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Kuwait and see

Sep 15 2011

As investors target Saudi and Qatar, it is still possible that Kuwait may turn to a hybrid PPP model involving outsourcing and privatisation, write Paul de Cordova and Patricia Tiller at K&L Gates.

While western economies blow hot and cold over the merits of PPPs, many Middle East countries are embracing this alternative to conventional government procurement. Kuwait is prominent among the first movers in this emerging sector. Kuwait introduced its own PPP law in 2008, with guidelines administered by the Partnerships Technical Bureau (PTB) and developed in consultation with the World Bank. Kuwait is taking a professional approach to bringing projects to market. Unlike some of its neighbours who have announced PPP schemes with little advance planning, Kuwait is endeavoring to approach projects in a methodical manner. Every project must undergo a feasibility study stage and be approved by a ministerial higher committee under the chairmanship of the Ministry of Finance before entering the procurement stage. Furthermore, the PTB is required to engage professional advisers to ensure, as far as possible, that projects are structured to attract the international investment community.

To read the full article click here.

This article originally appeared in PPP Bulletin International on September 14, 2011.

GAO Report Finds Flaws in Davis-Bacon Act Prevailing Wage Determinations

Sep 02 2011

By: Lawrence M. Prosen & Andrew R. McFall, K&L Gates, Washington DC

Over the past several years, the current business conditions have had an impact on all areas and aspects of the economy. Recent reports indicate that no industry has been harder hit than that of construction, an industry possessing one of the highest national levels of unemployment. Unemployment in the construction industry has spiked from 7.1 percent in 2000 to around 20 percent in early 2011. Tied to this issue is the fact that the commercial and private construction and real estate markets substantially dried up as a result of the economy and underlying bank crises. This, in effect, resulted in government construction and real estate projects being the predominant area in which work was available; forcing contractors to enter the federal market, often for the first time, and ‘‘learn on the fly.’’

The current economic problems have also resulted in Congress increasing or maintaining spending levels for a number of years on construction and related projects to try and bolster the economy. These expenditures and stimulus efforts have led to an increased curiosity and concern for how government monies are being spent. Coupled with the inauguration of President Obama in 2009, there has been a significant uptick in the amount of government regulation and oversight regarding government contracting and the construction industry. As part of that effort, the United States Government Accountability Office and other governmental organizations have conducted investigations and released reports dealing with government expenditures and budgeting. This article discusses one such report.

On March 22, 2011, GAO released a report (the ‘‘Report’’) raising several issues and concerns with the U.S. Department of Labor’s (‘‘DOL’’) methodology for making Davis-Bacon Act wage determinations. The Report is noteworthy, in that the Davis-Bacon Act plays a significant role in federal and federally funded construction projects throughout the United States. This article provides a brief background on the Davis-Bacon Act, a description of the Report and its recommendations, a discussion of the potential implications of the Report on the Service Contract Act, and a list of practical tips that construction contractors should consider in light of the Report.

To read more and to view footnotes, click here.

K&L Gates’ Partners Found Illinois Chapter of Construction Owners Association of America

Jul 26 2011

Chicago partners Greg Andre and Dan Rosenberg have co-founded an Illinois chapter for the Construction Owners Association of America ("COAA"). An inaugural program is scheduled for October 6th at which Greg will lead a panel presenting on Integrated Project Delivery. Greg chairs the chapter’s Executive Committee and Dan chairs its Program Committee. Officers must be owner members and consist of representatives of the University of Chicago, University of Illinois, Exelon Corporation and Northwestern Memorial Hospital. COAA is national organization dedicated to providing education, information and networking for real estate owners with ongoing construction work. Its members consist primarily of educational and health care organizations, both of which are active in construction today.

For more information, please visit the COAA website, here, or contact any of the following people:

Preparing for Flying Blind: The Possible Effects of a Government Default on Government Contracts

Jul 08 2011

By: Lawrence M. Prosen, Joel S. Rubinstein, Tim L. Peckinpaugh, James T. Walsh, Andrew R. McFall & Christopher M. Smith, K&L Gates, Washington DC

Government shutdowns, while very uncommon, are no longer a completely unknown beast to government contractors (or at least the threats of them are not). Much has been written about their causes, effects, and the ways contractors can prepare for them. The current discussions about raising the debt ceiling, however, present a completely different, and unknown, challenge to government contractors. There is a very real fear that the gridlock in Congress may prevent a raising of the debt ceiling, forcing the government into default on its financial obligations. This would be a novel occurrence, a first for the U.S. government, with unknown consequences. The best-prepared contractors, however, will be the ones to weather the storm successfully and come out the other side better positioned in the marketplace, and in all possibility with significantly fewer competitors.

This Legal Insight is intended to make you aware of some of the unique aspects of a U.S. government default and its effects.

To continue reading, click here.

Are Prevailing Wages “Prevailing”? – GAO Report Finds Fault with Davis-Bacon Act Wage Determinations

Jul 01 2011

By: Lawrence M. Prosen, Samson Y. Chen, K&L Gates, Washington DC

On March 22, 2011, the United States Government Accountability Office (“GAO”) released a report (the “Report”) raising several issues with how the U.S. Department of Labor (“DOL”) has been making Davis-Bacon Act wage determinations. This is a significant report, in that the Davis-Bacon Act plays a substantial role in federal and federally funded construction projects throughout the United States. The Davis-Bacon Act, located at 40 U.S.C. 3141 et seq., requires contractors on federally funded construction projects in excess of $100,000.00 to pay locally “prevailing wages” to their hourly paid field employees performing work on the project site. In other words, in order to bid on federal construction projects, construction contractors and subcontractors alike must pay their field employees at least as much as other construction workers in the area earn as determined by the DOL’s Wage-Hour Division. The Davis-Bacon Act’s stated purpose is to preserve local wage standards and promote local employment. This alert briefly highlights DOL’s problems in determining wage rates and summarizes GAO’s recommendations for improvement.

To continue reading, click here.

Prompt Payment Penalties: CA Court of Appeal Relaxes Standard, “Good Faith Dispute” To Be Proven By Objective Evidence

Jun 29 2011

FEI Enters., Inc. v. Kee Man Yoon, 194 Cal. App. 4th 790 (2011)

To encourage general contractors to make timely payments to subcontractors, California Business and Professions Code section 7108.5 requires a general contractor to pay its subcontractors within 10 days of receiving a corresponding progress payment from the project’s owner, unless the parties agree otherwise in writing. If the general contractor fails to do so, the subcontractor may recover a payment penalty. That penalty is fixed at 2% of the amount due per month for every month the payment is not made.

The general contractor, however, may withhold progress payments and avoid the payment penalty if there is a “good faith dispute” over the amount owed. The question is what constitutes a “good faith dispute.” In the recent case of FEI Enters., Inc. v. Kee Man Yoon, 194 Cal. App. 4th 790 (2011), the California Court of Appeal held that a “good faith dispute” exists “where the arguments asserted or positions taken have objective legal tenability.” In other words, the subcontractor does not need to show what a general contractor believed in his or her own mind. The subcontractor only needs to show objective evidence that the general contractor’s actions were unreasonable.

Can Government Contractors Certify That Their Goods and Services “Exist in Productive Harmony” with Nature? New Rule for Federal Green Contracting

Jun 23 2011

By: Lawrence Prosen, Barry Hartman, Nickolas Milonas, K&L Gates, Washington D.C.

Federal Agencies Issue Interim Rule Promoting Sustainability & Green Building

Sustainability and “green building” have continued to gain momentum and visibility. Over the past several years, the Federal Government and its various agencies and administrations have increased the extent to which these goals are embodied in government contracting, ranging from green design outlined in the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) requirements to the use of recycled paper for printers and copiers. This trend has continued to gain prominence through such things as changes in building codes to President Obama’s issuance of Executive Orders on the topic. See Exec. Order No. 13,423; Exec. Order No. 13,514.

On May 31, 2011, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued a joint interim rule (the “Rule”) that for the first time directly and specifically incorporates sustainability requirements into the Federal Acquisition Regulation (located at Title 48 of the Code of Federal Regulations). 76 Fed. Reg. 31,395 (May 31, 2011). The Rule took effect immediately and implemented the aforementioned Executive Orders that require Federal agencies to lead by example in conservation and energy efficiency.

To continue reading, click here.

International Commercial Arbitration in Brazil – A Primer

Jun 22 2011

By: Richard F. Paciaroni, K&L Gates, Pittsburgh

Background

Pre-1980 Brazil could rightly be said to have been hostile towards arbitration, clinging to the “Calvo doctrine” which did not permit foreigners any different treatment than Latin American nationals. In the late 1980’s, however, Brazil began to emerge from its shell and take its first steps towards a more modern approach in respect of international arbitration.

The first movement towards modernization was Brazil’s ratification of the Panama Convention in 1995, closely followed by: (1) the adoption, in 1996, of its own national arbitration law, Law No. 9.307, 23 September 1996 (the “Arbitration Act”) and (2) the adoption of the Mercosur Protocol in 1998, all of which set the stage for modern arbitration practice in Brazil. While the new Arbitration Act was enacted in 1996, it took another five years to come into full force due to a constitutional challenge lodged in the Brazilian Supreme Court, which ultimately decided, in December 2001, that the Arbitration Act was constitutional. After 2001, the Brazilian courts have routinely enforced arbitration clauses in commercial contracts, thus bringing Brazil in line with internationally accepted standards. With the ratification of the New York Convention in July 2002, Brazil joined the family of nations who offer a viable legislative and enforcement framework for international arbitration proceedings.

Further adding to the acceptance and visibility of the arbitration practice in Brazil are the actions of the Brazilian Arbitration Committee (“CBAr”) which has taken steps in recent years to promote international arbitration in Brazil by forming relationships with international institutions like the ICC, LCIA and ICDR and by holding major conferences in Brazilian cities, such as the ICCA bi-annual convention which was held in Rio de Janeiro in 2010. What follows is a brief summary of the key points of the Arbitration Act and various court decisions that provide support for international commercial arbitration in Brazil.

To continue reading, click here.

Sales of Goods: Battle of the Forms Under UCC and CISG – A Practical Perspective (Live Audio Conference)

Jun 07 2011

Offered via Webinar by Lorman Education Services

Please join K&L Gates partners Jason L. Richey and Richard F. Paciaroni for this informative seminar on Wednesday, August 10, 2011 at 1:00 p.m. U.S. Eastern Daylight Time. (CLE credit is being provided for this event, where available. See the registration link to the right for more details.)

Session Description
This live audio conference will focus on Standard Terms and Conditions for Sales of Goods, Uniform Commercial Code (UCC) 2-207 “Battle of the Forms,” and a discussion of the UN Convention on the International Sale of Goods (CISG) with an emphasis on the outcome of the Battle of the Forms.

The session will analyze when the UCC and CISG apply to certain transactions. We will then look at “best practices” in use for standard forms for both buyers and sellers, examine some example scenarios and compare and contrast likely outcomes between UCC and CISG controlled contracts. The program will also look at recent legal developments for both the UCC and the CISG.

Registration:
Click here to register and receive a 20% discount. When registering, use priority code 15800 and discount code F2716129.

Supreme Court Ruling Impacts Arbitration Appeals

May 31 2011

By: Jason L. Richey, Amy Ream, K&L Gates, Pittsburgh

Following the Supreme Court’s decision in Hall Street Associates, LLC v. Mattel, courts across the country have divided as to whether an arbitrator’s “manifest disregard of the law” remains a proper basis for judicial review of arbitration awards. For construction disputes taken to arbitration, this unsettled question could impact the final outcome of the dispute.

Whether “manifest disregard of the law” is an acceptable ground for judicial review of an arbitration award concerns the application of the Federal Arbitration Act (FAA). The FAA provides expedited judicial review for confirming, vacating, or modifying an arbitration award. Under the FAA’s expedited review process, a reviewing court must confirm an arbitration award unless a specific ground for judicial review exists. The primary grounds for judicial review appear in the statute itself, under sections 10 and 11 of the FAA. These sections set forth specific grounds, such as an arbitrator’s material miscalculation of an award, that trigger a court’s power to vacate or modify an award.

To read the full article, click here.

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