By: Edward T. DeLisle & Maria L. Panichelli

Many contractors know that there is a six-year statute of limitations on claims brought under the Contract Disputes Act (“CDA”) and Section 33.206 of the Federal Acquisition Regulations (“FAR”). However, most contractors incorrectly assume that for claims pertaining to delay, or acceleration, the six-year statutory period begins to run only upon project completion or at some point in close proximity to completion, when the contractor is able to more accurately quantify its loss. This assumption is incorrect and can have severe consequences: once the limitations period expires, a claim is forever waived. As such, it is critically important to accurately assess the time at which the six year limitations period begins to run.

Pursuant to the CDA and the FAR, a claim must be submitted to the Contracting Officer within six years of the date upon which that claim “accrues.” Accrual occurs when all events that fix liability are known, or should be known, by the contractor. For liability to be fixed, an injury, or some type of impact or harm, must have occurred. However, monetary damages need not have been incurred, or do not have to be known, for accrual of a claim to take place (See FAR § 33.201). As such, events that result in delay, or acceleration, are likely to occur well before project completion, especially on large, complex projects and, even though the extent of the harm may not be known at that time, a “claim” has been born. To most contractors, this is rather counterintuitive — it seems almost nonsensical to require a contractor to pursue, or even certify, a claim before a project is complete and the full range of excess costs are known. While this might be true, courts and agency review boards regularly rule against contractors who wait too long to assert a claim and attempt to make such an argument. (E.g. In Re Robinson Quality Constructors, ASBCA No. 55784, 09-1 B.C.A. (CCH) ¶ 34048 (Jan. 6, 2009)).

Contractors have attempted to argue that the six-year limitations period should be “equitably tolled” based on government misconduct. Equitable tolling essentially means that the limitations period stops running based upon issues of fairness. Historically, these arguments have been premised on the notion that the clock should stop ticking if a litigant can establish: (1) that he had been pursing his rights diligently; and (2) that some extraordinary circumstance stood in his way that was not his fault. (E.g. Arctic Slope Native Association, Ltd. v. Sebelius, 583 F.3d 785, 798 (Fed Cir. 2009); Menominee Indian Tribe of Wisconsin v. United States, 2012 WL 192815 (D.D.C. 2012)). However, in a recent opinion, the United States Court of Appeals for the Federal Circuit held that 28 U.S.C. § 2501 (the statutory provision defining the CDA’s limitations period) creates an absolute bar of any claim submitted beyond 6 years, if that claim is pursued in the United States Court of Federal Claims (“CFC”), thereby eliminating the equitable tolling argument in that forum. FloorPro, Inc. v. United States, 2012 WL 1948997 (May 31, 2012). While other opinions suggest that the CDA’s statute of limitations might, nonetheless, be subject to equitable tolling if the contractor’s claim is pursed before an agency or board of contract appeals (see, e.g. Arctic Slope, supra), the CFC is often viewed as a more favorable forum. Therefore, contractors should, if at all possible, avoid triggering the limitations bar, which would preclude adjudication of their claim before the CFC. This can only be accomplished if the contractor acts promptly and accurately determines when liability was “fixed.”

Accurately assessing when a party’s liability becomes “fixed” in relation to a claim can involve a complicated analysis, and is very fact specific. Accordingly, contractors should track any increased costs as they are incurred, and seek professional advice as soon as it appears that there is a basis for a claim, regardless of when the project may attain completion.

By: Edward T. DeLisle & Maria L. Panichelli

SDVOSB Appeal of Rush-Link One Joint Venture, SBA No. VET-228 (2012), a recent Small Business Administration Office of Hearings and Appeals (“OHA”) decision that we discussed previously, demonstrates how a company’s internal corporate structure can impact that company’s eligibility to participate in the Service-Disabled Veteran Owned (“SDVO”) small business program.

SDVOSB Appeal of Rush-Link One concerned a joint-venture, Rush-Link One, which was 51%-owned by Link Contracting, Inc. (Link), a purported SDVO small business concern. Mr. George Carpenter, a service-disabled veteran, owned 55% of Link. Following the award of a SDVOSB set-aside contract to Rush-Link One, a competitor challenged the joint-venture’s eligibility for the SDVO program.

Pursuant to 13 C.F.R. § 125.10(a), a small business concern may qualify as an eligible SDVO only if the management and daily business operations of that concern are “controlled” by one or more service-disabled veterans. The regulations define “control” differently, depending upon the type of corporate structure employed. In the case of a partnership, one or more service-disabled veterans must serve as general partners, with control over all partnership decisions. 13 C.F.R. § 125.10(c). A limited liability company (LLC) is “controlled” by a service-disabled veteran only if one or more service-disabled veterans serve as managing members, with control over all decisions of the LLC. 13 C.F.R. § 125.10(d). In the case of a corporation, such as Link, the service-disabled veteran must prove that he or she has “control” over the corporation’s Board of Directors, thereby allowing him or her to make all major decisions on the company’s behalf. 13 C.F.R. § 125.10(e). Service-disabled veterans control the Board of Directors when either: (1) one or more service-disabled veterans own at least 51% of all voting stock of the concern, are on the Board of Directors and have the percentage of voting stock necessary to overcome any super majority voting requirements; or (2) service-disabled veterans comprise the majority of voting directors through actual numbers or, where permitted by state law, through weighted voting. 13 C.F.R. § 125.10(e).

Applying the above in Rush-Link One, the OHA concluded that the supermajority requirements in Link’s shareholders’ agreement abrogated the service-disabled veteran owner’s “control” of the corporation under 13 C.F.R. § 125.10, and rendered the concern and, therefore, the joint-venture, ineligible for participation in the SDVOSB program. The OHA found that, although Link was 55% owned by a service-disabled veteran, its shareholders executed a formal shareholders’ agreement which stated that “[e]xcept as otherwise provided herein or in [Link’s] bylaws, all decisions of the Shareholders shall be made by a majority vote. “Majority vote” was defined as one in which “seventy percent (70%) of the issued shares of the Corporation vote to pass the issue or matter.” The same paragraph of the shareholders’ agreement indicated that “[t]his provision shall supersede any contrary provision of [Link’s] bylaws or Articles of Incorporation (as they stand now or may subsequently be amended).” Accordingly, the OHA found that Mr. Carpenter’s 55% ownership of Link was insufficient to overcome the supermajority requirement set forth in the shareholders’ agreement, and, consequently, that he did not “control” Link’s board of directors or Link as a whole. Therefore, OHA concluded that Link was not a SDVOSB, and that Rush-Link one was not an eligible SDVOSB joint-venture.

Let this case serve as a reminder that internal corporate governance is critically important to SDVOSB eligibility. In our practice, it represents the single, most frequently cited basis for the loss or denial of SDVOSB status.

By: Edward T. DeLisle

If a government agency terminates a construction contractor for default, it cannot then sit on its hands. The agency must re-procure and complete that project within some reasonable amount of time. Failure to do so may result in the dismissal of any subsequent claim for excess costs to reprocure and finish the work. That was one of the very important messages delivered by the Court of Federal Claims last month in M.E.S., Inc. and Traveler’s Casulty & Surety Company of America v. The United States.

In September of 1998, the United States Postal Service (USPS) retained MES to build a new postal facility for it at a cost of $3,954,000. Prior to completion of the work, the USPS terminated plaintiff for failure to timely perform. The contractor disputed the termination, taking the position that defective plans and specifications prevented timely performance. While the parties attempted to amicably resolve their differences, their efforts failed, requiring the USPS to reprocure. The termination was issued on June 2, 1999.

The USPS did not reprocure until April 26, 2004, almost five years later. When questioned about the reason why it took so long to reprocure, the Contracting Officer for the USPS merely stated that there was “no reason” for the delay. In the meantime, the costs of completion escalated due to site deterioration, changes in the applicable construction codes and postal department standards, as well as certain “betterments” that the USPS desired upon reflection five years later. While, as part of its excess cost calculation, the agency’s experts attempted to eliminate certain costs that could not have reasonably been assessed to the defaulted contractor, the Court determined that the undue delay in reprocurement eliminated the USPS’s ability to demand any excess costs. Those costs were initially identified as $803,909 and later adjusted to $727,707.

In her opinion, the judge specifically stated that “a claim for excess reprocurement costs must be dismissed where an agency unreasonably delayed reprocurement and if that delay resulted in higher costs or otherwise prejudiced the contractor.” All of these elements were present in MES. Moreover, the USPS made no attempt to explain the basis for the delay, or rebut evidence provided by the contractor that the delay was unreasonable. For these reasons, the court threw out the government’s claim.

If anyone is interested in how not to properly terminate and then complete a project, I encourage you to read this opinion. As the court made a number of interesting rulings, stay tuned for more on MES.

Handyman — Moving from a small urban area to a large city in California can present a world of opportunities, but with those opportunities come the potential of higher auto insurance rates. In most heavily populated areas, the streets are congested with more motorists, automobile accidents are more common, and the level of car-related crime is considerably higher than in suburban locations. All of these details and statistics are used by insurers to rate vehicle owners, and the common characteristics of big cities frequently translate into higher coverage costs.

In the Golden State, there are unique auto insurance nondiscrimination laws that prohibit insurers from raising rates in small geographic locations while setting more reasonable rates in the surrounding area. However, location can still have a considerable impact on how much a resident pays for vehicle coverage. Companies are permitted to consider past loss experience and expenses in their rating process, which includes geographic areas that are at least 20 square miles. In areas that see greater economic loss as a result of greater population density or accident frequency, providers are permitted to charge more for car insurance.

​Red Bluff vs. Los Angeles: A Case Study

For example of how moving to a big city could affect rates, look at information pooled from the CA automobile premium survey. Regulator-provided premium data show that for a single male motorist with 9 to 15 years of driving experience, an annual mileage between 7,600 and 10,000, and no violations or accidents, the average price for standard coverage for a Honda Accord is roughly $1,400 for someone living in Red Bluff, which is located in rural Tehama County in Northern California. If the same driver were to live in the Wilshire/La Brea area of urban Los Angeles in Southern California, however, the average premium increases to over $2,400—a 71 percent jump.

The difference between Red Bluff and the Wilshire/La Brea is significant. Information provided by state and federal records ranks Red Bluff 332nd highest population in the state with just over 14,000 people as of January 2012. According to the latest census data, it has about 1,800 people per square mile. The Wilshire/La Brea area, however, is in the county with the highest population in CA (nearly 4 million people) and rests near Wilshire Blvd, part of the famous Miracle Mile and one of the busiest streets in Southern California. Los Angeles’s population density was about 4.5 times as high as Redbluff’s, at nearly 8,100 people per square mile.

Location Matters, but Driving Record Still Matters Most

Although companies in California are allowed to make rate adjustments based on geographic location, all coverage providers must have their rating plans filed and approved by the CA Department of Insurance before they can be used. Additionally, voters in 1988 adopted proposition 103, which requires all insurers to consider three mandatory primary factors before considering any secondary factors when calculating premiums. These three factors include the applicant’s driving record, annual mileage, and years of driving experience.

Where a motorist lives is actually at the bottom of the list of qualities that can affect how much someone pays for vehicle coverage, but a person’s driving record is very important. Getting the cheapest insurance in California means maintaining a clean driving record, so before moving to a heavily populated area, residents should take into consideration the increased accident potential. If a policyholder is forced to file a claim, it can negatively affect their premium for up to three years.

Handyman — Driving a more fuel-efficient vehicle can have a number of important benefits. Hybrid and electric-cars help their owners save fossil fuel, reduce their carbon footprint, and commute with the knowledge that they’re helping to preserve the Earth for future generations. Plus, it doesn’t hurt that driving an environmentally friendly auto can lead to significantly lower driving costs, even though they may initially appear more expensive to insure.

It’s no secret that gas prices have been steadily climbing since the invention of the automobile and show no signs of slowing down. Many of the people who purchase alternative-fuel-source vehicles do so to avoid watching their life savings disappear at the gas pump. But when they initially see insurance quotes for these vehicles, they may worry that an equal amount may be siphoned off by coverage costs.

For example, a premium analysis of 20 quotes from 10 different California insurers shows that, when comparing the cost of insuring a gas-only Toyota Camry with a hybrid version of the same model, on average motorists who own hybrids pay just over 10 percent more for vehicle coverage. This price increase is generally accredited to higher repair costs, but before writing off fuel-efficient automobiles as a cost-effective means of transportation, drivers should take discounts into consideration.

Coverage providers across the nation are beginning to offer special savings and rate reductions for insuring hybrids and other alternative-fuel vehicles. In California, for example, as of March 2012, there are at least three companies that offer insurance discounts as incentives for driving greener cars. These price reductions range from 5 to 10 percent, which could effectively nullify the increased coverage costs of having a hybrid or electric vehicle.

Driving Less: Another Way to Go Green and Save

Consumers can be environmentally friendly motorists through more ways than just owning a hybrid or electric car. Spending less time behind the wheel can help reduce a person’s carbon footprint while significantly lowering their driving costs, both at the pump and on their insurance bill.

A large portion of how much a motorist pays for protection is based on annual mileage. To an insurance company, more time spent behind the wheel translates into more opportunity to be involved in an accident, which in turn leads to higher prices.

Like any good environmentally friendly commuter, vehicle owners may want to look for ways to avoid driving. Biking to work, joining a car pool, or giving public transportation a try can all cut down on annual mileage and can lead to cheaper premiums. Motorists are encouraged ask their policy provider car insurance questions about how much they would need to cut their annual mileage to receive a rate reduction.

If a vehicle owner drives infrequently enough, they may want to consider signing up for a pay-as-you-drive insurance program that charges motorists based off of the distance that they commute. The California Environmental Defense Fund estimates that if 30 percent of CA residents took advantage of these programs, roughly 5.5 billion gallons of gas could be saved between 2009 and 2020, in addition to $40 billion in car-related expenses. Taking these steps to become an environmentally friendly motorist could lead not only to guilt-free commuting, but also to considerable savings.

Handyman — Significant changes to Florida’s no-fault auto insurance laws that deal with coverage provisions and criminal activity will start taking place in July 2012, although residents will not experience the full effect until January 2013. Gov. Rick Scott said he officially approved these changes on May 4, 2012, to hopefully decrease the number of falsified claims being made in the Sunshine State and reduce coverage costs. The existing no-fault personal injury protection (PIP) setup in the state has been said to breed a high level of staged accidents, inaccurate claims, and other less-than-reputable activity.

Combatting Criminal Activity

Many of the upcoming changes to PIP insurance in Florida are being done in an effort to prevent unlawful activity and decrease coverage costs for vehicle owners. When insurers are forced to pay out dishonestly adjusted accident claims, motorists statewide end up suffering in the form of higher premiums. A resident making a Florida insurance quote comparison may notice that the Sunshine State is home to some of the highest average coverage costs in the U.S. These adjustments to the law, however, hope to make a significant impact.

One major change taking place in July is that law enforcement officers will start being required to list all passengers on crash reports more frequently. This is intended to help prevent motorists from creating “phantom passengers” to recoup additional insurance benefits.

To discourage dishonest activity, there will also be harsher punishments for clinics and doctors who unlawfully take advantage of Florida’s no-fault system.

To improve the chances of success, the Sunshine State will also be forming a statewide, nonprofit monitoring group designed to prevent, investigate, and prosecute unscrupulous insurance-related activity within FL. When insurers are forced to pay fewer and only legitimate claims, residents are likely to find more affordable protection.

Starting on Jan. 1, 2013, motorists will also face greater limitations on how they can use their coverage.

Changes to Coverage

Beginning in 2013, drivers will only have 14 days to seek initial treatment for injuries sustained in an accident. If they don’t go in within that initial period, treatment will not be covered.

Vehicle owners who experience a medical emergency will have limited access to their medical benefits, depending on whether their condition is considered an emergency. People who only require nonemergency treatment will be limited to only $2,500 of coverage instead of the full $10,000. The full $10,000 can be used for emergency conditions, though. To qualify for a medical emergency, motorists need to experience severe symptoms that, without access to immediate medical treatment, could cause serious harm or impairment.

These benefits will also no longer be applicable to treatment from massage therapists or acupuncturists.

PIP currently provides at least up to $10,000 in medical benefits to policyholders, their children, members of the same household, and certain passengers who are not insured. Starting on July 1, 2012, this will also include a $5,000 death benefit.

The U.S. Supreme Court has issued an opinion that upholds the Affordable Health Care Act

This includes the individual mandate for coverage.  The case challenged the constitutionality of several parts of the law, including the rule that most people in the U.S. must get health coverage.   We will continue to carry out provisions of the law by thoughtfully implementing the new requirements for customers and members. We will also continue to look for ways to address increasing costs that are crippling our health care system, including: ·      Advancing our partnership with primary care physicians announced earlier this year that we believe will substantially improve quality and member health, and potentially reduce the trend in overall medical costs by as much as 20% by 2015. ·      Coordinating patient care through the use of IBM-Watson technology to promote evidence-based health care and ensure that millions of Americans receive the most effective courses of treatment.  We look forward to continuing our efforts to work with policymakers and other key stakeholders to build a health care delivery system that provides security and affordability to all Americans.

Handyman — California is home to many iconic beaches, miles of scenic highways, and nearly 24 million licensed drivers all eager for the upcoming summer months. Although the Golden State is a popular destination for many vacationers, there are several dangers that vehicle owners should be aware of that may increase their accident potential. If someone is involved in a collision or files a claim, there is a good chance that their insurance rates will go up. To avoid paying more for protection, it’s often best for motorists to take preventative measures.

One of the biggest attractions in CA during the summer is the Pacific Ocean. As a result, beach towns and scenic highways can get clogged with people eager for some fun in the sun. But with greater traffic density and competitive parking comes a higher chance of being involved in an accident, which can make California auto insurance prices higher. These driving situations are only made worse by the increased density of younger motorists.

Why Young Drivers and CA Roads Don’t Mix

Already young and inexperienced motorists are statistically prone to filing car insurance claims. Mix in the joy of summer vacation and the occasional party and residents have a potentially dangerous driving situation. Unfortunately, for younger motorists, alcohol can also be a major problem. In 2010 drivers in the 21-24 age group experienced the highest percentage of fatal crashes with BAC levels of 0.08 or higher. Studies have also shown that the 100 days between Memorial Day and Labor Day are among the deadliest for CA teens.

Staying Safe on Summer Vacation

To help motorists in the Golden State stay safe and avoid paying higher rates, the CA Insurance Commissioner encourages drivers to take the necessary precautions to avoid these common summertime dangers. Residents should always obey the posted speed limit and exercise extra caution while driving through crowded areas to avoid hitting any pedestrians.

Additionally, all residents are encouraged to create a plan before setting out on a summer road trip. Spending more time looking at the road instead of a map or GPS device can translate into safer travels. Additionally, vacationers are urged to thoroughly inspect their vehicles to avoid possible accident-causing blowouts or breakdowns while cruising down the California coast.

Handyman — For years, Kentucky motorists have been required to provide proof of insurance to register an automobile, but loopholes in state laws have allowed vehicle owners to immediately turn around and cancel their policy. Although insurers have been electronically submitting monthly coverage reports to the state since 2006, this information has not been used to actively pursue uninsured motorists, until now.

Starting in June 2012, Kentucky law enforcement officers and state officials will have the tools necessary to ensure that all drivers in the state are maintaining continuous coverage. The Bluegrass State will be making changes to its Mandatory Insurance Reporting Program that will allow the State Transportation Cabinet to review policy records to determine which motorists have been continuously insured. Those who are found to be in violation of the law will be issued uninsured notices, and face the possibility of having their vehicle registration automatically canceled.

After receiving a notice, residents will have 30 days to verify that continuous coverage has been maintained, or deal with the consequences. These changes were made in an effort to decrease the number of uninsured drivers in the Bluegrass State. In 2009, an estimated 18 percent of automobiles in KY had no coverage, but by actively pursuing residents who ignore state coverage requirements, local officials hope to significantly decrease this percentage.

If residents receive a notice, they need to prove that they have purchased auto insurance in Kentucky by providing any of the following documents:

• An insurance card
• Reinstatement notice if insured with the same company
• Proof of active military service or provost letter
• Proof of self-insured coverage
• Contract including a declaration page
• Binder or certificate of insurance issued by an agent

Driving without adequate coverage can lead to more than just registration cancellation. If stopped by a law enforcement officer, uninsured motorists could face fines up to $1,000, 90 days in jail, and the suspension of their license plates. Convicted residents might also be labeled as high risk drivers, making it much more difficult to find inexpensive protection in the future.

To avoid the oncoming crackdown on uninsured motorists, residents are encouraged to double-check their status through the KY Department of Insurance or purchase protection as soon as possible. Shopping around online for estimates can help motorists quickly and efficiently compare their options so they can affordably meet Kentucky coverage requirements.

Handyman — Technology is constantly changing the way we drive, and, more recently, it is beginning the change how we think about automobile insurance. To set rates, insurers usually examine an extensive amount of information about the driver and the vehicle he or she drives. But by examining data gathered from telematics programs, producers may be able to more accurately evaluate a person’s chances of filing a claim.

Telematics refers to the use of technology to track driver data and transmit it remotely. Some of these systems are also designed to record a person’s driving habits for insurance purposes.

Progressive has already paved the way for modern technology to be used for vehicle coverage pricing. By installing one of their Snapshot devices, motorists are charged based on a usage-based system that monitors braking tendencies and how far and when a car is driven. This program may be a recommended insurance coverage option for people who maintain low annual mileage and good driving habits.

Aside from Progressive, a number of other large insurers are offering such programs. GMAC has been offering pay-as-you-drive discounts for OnStar customers for years. State Farm recently introduced its Drive Safe & Save program in 13 states. Allstate has launched a similar program, called DriveWise, in Illinois, Ohio, and Arizona. And the Hartford announced it would be rolling out a pilot program, called TrueLane, that would track driving data in exchange for possible discounts.

Possible Telematics Advantages and Disadvantages

Despite the potential auto insurance discounts for driving a car equipped with telematics, debates still rage as to whether it is worth it to give up a little bit of privacy. In programs that offer the possibility of discounts in exchange for installation of a telematics device, enrollment is optional.

A 2012 survey from Consulting firm Deloitte showed that about one-third of respondents would be willing to install a telematics device in their car to get a discount. But 42 percent of them said it would depend on the size of the discount, with about half saying the discount would have to be 20 percent or more to convince them to give up a little bit of privacy for some savings.

To help allay any privacy concerns, insurers that offer telematics programs stress that they do not track a driver’s location, only driving habits.

Handyman — A motorist has shopped around, explored all options, and purchased the right auto insurance policy at a reasonable price. But over the years, premiums begin to climb for no apparent reason. Here are a few developments aside from getting tickets or accidents that might unexpectedly boost premiums:

Your Kid Reaches Driving Age: Insurance companies are always on the lookout for potential reasons why policyholders would file a claim. And for a coverage provider, there’s no greater threat than a teenager learning to drive. Accident statistics for younger motorists are notoriously bad. Despite advancements in technology and safer vehicles, automobile accidents remain the leading cause of death for teens 19 and under. As a result, the moment an insured driver’s child hits legal driving age, their rates may go up.

Your Credit Heads South: Credit score represents a person’s ability to honor a debt, but to some insurers, it also represents accident potential. Some companies say claims data show there is a correlation between the number of insurance claims that drivers file and their financial background. This has lead to a process called credit scoring, which is considered controversial by many drivers. Although fairly common, states like Ohio have placed limitations on how financial information can be used when underwriting drivers.

You Buy a Nicer Car: A motorist works hard and saves his dollars to buy his dream car, only to find out insurance rates have skyrocketed. The truth is the automobile that a person insures plays a major role in how much someone pays for protection. An expensive sports car, designed to look great and go fast, is likely more expensive to repair or replace than a humble sedan, and most likely a lot less safe. For insurers, this means a bigger loss if the insured driver is involved in an accident. To compensate for the additional risk, premiums are increased.

Your Insurer Takes a Hit: When someone’s coverage provider suffers heavy financial loss, the expense is usually passed on to policyholders in the form of higher prices. A high number of claims, lawsuits, or just bad investments can all mean lower revenue. Also, a company that is deep in debt is unlikely to offer cheap insurance rates to new customers. Before buying a policy, people are encouraged to investigate an insurer’s credit and investment history, and avoid purchasing a plan from a company on the verge of bankruptcy. Taking the time to do a little research could end up paying off in the long run.

Handyman — Driving and using a cell phone are two actions that don’t mix well. Research from Carnegie Mellon University suggests that using a cell phone while behind the wheel can reduce brain activity associated with operating a motor vehicle by as much as 37 percent. Nationwide, over 3,000 people were killed as a result of automobile accidents involving a distracted driver in 2010. With these statistics, it’s no wonder why it’s against the law to use a hand-held phone while operating a motor vehicle in California.

In the Golden State, using a cellular device while driving can get you a ticket, but it is not considered a moving violation, so it shouldn’t appear on a person’s record. Consequently, auto insurance companies won’t be notified of the offense, so policyholders shouldn’t suffer any surcharges as a direct result of the ticket.

There is one scenario where such a ticket could affect premiums indirectly, though. After receiving a traffic ticket, California motorists are required to either pay their fine or appear in court. Failing to do either of these could cause the Department of Motor Vehicles to suspend the offending resident’s driver’s license. Although a cell phone violation will not impact a person’s driving record, a license suspension will. Coverage providers are likely to take notice of this offense and charge more for vehicle coverage. With a blemished record, making a car insurance comparison is likely to produce higher priced policies.

In the near future, cell phone violations may directly impact a person’s driving record and how much they pay for insurance. As of March 2012, California Senate Bill 1310 is making its way through the legal system. If passed, motorists who are caught using a wireless telephone while behind the wheel would be assessed a point on their record for their second violation and any subsequent convictions, which insurers would likely be able to see.

Fines and Higher Coverage Costs from Distracted Driving

If someone is caught driving in the Golden State while texting or talking on a phone without the use of a hands-free device, they could be ticketed and fined up to $20 for the first offense and $50 for any subsequent offenses. Motorists may think that this is a fairly small sum, but offenders usually end up paying considerably more in additional fees and court costs. In many cities, these fees will result in a minimum fine of $159 for first-time offenses, and $279 for subsequent ones.

Motorists in the Golden State may be tempted to use their phone or wireless device to talk to friends or find parking in Los Angeles, but distracted driving can have serious consequences. Apart from the obvious accident risks, the possibility of paying a significantly higher car insurance premium should be enough incentive to either purchase a hands-free device, or avoid talking while behind the wheel altogether.

Handyman — For many motorists, pets are an essential part of the family, and they’re also frequent passengers in the car. But, unfortunately, most cars are not designed with animal safety in mind. In an accident, dogs and cats can suffer injuries just like people, and veterinarian bills can be very expensive. When looking for an insurance policy, people with four-legged companions might want to consider choosing an insurer that can offer a little extra pet-friendly protection.

​Insurers Offering Coverage for Pets

Vehicle coverage that includes pet injuries has become a feature of policies offered by several insurers.

Progressive, the insurer that’s known for helping people get insurance online, has led the way in providing protection for cats and dogs that are injured in automobile accidents. When policyholders purchase collision coverage, it comes with up to $1,000 of protection that Progressive will pay toward vet bills in the event that an animal companion is injured in an accident, according to the company. This also includes injuries to a dog or cat that is owned by a relative who is living in the same household as the policyholder. The coverage is not yet available in North Carolina or New Hampshire, however.

Farmers Insurance Group in 2008 began offering coverage for pets injured in auto accidents, but only in select states. The protection is limited to traditional family pets and does not include animals that are commonly kept for food or profit. Where available, it provides up to $600 worth of coverage and is included for no extra charge in policies that include both comprehensive and collision, according to a press release from the insurer.

The Chubb Group launched pet injury coverage in select states in February 2011, adding up to $2,000 in coverage for pets injured in crashes to its “Masterpiece Auto Preference” policy.

Even though the prevalence of pet injury coverage is growing, not every insurer offers it. The country’s second-largest insurer, Allstate, says on its website that pets are not covered under its auto policies. (Other large insurers like State Farm and GEICO did not have pet injury coverage info available on their sites.)

Dogs and Cats Mean Distracted Drivers

The reason why animal owners are encouraged to get insurance that includes pet injury coverage is that four-legged family members can be serious distractions while driving. The National Highway Traffic Safety Administration estimates that in 2008 over 5,800 people lost their lives and another 515,000 people were injured as the result of automobile accidents involving distracted drivers. Driving with an unrestrained dog in the car could have dangerous and financially devastating consequences.

To reduce the chances of having to actually use any newly acquired pet injury insurance, drivers should take the necessary steps to reduce driver distraction while behind the wheel. An unrestrained cat or dog can easily wander around a car with potentially dangerous consequences. If a dog wedges itself under the driver’s legs, it could prevent braking and easily cause an accident.

To avoid this, owners are strongly encouraged to restrain their animals while driving by investing in specially designed harnesses that allow dogs to be quickly attached to the vehicle’s seat belts. Additionally, investing in wire cages or plastic crates can also be effective ways to prevent animals from wandering around the car. Because pets are a part of the family, it’s important to keep them safe while on the open road.

Handyman — It has always been a good idea to drive safely and avoid accidents in Texas, but now vehicle owners have a little extra incentive. In April 2012, the state commissioner of insurance issued an order saying that rates for the state’s high-risk insurance pool will rise by 24.1 percent overall.

Effective on July 1, the price of bodily injury liability issued through the state-run pool will increase by 31.9 percent, and property damage liability will increase by 20 percent. Once these changes take place, the average base rate for a policy through the program that provides only bare-bones liability coverages will be $578 (but they can range from just under $300 to nearly $2,500).

​What Is the High-Risk Pool?

Strict financial responsibility requirements in the Lone Star State require motorists to carry auto insurance to legally operate a motor vehicle, but having a blemished driving record can make it difficult to find a willing insurer. If residents can’t buy protection from a company on the voluntary market, they may be forced to enroll in the Texas Automobile Insurance Plan Association (TAIPA) to avoid driving while uninsured. Unfortunately for many residents, TAIPA is about to get more expensive.

To use TAIPA, residents must have been denied coverage by at least two companies on the voluntary market. Usually, people are only denied insurance because they are considered high-risk drivers, which is a title that usually comes from having a poor driving record. When someone files multiple claims or has a history of moving violations, insurers usually determine that the driver in question is at a greater risk of being involved in an accident or filing a claim in the future, and they will either charge more or deny coverage entirely.

The Helpful Advantages of TAIPA

Before current enrollees decide that they’re not going to pay an extra 24.1 percent for vehicle coverage and will simply drive without insurance, they should strongly consider the consequences. Financial responsibility laws are in place to protect resident motorists, and if drivers are involved in an accident while uninsured, they may still be responsible for other people’s damages. In a serious accident, this could lead to thousands of dollars’ worth of repairs and medical costs having to be covered by the uninsured driver.

In addition, driving without adequate protection can result in fines ranging from $175 to $1,000, a driver’s license suspension, and the impounding of the uninsured vehicle. Because of these consequences and the dangers of driving while uninsured, residents are urged to take advantage of statewide programs before breaking the law.

Residents who are affected by increasing TAIPA premiums are encouraged to take action to avoid costly coverage. Being assigned a policy through the assigned-risk plan is not a life sentence. Only drivers who are unable to find an insurer on the voluntary market need to enroll, and driving records can improve over time. Most offenses that appear on a person’s record only remain visible for three years. This means that making the effort to become a model driver could allow motorists to eventually shop for cheap auto insurance in Texas and get a reasonable rate.

Handyman — Federal contractors need to prepare for another change in the online environment. Currently scheduled to take place in late July of this year, the Central Contractor Registration (CCR) system will no longer exist. The Federal government is starting a new registration system called the System for Award Management, or SAM [Uncle, get it?] for short. In addition to replacing CCR, SAM will incorporate the Federal Agency Registration [FedReg], the Online Representations and Certifications Application [ORCA], and the Excluded Parties List System [EPLS]. For all those contractors already registered in CCR and ORCA, you can breathe a sigh of relief; the Federal government is going to transfer your information into the new system. Although some of the terminology is changing, enough has remained the same that SAM should be familiar, so when the time comes for a contractor to renew its registration, it will not have too much trouble. For more information, go to the website.  A quick introduction to the new system is attached.

The government, however, is not through with its centralization of procurement information. Contractors familiar with the FedBizOpps system for reviewing solicitations, amendments, and other procurement actions can look forward to it being incorporated into SAM, along with the PPIRS, Past Performance Information Retrieval System, and many other data sites.

That’s life in the digital age, changing so quickly that it is hard to know whether you’re coming or going.

By: Edward T. DeLisle & Maria L. Panichelli

Handyman — Eight bills aimed at assisting small businesses won approval in the House of Representatives on May 18, 2012. The bills include not only the Government Efficiency Through Small Business Contracting Act, the Small Business Advocate Act, the Subcontracting Transparency and Reliability Act, the Small Business Opportunity Act, which we discussed previously, but also:

• the Building Better Business Partnerships Act (H.R. 3985), which would amend the Small Business Act with respect to mentor-protégée programs, and allow the Small Business Administration to oversee 13 current mentorship programs for small businesses;
• the Contractor Opportunity Protection Act (H.R. 4081), which would overhaul the appeals process for contract bundling;
• the Contracting Oversight for Small Business Jobs Act (H.R. 4206), which would amend the Small Business Act to provide for increased penalties for contracting fraud; and
• the Small Business Protection Act (H.R. 3987) which would revamp the SBA’s size standards, or the measure it uses to determine when a business is small.

Although these bills passed the House, the legislation’s fate remains uncertain; the measures are attached to a defense spending bill that President Obama has threatened to veto. We will continue to monitor the progress of these bills and report on any changes in the law.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group. Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.

By: Michael H. Payne

Handyman — Subcontractors who are performing work on Corps of Engineers construction projects in Afghanistan frequently experience financial difficulties because they are not paid promptly and, in some cases, they are not paid at all. Unlike construction projects performed in the United States, payment bonds have frequently not been required by the Corps in Afghanistan. FAR 28.102-1 provides that “The Miller Act (40 U.S.C. § 3131 et seq.) requires performance and payment bonds for any construction contract exceeding $150,000, except that this requirement may be waived (1) by the contracting officer for as much of the work as is to be performed in a foreign country upon finding that it is impracticable for the contractor to furnish such bond. . .” It is this exception that has been invoked to waive the usual payment bond requirement.

When a payment bond is in place, a subcontractor who has not been paid has the right to file a Miller Act suit in Federal Court demanding payment by the prime contractor’s surety. When there is no payment bond, subcontractors are at the mercy of prime contractors who, in some cases, have proven to be dishonest. With no surety to act as a guarantor of payment, subcontractors are forced to file suit directly against American prime contractors, in U.S. courts, or to take advantage of the laws of the local jurisdiction when dealing non-American prime contractors. Under this system, unscrupulous prime contractors can “play the system” by denying payment and effectively betting that the subcontractors will not have the capability, or the resolve, to do anything about it.

In our view, when the Corps of Engineers is aware that a prime contractor is breaching its subcontractor obligations, the Corps should quickly intercede before potentially catastrophic losses are incurred by the subcontractors. In fact, funding should be withheld from the prime and used to make direct payments to subcontractors. This makes eminently good sense because the United States cannot be promoting business opportunities for Afghani subcontractors, in an effort to cultivate the growth of viable construction companies within Afghanistan, and then stand idly by while those subcontractors are victimized by unscrupulous prime contractors. In many cases, the denial of payment by a prime contractor can result in the collapse and financial ruination of the subcontractor’s business. Although we understand that the Corps does not have privity of contract with subcontractors on a federal project, when the protection of a payment bond is not available we believe that the Corps should not stand idly by and hide behind a “lack of privity.”

We are aware that payment bonds are now being required on many Corps of Engineers’ projects, but that is of little help to those who did not have the protection of a bond on a prior contract. In addition, it is not easy for contractors to secure bonding to do work in Afghanistan, since many U.S. Treasury listed sureties are unwilling to issue the bonds. Although FAR 28.202(b) provides that “for contracts performed in a foreign country, sureties not appearing on Treasury Department Circular 570 are acceptable if the contracting officer determines that it is impracticable for the contractor to use Treasury listed sureties,” the approval of non-listed, or foreign, sureties has been inconsistent. Undoubtedly, many of the payment difficulties being experienced by subcontractors doing work in Afghanistan, and Iraq, could have been avoided if bonding had been required and facilitated by the Corps of Engineers.

Michael H. Payne is the Chairman of the firm’s Federal Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters regarding projects performed in the United States and other countries around the world.

Once motorists find the cheapest auto policy available to them, there are a number of ways they can make sure premiums stay affordable or even become cheaper. The easiest way to keep cheap rates is to follow the rules of the road. Speeding, running red lights or stop signs, or disobeying any law while operating a car can lead not only to tickets and a surcharge on premiums but also to dangerous and costly accidents. When a driver is convicted of committing certain moving violations or causing a traffic accident, he or she is likely to see an increased premium. In addition, if the insured was receiving a good driver discount, it may no longer apply and could cause the cost of a policy to rise over 10 percent.

Drivers can maintain cheaper car insurance rates by being active consumers. Most state consumer guides recommend that motorists compare premiums once a year. Now that the Internet has sped up the process of comparison shopping, vehicle owners can obtain quotes from numerous companies in a fraction of the time that it would have taken when motorists had to either open up the telephone book or drive around to agencies’ offices. Since shopping and comparing no longer has to be a time-consuming task, it can be done more often than once a year to check whether more affordable policies are available. The California Department of Insurance states that comparing quotes from different companies is important because rates vary dramatically between carriers. By actively monitoring coverage and policies, drivers are more likely to save money.

Drivers who are required to maintain comprehensive and collision coverage may still be able to make adjustments to their policy that can lead to lower prices. These protections are generally coupled with a deductible, which represents the amount of money that the policyholder agrees to contribute when covering the cost of physical damages. Choosing a higher deductible means that the motorist would have to make a higher contribution, but their premiums would be reduced.

Individuals who have existing health care plans may be able to cut costs by omitting optional medical payment coverage from their policy. Choosing to add this protection can help drivers pay for many different medical expenses after an accident, but with an existing health care plan, many of these costs may already be covered. Taking the time to trim overlapping protections can often be well worth the effort.

To help residents save money, the Oregon Insurance Division encourages drivers to take advantage of discounts. Almost every insurer offers special savings to attract new customers and reward loyal clientele. Most insurers will reduce prices for maintaining a clean driving record for over three years, insuring multiple vehicles at once, and many other reasons. Because every company is different, it’s important for motorists to contact several insurers to explore their options.

To avoid many of the consequences that can result from operating a motor vehicle without evidence of financial responsibility, drivers should carry a copy of their proof in the insured car. The consequences for driving without sufficient evidence differs depending on the state, but penalties generally include fines and the possibility of having the car impounded. More serious consequences could include the suspension of the driver’s license and registration, or a jail sentence.

To help reduce the number of uninsured motorists on the road, many states have adopted electronic verification systems that allow law enforcement officers and approved officials to instantly determine whether or not a motorist is adequately covered. For example, the Texas Department of Insurance has adopted a program called TexasSure that allows for instantaneous policy verification.

Many of the systems that help state officials determine electronically whether or not a motorist has purchased adequate coverage also produce random samples from registered motorists, and officials follow up on those samples in an effort to decrease the number of uninsured drivers. Even though advancements in technology have made it easier for authorities to determine whether or not a motorist is covered, it is still essential for people to carry physical proof of insurance within the automobile at all times. In many states, an insured vehicle owner without physical verification may still suffer legal consequences if stopped by an officer.

Although credit history is listed as one of the qualities commonly used to rate vehicle owners, in many states this practice is heavily regulated, and in three states it’s banned altogether. For example, the Washington State Office of the Insurance Commissioner says that state limits the use of credit scoring by not allowing insurers to deny someone auto protection based solely on their financial information. While some consumers and government officials believe looking at credit history to be either irrelevant or potentially biased, many insurers feel that a person’s fiscal habits directly relate to their likelihood of filing claims. Though they may not know it, drivers can help control coverage costs by maintaining sound financial practices.

But because prices are largely based on perceived risk, one of the most effective ways to get cheaper coverage is to maintain a clean driving record. Automobile accidents and moving violations usually only stay on a person’s driving record for three years. If vehicle owners can avoid filing claims or receiving moving violations for that long, their rates likely will decrease considerably.

In many states, motorists can take pre-approved driver training courses to better their abilities behind the wheel and potentially cut coverage costs. Often, insurers will award special discounts to drivers who complete these courses.

While it’s important for many motorists to get the cheapest coverage available, having an inadequate amount of insurance may end up costing residents money after an accident. The minimum amount of bodily injury and property damage liability only covers damage that the policyholder is responsible for, and only up to relatively low policy limits. If these limits are exceeded, the at-fault motorist is still financially responsible for the damages.

To avoid being underinsured, people should consider comparing quotes for policies that include increased liability limits and additional coverages. For example, CA residents may want to consider including uninsured motorist protection to safeguard against the estimated 15 percent of drivers who are uninsured in the Golden State. With additional research, many motorists may be able to find an affordable policy that includes sufficient protection.

To help lower-income residents meet state coverage requirements, the 1999 state Legislature established the California Low Cost Automobile Insurance Program (CLCA). This system is designed to provide income-eligible motorists with the liability protection needed to legally drive at an affordable rate. The CLCA income eligibility requirements are based on the gross annual earnings of all related persons living in the same household. Participants must have an income that is 250 percent or less of the federal poverty level. For example, a household consisting of three people must have a total income of under $46,325.

The market and a motorist’s personal information help to determine how much they pay for vehicle coverage. Personal details, such as age, gender, and marital status, can impact policy prices because they represent a statistical risk. For example, studies have shown that men file more claims than woman, and motorists under the age of 25 are involved in significantly more accidents than any other age group. Insurers will often look at this information to determine how likely someone is to file a claim, and then charge accordingly.

The type of automobile that a person wants to insure can also impact policy prices. Insurers often take into account the value of a car, as well as potential repair costs. Special safety and security features can help reduce premiums because they can reduce the possibility that the policyholder will be seriously injured in an accident, or that the insured vehicle will be stolen.

One of the many reasons why drivers are urged to compare premiums is that companies interpret driver risk differently. While many companies may deny someone auto protection after they have been involved in multiple accidents, some insurers may specifically target motorists who have a history of claims. Shopping around and exploring potential insurance policies can help people identify affordable opportunities.

Handyman Buy Cheaper auto insurance Rates for Teens

When an adolescent reaches legal driving age, the price of a parent’s policy is likely to increase simply because a high risk driver is living in the same household. If a youthful motorist joins another person’s insurance plan instead of purchasing their own, the primary policyholder’s premium will likely increase. However, this is still considered by many to be a cheaper way to meet state coverage requirements than purchasing a separate plan.

Apart from shopping around, there are several other steps that youths can take to help decrease coverage costs. Teens are encouraged to research documents like Tips for Selecting a Driver Training Program provided by the Georgia Department of Driver Services that can help them become better drivers, and potentially lead to lower rates. In many states, insurers are required to provide discounts for individuals who complete state-approved programs.

Maintaining exceptional grades while in school and keeping a clean driving record can also be effective methods for getting cheaper insurance. For example, many companies offer good-student discounts to anyone who can maintain a 3.0 GPA or higher while still in school. Additionally, keeping a clean record can help younger drivers eventually leave the high risk market and find cheaper coverage in the future. After keeping a clean record for several years, motorists are encouraged to once again shop around online for the lowest available prices.

Before becoming officially licensed motorists, most teenagers are already considered high risk drivers. Policy prices are largely based on the possibility that someone will be involved in an accident or file a claim, and younger drivers continue to demonstrate riskier behavior while behind the wheel. For example, the North Dakota Department of Transportation found that between 2001 and 2007, adolescents represented only 11 percent of driving residents, but were involved in 25.9 percent of all crashes statewide.

These negative statistics are one of the reasons why insurance rates for teenagers are usually higher than for the average driver. But despite these steeper prices, many motorists are still required to maintain adequate coverage to legally drive. Finding affordable auto protection as a newly licensed youth usually involves a fair amount of research. While most insurers generally target people in the preferred and standard market, some companies specialize in insuring high-risk individuals in the non-standard market as well.

Making multiple quote comparisons can usually help people of any age find lower-priced auto protection. But instead of contacting several companies directly for a sample rate, vehicle owners can use the Internet to amass dozens of estimates at once. On the World Wide Web, teens can explore their pricing options and seek out alternatives to buying their own plan. To cut costs, younger motorists can choose to join the policy of a parent or guardian, and take advantage of multiple discounts.