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Construction Corner - August 2018

 
 
CONSTRUCTION CORNER
Michael E. Catania
Legal News and Updates for the Design and Construction Industry
 
ICE, ICE Baby
 
ICE Undocumented Worker Audits, more commonly known as Form I-9 investigations, have increased 60% in the past year. The number of employers arrested on criminal immigration charges has climbed from 139 in 2017 to 594 in 2018. Civil immigration charges are seeing 6-fold increases as well. [1] ICE officials have further indicated a quadrupling of work-site audit raids over the summer months. [2] The following is a list of actions businesses can take to lessen the risks associated with such audits:
 
  1. Create an I-9 compliance Program--Identify a single individual in your organization that will handle compliance, the screening of potential new hires, and self-audits. Make sure this individual is properly trained. You want to avoid a situation where the employee demands more documentation than is mandated, as this can result in legal action by the applicant.
  2. Make sure I-9’s are carefully reviewed, timely obtained, and properly stored for easy access.
  3. Perform a Self-Audit-- check I-9’s for completeness, proper documentation, and retention. It is better to identify errors now than in the middle of a real audit!
  4. Create a Plan of Action-- Know ahead of time what you will do should the Department of Labor or ICE come knocking. If you are subject to a raid, immediately contact your attorney and request his/her presence ASAP. If you receive notice of an audit, contact your attorney so that he/she can perform an audit and correct any issues prior to the ICE visit.
  5. Subcontracts-- Make sure your standard subcontract has clear requirements re: I-9 compliance; and that it further provides for indemnification for any losses you may sustain as a result of a sub’s noncompliance.
 
[1] https://www.ice.gov/news/releases/ice-worksite-enforcement-investigations-already-double-over-last-year
[2] https://www.lawlogix.com/ice-reports-60-percent-increase-in-form-i-9-audits-with-plans-to-turn-up-the-heat-this-summer/
 
Legislative Updates- Prevailing Wage Law Remains untouched while Delay Damages become more widely available
Labor Law: As reported in our May Newsletter, Senate Bill 2975 sought to amend the labor law and expand prevailing wage requirements to certain private works contracts. As of the close of the most recent legislative session, this bill remained in the Finance Committee.
 
Delay Damages: Assembly Bill A7945A has passed both houses and is awaiting the Governor's signature. If put into law, contractors will no longer have to deal with onerous "No Damage for Delay" clauses in public contracts. Instead, public entities must now include a clause that allows for delay damages under certain circumstances, including failure to coordinate and progress the work, untimely issuance/approval of change orders and submittals, and site unavailability.
 
The legislation is widely applicable as "Public Entity" is given a broad definition that includes all State agencies, departments, boards, bureaus, municipal corps., public benefit corps., public authorities and school districts. The majority of these entities currently include catch-all, no-damages-for-delay-clauses in their contracts, limiting the contractor's remedy to more time even when it is the Public Owner that is solely responsible for an extensive delay. 
 
 
 
 
Public Bid Challenges
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If you have bid public jobs for any length of time you likely have contemplated challenging a bid award. Perhaps you had the lowest bid but the public owner deemed another contractor the lowest "responsible" bidder and awarded it the job instead. Or, maybe you found out that the lowest bidder continued to negotiate with the Owner after the bid award and that the final contract amount is higher than your bid! In these situations, it is important to know what your rights are and, more importantly, what relief the courts are willing to give:
1.         As a bidder, you have a statutory right to bring a petition to set aside an improperly awarded  contract. [1] This action takes the form of an Article 78 proceeding that seeks a restraining order vacating the bid award, preventing the public owner from making any payments to the chosen bidder, and compelling the public owner to  award  the contract to the petitioner.
2.       The problem, at least for the challenging contractor, is that courts rarely force a public owner to award a bid to the challenger. Instead, the court will likely force the Owner to re-advertise and rebid the contract.
3.        If the court rules in your favor, and finds that the bid was improperly  awarded , you are typically not  entitled  to recover damages. [2] This includes attorney fees.
 
Takeaway
If you are confident that you will win the bid if it is re-advertised, and the project’s potential profit warrants the attorney fees you will spend in bringing an Article 78 proceeding, then a court challenge may be the way to go. Remember, however, that you may be walking into a hostile environment. After all, if you win the bid you will be working for the very Owner you just sued!
 
[1] Article 78 of NY’s CPLR
[2] Stride Contracting Corp. v. Board of Contract and Supply of City of Yonkers, 181 A.D.2d 876, 581 N.Y.S.2d 446 (2d Dep't 1992); Bana Elec. Corp. v. Roosevelt U.F.S.D., 2011 WL 5825879 (N.Y. Sup 2011).
 
This Newsletter is meant to provide general information only and not to provide legal advice or opinions. The viewing of the information contained in this newsletter should not be construed as, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance on the information contained herein and we disclaim all liability with respect to actions taken or not taken based on any or all of the contents of this newsletter to the fullest extent permitted by law. An attorney should be contacted for advice on specific legal issues.

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