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WA: July 1, Identity Verification Required to Purchase Electrical Work Permit

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Beginning July 1, 2015, in Washington, to protect against unlicensed electrical contractors fraudulently obtaining electrical work permits, electrical contractors purchasing electrical permits using the paper application form will be required to print their name and mark their affiliation with the company on the permit application. The customer service representative will then check the license information to confirm that the person purchasing the permit is authorized under Washington Administrative Code section 296-46B-901(3) to do so. If the person identified on the permit application is someone other than the assigned administrator, master electrician, owner, principal of the corporation, or a documented authorized signer, the customer service representative will not sell the permit.

6th Circuit Directs District Court to Revisit Derivative Governmental Immunity Decision

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On June 2, the U.S. Court of Appeals for the Sixth Circuit decided the case of Adkisson v. Jacobs Engineering Group, Inc.. The Court of Appeals reversed the federal district court's dismissal of lawsuits premised on the argument that Jacobs Engineering Group, Inc. was entitled to derivative governmental immunity based on its contractual relationship with a government entity protected by the Federal Tort Claims Act, directing the district court to its decision. The Court of Appeals noted that the extent of immunity for government contractors has been debated by the courts of appeals, suggesting that the Supreme Court may want to take another look at some of its rulings in this area.

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California Court: Dispute Over Contract Price Did Not Entitle Public Entity To Withhold Funds Due To Contractor

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Recently, a California Court of Appeals, in East West Bank v. Rio School District, concluded that "a dispute over the contract price does not entitle a public entity to withhold funds due a contractor," avoiding the Public Contract Code § 7107 penalties. It further noted its disagreement with the 2009 decision in Martin Brothers Construction, Inc. v. Thompson Pacific Construction, Inc., 179 Cal.App.4th 1401 (2009), and confirmed that the doctrine of unclean hands does not apply to Section 7107.

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April 28: CSLB Training On New Public Works Registration And Related Requirements Imposed by SB 854

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Recently, the California Contractors State License Board announced that it will be hosting a seminar/webcast to help contractors to comply with the new requirements imposed by Senate Bill 854, including the requirement that contractors register with the Department of Industrial Relations in order to bid or be listed on a bid for a public works project and to work on a public works project awarded on or after April 1, 2015.

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Enhanced Infrastructure Districts: A Flexible New Tool for Local Governments

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By Pillsbury Winthrop Shaw Pittman

Today, Pillsbury attorneys Glenn Snyder and Matt Valdez published their client alert titled Enhanced Infrastructure Districts: A Flexible New Tool for Local Governments. The Alert discuss the developments occurring after the dissolution of California redevelopment agencies (RDAs) in 2011. In particular, many local governments desired a tool to raise capital to invest in infrastructure and community revitalization. On September 29, 2014, Senate Bill 628 was signed into law by Governor Jerry Brown. SB 628 grants cities and counties the power to create Enhanced Infrastructure Financing Districts (EIFDs) in order to finance public capital facilities or other specified projects of communitywide significance that provide significant benefits to the district or the surrounding community; and expands on the powers granted to cities and counties pursuant to Infrastructure Financing Districts (IFDs) and Community Facility Districts (CFDs). In turn, the EIFDs provide greater flexibility to local governments seeking to invest in infrastructure and community revitalization, including a lower voter approval threshold to issue bonds and a wider range of infrastructure investments.

House Small Business Bill Could Have a Large Impact on Small Businesses

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Yesterday, we published our client alert titled House Small Business Bill Could Have a Large Impact on Small Businesses. The Alert discusses the House Small Business Committee's recent approval of The Small Contractors Improve Competition Act of 2015 (H.R.1481) ("SCICA"). SCICA would amend the Small Business Act and the National Defense Authorization Act for Fiscal Year 2013, and is intended to increase the number of awards made to small businesses by addressing several perceived obstacles that inhibit opportunities to increase small business participation in Federal contracting.

Reminder: California Contractors Are Required To Register With DIR Before Bidding On Public Works Projects

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The California Contractors State License Board (CSLB) recently issued a press release reminding California contractors that, beginning March 1, 2015, all contractors are required to register with the Department of Industrial Relations (DIR) in order to bid on public works projects and, on April 1, 2015, all contractors will be required to be registered with DIR to be awarded a public works contract, even if the project did not go out to bid. This new requirement became effective on June 20, 2014 as a result of Senate Bill 854. DIR maintains a listing of registered contractors and subcontractors on its website to assist the various awarding bodies to confirm that bidders are properly registered, and for contractors who need to confirm that their bid team members are registered.

The CSLB also reminded contractors that they are also required to submit certified payroll records (CPRs) to the Labor Commissioner's office for all new projects awarded on or after April 1, 2015, and for other projects if the projects are still on-going after January 1, 2016. The only exception will be projects awarded by Caltrans, the City of Los Angeles, Los Angeles Unified School District, Sacramento County, or projects that utilize a project labor agreement.

Additional Source: CA: Public Works Contractors Online Application System

GSA May Abolish the Price Reduction Clause

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By Pillsbury Winthrop Shaw Pittman

Yesterday, Pillsbury attorneys John Jensen and Claire Cavaliero published their client alert titled GSA May Abolish the Price Reduction Clause. The Alert discusses the U.S. General Services Administration (GSA) recently issued proposed rule that could abolish the long-standing price reduction clause (PRC) from the GSA Schedule program. GSA is proposing to eliminate the clause and to use, instead, the submission of "transactional data reporting" to help achieve its goal of fair and reasonable pricing on all orders. The rule would require contractors to report transactional data for orders placed against GSA Federal Supply Schedule (FSS) and other GSA contracts. The proposed rule is designed to improve GSA's ability to conduct meaningful price analysis and more efficiently and effectively validate fair and reasonable pricing. It is also intended to reduce the burden on contractors imposed by the current GSA PRC.

Important New CWA Cases

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On March 10, 2015, the U.S. Court of Appeals for the Fourth Circuit issued an unpublished opinion in Precon Development Corporation, Inc., v. U.S. Army Corps of Engineers. For several years, Precon has been contesting the Corps' assertion of Clean Water Act (CWA) jurisdiction over Precon's planned commercial and residential development in Chesapeake, Virginia. At issue is the jurisdictional status of 4.8 acres of wetlands that Precon wants to fill in: Is this land subject to the Corps' permitting authority under Section 404 of the CWA because the wetlands are "water of the United States" on the basis of Justice Kennedy's "significant nexus" test, as explicated in the 2006 Supreme Court case of Rapanos v. United States, 547 U.S. __ (2006)?

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Lining Up to Bid Protest

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Today, my colleague Alex Tomaszczuk and I published our client alert Lining Up to Protest Bid -- protest dismissed as company fails to allege it was "next in line" for award. The Alert discusses the U.S. Court of Federal Claims' February 10, 2015 decision in Universal Marine Company, K.S.C. v. United States, No. 14-1115C, dismissing the bid protest complaint filed because the protester was not "next in line" for award of the contract and, therefore, lacked standing to protest. As noted in the Alert, this decision serves as a critical reminder for bid protesters of the necessity of demonstrating, through a carefully crafted complaint, that they were "prejudiced" by the agency's actions.

OFCCP Publishes Notice of Proposed Rulemaking re Sex Discrimination Guidelines

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The Office of Federal Contract Compliance Programs (OFCCP) recently announced the publication of a Notice of Proposed Rulemaking (NPRM) to revise and replace its Sex Discrimination Guidelines. The NPRM would rescind OFCCP's guidelines on federal contractors' obligations not to discriminate on the basis of sex under Executive Order 11246, as amended, and replace them with updated regulations. This update will be the first in more than four decades. It is expected to reflect present-day workplace realities and align OFCCP's guidelines with current law under Title VII of the Civil Rights Act of 1964. The proposed amendments will address compensation discrimination, sexual harassment, failure to provide workplace accommodations for pregnancy, and gender identity and family caregiving discrimination, among other topics.

The NPRM will be published in the Federal Register on January 30, 2015, and the public will have until March 31, 2015 (60 days) to provide comments.

Additional Sources: US Labor Department proposes critical updates to sex discrimination guidelines for federal contractors and subcontractors; OFCCP Proposes Updated Sex Discrimination Rule

A Cautionary Tale for Small and Large Businesses in a Mentor-Protégé Relationship: Size Appeal Of Kisan-Pike

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Yesterday, we published our client advisory titled A Cautionary Tale for Small and Large Businesses in a Mentor-Protégé Relationship: Size Appeal Of Kisan-Pike. The Advisory discusses the Small Business Administration ("SBA") Office of Hearings and Appeals' ("OHA") November 24, 2014 finding that a mentor-protégé joint venture agreement between Kisan Engineering Company P.C., a small 8(a) business, and The Pike Company Inc., its large business mentor, caused the joint venture to lose its status as a small business. As a result, the joint venture was not qualified to receive a contract award on a procurement reserved for small businesses. OHA disqualified the mentor-protégé joint venture despite the fact that the SBA had approved the Kisan-Pike mentor-protégé agreement, through which Pike was to mentor Kisan.

You Can't Change That - We Had a Deal!

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On December 9, 2014, the U.S. Civilian Board of Contract Appeals ("CBCA") decided Kiewit-Turner, a Joint Venture v. Department of Veterans Affairs, in which general contractor Kiewit-Turner ("KT") scored a major victory against the Department of Veterans Affairs ("VA"). The CBCA ruled that a change order required the VA to deliver a design that could be built for costs that were capped at a specified amount -- shifting risk to the owner from the contractor.

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CA Prevailing Wage Law ~ Revised Definition of "Construction"

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On September 30, 2014, Governor Edmund G. (Jerry) Brown Jr. signed into law California Assembly Bill 26 and Assembly Bill 2272, both of which are effective January 1, 2015. Existing law requiring payment of prevailing wages defines "public work" to include, in part, "[c]onstruction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds..." Cal. Lab. Code § 1720(a). AB 26 redefines "construction" to add "work performed during the postconstruction phases of construction, including, but not limited to, all cleanup work at the jobsite." Cal. Lab. Code § 1720(a)(1). Existing law otherwise contemplates fines for failure to pay prevailing wages and makes a willful violation of laws relating to the payment of prevailing wages on public works a misdemeanor.

Additional Source: California Department of Industrial Relations, California Prevail Wage Laws

Badge of Honor ~ NJ Requires Contractors' Employees to Wear Photo ID Badge

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Effective August 19, 2014, New Jersey Senate Bill 2363 went into effect, requiring contractors required to register under the Contractors' Registration Act, N.J.S.A. §§ 56:8-136, et seq. -- home improvement contractors -- to wear a state-issued identification badge "on the upper left corner of his torso when the contractor is performing, or engaging, or attempting to engage in the business of selling home improvements" at all times on the job. The badge includes a color photograph of the employee's face along with his/her name, and the contractor's registration number and business name. A new badge is required every six years. Governor Chris Christie signed into law S.B. 2363 on August 19, 2013. The bill was reportedly prompted by fears of potential scams on Superstorm Sandy victims. It is believed that requiring contractors' employees to wear these badges will add another layer of protection against fraud.

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