarding what the government requires of its contractors, you should certainly consider doing so. If you have any questions, please feel free to contact us.

Last week the U.S. Supreme Court announced that it will review an important Circuit Court case, which focuses on the enforceability of forum selection clauses.  These contract clauses identify where parties must litigate claims in the event of a dispute.  Contractors, especially federal contractors who perform work for the Government across the country and throughout the world, should, and most often do, include these clauses in their subcontract agreements.

Forum selection clauses can give a prime contractor a “home court” advantage if litigation should become necessary.  Contractors, when forced to litigate, generally prefer to litigate where they are primarily situated for a variety of reasons, almost all of which pertain to cost.  By litigating in a court near its home base, a prime contractor can likely save on travel costs for key personnel, have its case tried in a court familiar to its legal counsel and make an adversary come to it, escalating the costs incurred for that company.  It’s a huge advantage.  Further, for companies that conduct business over a broad geographic area, forum selection clauses provide more certainty.  It allows them to anticipate costs better by avoiding litigation in multiple venues.

As evidenced by a recent decision of the U.S. Court of Appeals for the Fifth Circuit, however, forum selection clauses may not always be as iron-clad as they appear, and in some circumstances, may be ignored entirely.  In In re: Atlantic Marine Construction Company, Inc., despite clear language in a subcontract that identified a specific federal court in Virginia to resolve disputes, the Fifth Circuit ruled that a plaintiff subcontractor could file suit in Texas, where the project and witnesses are located, as the forum selection clause represented but one factor to consider when determining whether the contractually specified forum could be enforced.  This decision follows decisions in several other Circuit Courts, but remains the minority position among the Circuits.  The majority of the U.S. Circuit Courts will enforce forum selection clauses, unless there is fraud or the chosen forum is unreasonable.  The U.S. Supreme Court’s review of the Atlantic Marine decision will likely resolve the current split among the Circuits.

The Fifth Circuit did, however, suggest ways in which a contractor could draft a forum selection clause to improve its likelihood of being enforced, including identifying only specific state courts or arbitration tribunals, as opposed to federal courts, as appropriate forums.  The wisdom of the Fifth Circuit’s decision will be scrutinized by the Supreme Court, which will hopefully provide some clarity to this increasingly cloudy issue.

As you can imagine, forum selection clauses, and the ability to enforce them, have important legal and business consequences.  Contractors that have a national and/or international platform should include well thought-out and effective forum selection clauses in their subcontracts to give themselves the best chance of securing that home court advantage.  You should certainly consult with a legal professional on how best to achieve this result, especially considering Atlantic Marine.  We will keep you updated on this interesting and important case.

The question of whether to submit a Request for an Equitable Adjustment, commonly referred to as an “REA,” or a claim, is one that clients ask on a frequent basis. It is not always an easy question to answer and our advice depends upon the history of the dispute, and the nature of the relationship with the Contracting Officer and his, or her, representatives. At the outset, however, it is necessary to clear up the confusion between the terms “REA” and “Claim.”

A claim is defined in FAR § 2.101 as “a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract. However, a written demand or written assertion by the contractor seeking the payment of money exceeding $100,000 is not a claim under the Contract Disputes Act of 1978 until certified as required by the Act.” Although the term “equitable adjustment” appears in the FAR in 111 places, and the term “request for equitable adjustment” appears in 11 places, there is no official definition, in the FAR or anywhere else, of the terms “Request for Equitable Adjustment” or “REA.” Nevertheless, an REA is commonly understood to be a request for compensation (time, money, or both) that falls short of a claim in terms of its procedural requirements.

A “Claim” must be certified pursuant to FAR § 33.207(c) when the claim amount exceeds $100,000, and it must be submitted to the Contracting Officer in a manner that clearly provides the factual, technical, and legal basis for an equitable adjustment to the contract. Whether the claim exceeds $100,000 or not, the best practice is to identify the request as a claim under the Contract Disputes Act of 1978, 41 U.S.C. 601-613, together with a request for a Contracting Officer’s Decision. Those procedural steps will assure that the clock starts running on the 60 day time limit for the issuance of a decision (or longer under some circumstances), and it further assures that interest starts to run from the date the claim was submitted. An REA does not require a certification under the Contract Disputes Act, but REAs submitted to Department of Defense agencies require the certification found in DFARS 252.243-7002.

There are a number of clauses that allow an equitable adjustment to the contract if the government is responsible for additional costs, or time, and the most significant clauses are: Variation in Estimated Quantity, FAR 52.211-18, Differing Site Conditions, FAR 52.236-2, Suspension of Work, FAR 52.242-14, Changes – Fixed-Price, FAR 52.243-1, and Termination for Convenience, FAR 52.249-2. In general terms, an equitable adjustment means that the contractor is entitled to his actual costs, plus reasonable profit (except for suspensions), overhead, and bond. It is also important to note that the additional costs must be allowable, allocable, and reasonable.

With that brief background, there are some practical considerations about whether to file an REA or a claim. If the contractor has a good working relationship with the agency, and particularly with the government personnel assigned to the project at hand, an REA is usually the best way to begin. This is particularly true when the government has indicated flexibility on the issue and a willingness to reach an amicable resolution. On the other hand, if there is animosity, or a clear indication in prior discussions and correspondence, that the government does not believe that the contractor is entitled to an equitable adjustment, it is best to file a claim. Unlike an REA, a claim starts the clock ticking on the time when the Contacting Officer must issue a decision (there is no time limit on an REA), and interest begins to run. It should be noted, however, that in cases where there is doubt, there is no harm in starting out with an REA. If progress is not made within a reasonable time, an REA can easily be converted to a claim under the Contract Disputes Act.

It’s not all that surprising when contractors question the Department of Veterans Affairs’ authority, especially those who are denied SDVOSB verification.  It’s a little surprising, however, when members of Congress do it.  Late last month, two congressmen explicitly challenged the VA’s management structure, which could have an impact on how the verification process operates in the future.

On March 28, 2013, Reps. Richard Hanna (R-N.Y.) and Mike Coffman (R-Colo.) penned a letter to VA Secretary Eric Shinseki, arguing that the VA had violated the Small Business Act by allowing the director of the department’s Office of Small and Disadvantaged Business Utilization (OSDBU), Tom Leney, to also serve as director of the VA’s Center for Veteran’s Affairs (“CVE”).  In theory, the CVE and the OSDBU are meant to carry out very different functions within the VA.  The CVE is charged with the verification of SDVOSB entities – a responsibility delegated to the CVE by the Secretary of the VA under 38 U.S.C. 8127.  In that role it is supposed to serve as an “auditor” for the agency; its job is to police the verification process.  The OSDBU, on the other hand, is meant to serve as an advocate for SDVOSB entities, facilitating their participation in the program.  In their letter, the Congressmen explained that Section 15(k) of the Small Business Act, which created the position of OSDBU for every federal agency, specifically requires that the director of the OSDBU “carry out exclusively the duties enumerated in this Act, and shall, while the Director, not hold any other title, position, or responsibility, except as necessary to carry out responsibilities under [Section 15].”  Given this definition, the Congressmen opined that Mr. Leney’s service as both the director of the OSBDU and head of the CVE presented a problem.  As they coined it, the dual role constitutes an “inherent conflict,” given “the advocacy role assigned to the OSDBU and the auditing function now associated with CVE.”

This is not the first time this issue has been raised.  On March 19, 2013, Mr. Leney was questioned about his dual role during a joint subcommittee meeting.  At that hearing, Mr. Leney testified that he did not feel that he was in a position of conflict.  His explanation: “I personally do not have any issue with a conflict of interest because we are helping vets.”  Apparently, members of the legislature were not convinced.  Congressmen Hanna (the chairman of the Small Business Committee’s Contracting and Workforce Subcommittee) and Coffman (the chairman of the Veterans’ Affairs Committee’s Oversight and Investigations Subcommittee) were certainly not swayed.  In their subsequent letter, they specifically directed VA Secretary Shinseki to document how the department intends to achieve compliance with the Small Business Act.  Implicit in such a direction, of course, is the idea that the current structure is not compliant and, therefore, illegal.

To date, VA officials have not commented on the letter, but it is generally assumed that the VA will have to formally respond at some point soon.

The VA does appear to have a problem here and the problem is not going away.  When two subcommittee chairmen send a letter to follow up on an issue raised during hearing, they are expecting an answer.  Whatever the response, the real issue for SDVOSBs, and prospective SDVOSBs, is what does it all mean for them?  I hope it means that the VA uses this as an opportunity to address some of the administrative issues at CVE that have generated so much frustration amongst veterans.  While most veterans understand and appreciate the need to “police” the verification system, I have heard way too many stories from veterans who feel victimized by that system.  We will keep our eye on this one as it could result in a real shake-up at the VA.

Carpenters are exposed to risk every day they work. Accidents could cause injuries or damage to property that could lead to substantial financial loss. Without carpenter insurance, these accidents could quickly overwhelm a business with financial liabilities.  Protect your business with carpenter insurance.

Depending on whether you own your own box truck and carry your own goods or you’re a for-hire trucker, you may require different types of box truck insurance coverage options. If you’re a private carrier, you may need to purchase basic box truck insurance coverages like Liability insurance that can cover injuries or damage to people or property if you’re at fault in an accident. You may also want physical damage coverage that protects your vehicle if it is damaged in an accident.

If you’re a for-hire trucker and your primary liability insurance is provided by your motor carrier, you may only need to purchase certain types of box truck insurance coverages including motor truck cargo insurance to protect the goods you are hauling or non-trucking liability insurance to protect your truck when you are not under dispatch.

All though there are many types of business that haul goods that require box truck or straight truck insurance, the most common types of businesses that require box truck insurance include:

Couriers
Expeditors
Retail operations
Household goods movers

If you are a motor carrier, then you operate under your own authority. Motor carriers normally need some type of financial responsibility filing along with commercial truck insurance.

Construction on the University of Houston’s new football stadium is now underway. Design firms PageSoutherlandPage and DLR Group, as well as contractor Manhattan Construction and university staffers celebrated the project’s groundbreaking February 8 near downtown Houston.

As more colleges and universities have made campus sustainability a priority, so has sustainability become part of their curriculums.   Students at Williams College in Williamstown, Mass., have spent the month of April “doing it in the dark.”

Studying, that is, or hanging out with friends or anything else they do in their dormitories — just with most of the lights dimmed and with electronics turned off and things like phone chargers unplugged, all in an effort to save energy.

The City of Minneapolis is the latest municipality to require commercial building energy rating and disclosure, meaning building owners must benchmark energy performance against that of similar buildings and report the results to the public.

Want to have a say in whether the U.S. government continues to use LEED? The U.S. General Services Administration (GSA) is seeking public comments on a long-awaited recommendation regarding green building rating systems. GSA may abandon its prior endorsement of a single rating system, the findings of a special ad hoc committee suggest, instead encouraging each federal agency to make its own decisions about whether to use LEED, Green Globes, or the Living Building Challenge.

Every state in the U.S. committed to adopting building energy codes in order to receive money through the 2009 American Recovery and Reinvestment Act (ARRA), but halfway through the time allowed for compliance, many states still do not meet the requirements.

The Granite Furniture building, which dates to 1910, is transformed into a mixed-use business anchor for a Salt Lake City neighborhood.

Historic station is being renovated to house a boutique hotel, restaurants, retail and transit services.  Crawford says hotel rooms on the mezzanine level will be small and efficient, inspired by old Pullman train cars. Rooms on the gallery floor will feature high ceilings and windows.

The NYC mayor names a number of projects begun under his administration that are nearing completion and sets new goals for the year ahead.

One of two docks has been removed on Liberty Island but major infrastructure repairs lie ahead, the National Park Service says.

New Jersey’s Montclair State University adds a powerplant. A college campus is supposed to be a place where students can lose themselves in thought, ensconced in an academic bubble as they stroll to and from class. But at New Jersey’s Montclair State University, those reveries were threatened with disruption starting last summer by a $92-million project to upgrade an aging power and thermal plant that involved digging a large and deep trench through the heart of the campus.

The city’s high-end residential market dominates the top 25 biggest projects to break ground last year.

Related and Oxford are joining forces to create New York City’s largest private development since Rockefeller Center.  Opinions may differ on where the heart of New York is, but two developers have set out to make a 26-acre site on Manhattan’s West Side a serious contender for the title. The developers, Related Cos. and Oxford Properties Group, have big plans for Hudson Yards, a $15-billion, mixed-use development that will be built on a platform over the Metropolitan Transportation Authority’s (MTA) Eastern and Western rail yards. The project, which will span 10 to 12 years, is the largest undeveloped property in Manhattan and the largest private development in New York City since Rockefeller Center.

For hospitals, restoring power and other operations after the storm was just their first problem. Now they must come up with a plan to avoid such devastation if another such crisis strikes again.