"Final DRAFT" of VDOT Road and Bridge Specifications Published for Comment

Vandeventer Black Construction and Government Contracts Group attorneys Pat Genzler and John Lockard have prepared the below summary of the newly published Final DRAFT of VDOT's proposed Road and Bridge Specification changes for review by the industry and the Federal Highway Administration. More information will be available at the Firm's website as well.

FINAL REVISED VDOT ROAD AND BRIDGE SPECIFICATIONS PUBLISHED AND AVAILABLE FOR COMMENT
 
Since the Virginia Department of Transportation (VDOT) proposed changes in 2013 to its Road and Bridge Specifications, Vandeventer Black lawyers have been working with industry representatives to try and initiate a more collaborative process about them. Vandeventer Black lawyer Pat Genzler, as General Counsel for the Virginia Transportation Construction Alliance (VTCA), has helped lead those efforts.

VDOT has now published the revised specifications in Final DRAFT form, and they are available as of this posting at the following VDOT website:

http://www.virginiadot.org/business/const/construction_division_road_and_bridge_specification_book_2016_final_draft.asp

VDOT is now opening the complete book to final review from the industry and the Federal Highway Administration. The same webpage includes a form for comments on the Final DRAFT.

Separately, on December 28, 2015 VDOT announced interim revisions to the 2007 Road and Bridge Specifications would be effective with the First January 2016 Advertisement (January 28, 2016). Those revisions are available in full on the VDOT website at http://www.virginiadot.org/business/const/spec-default.asp.


Despite prior industry input, Final DRAFT includes various changes significantly shifting risks from VDOT to contractors, including among those the following Section 100 changes:

-        Increased requirements for pre-bid review of contract documents and site information to identify any “ambiguities, conflicts, errors or omissions” and to provide written notice to VDOT – with the intended purpose of using the lack of written notice to bolster claim waiver arguments by VDOT.

-        Additional requirements for prompt written Notice of changed circumstances and waivers of contractor claims where notice has not been provided.

-        Shortened times for providing Notice of various changed conditions.

-        Additional bidder disqualification requirements.

-        Risk shifting relating to utility relocation.

-        Requirement and allowable compensation changes for additional costs relating to delays and differing site conditions.

-        Storm water permit requirement changes, both within and outside the right of ways.

Other changes are also proposed for Section 100, and other sections as well, and more detailed summary respecting the Final DRAFT’s current proposed changes is available at Vandeventer Black’s Construction and Government Contracts Group website at www.vanblacklaw.com.

The impacts of the final version will also depend upon VDOT application of them as project issues arise. But it remains important that all prospective bidders, subcontractors, and suppliers for VDOT projects review the Final DRAFT for how the revisions may affect future bids and proposals, project contract documents, and project management – and provide comments that, perhaps, VDOT will be willing to incorporate into the final revised version.

Final Rule Prohibiting Federal Contractors Retaliating Against Employees and Applicants Who Discuss Wages Issues and Becomes Effective for Contracts Entered Into or Modified On or After January 11, 2016

On September 11, 2015, the Office of Federal Contract Compliance Programs (OFCCP) published its final rule prohibiting federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose job compensation information. The final rule was published in the Federal Register, Vol. 80, No. 176, pp. 54934 - 54977.

The final rule implements the directives of President Obama's Executive Order 13665, which in short prohibits federal contractors from discharging, disciplining, retaliating, or discriminating in any way against employees or applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant.

But, of note, the final rule does not protect employees whose jobs give them access to compensation information (such as those in human resources, information technologies, or payroll positions) who disclose other employees’ compensation to others who do not have a legitimate business reason to obtain the information.

Also of note, this final rule mirrors the existing legal requirement for all employers subject to the National Labor Relations Act, as amended, to refrain from interfering with employees’ rights to discuss wages, hours, and terms and conditions of employment during non-work time.

The final rule applies to any business or organization with any single federal or federal-assisted contract or subcontract in excess of $10,000, or if they have combined contracts in excess of $10,000 in a year. Covered contracts are those entered into or modified on or after January 11, 2016.

The final rule requires notification to employees and job applicants of the non-discrimination protections created by Executive Order 13665 using existing methods of communicating to applicants and employees.

The final rule also requires covered contractors and subcontractors to include the following language in their existing employee manuals and handbooks and to disseminate the provision to employees and to job applicants:

"The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employees or applicant for employment has inquired about, discussed, or disclosed the compensation of the employee or another employee or applicant. This provision shall not apply to instances in which an employee who had access to the compensation information of other employees or applicants as part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information."

The OFCCP website includes a Frequently Asked Questions web page regarding the final rule, which is available (as of this Legal Alert’s publication) at:

http://www.dol.gov/ofccp/regs/compliance/faqs/PayTransparencyFAQs.html.

For more information about the final rule or its implementation, please contact a member of the Vandeventer Black team of professionals at (757) 446-8600 or www.vanblacklaw.com.

OSHA Fine "Catch Up" Provision Included as Part of 2015 Bipartisan Budget Act

Among the things included in November 2015's Bipartisan Budget Act is Section 701, which is referenced as the "Federal Civil Penalties Adjustment Act Improvements Act of 2015." In short, the purported purpose is to "catch up" OSHA fines for inflation over the last 25 years. That will translate into an as much as 80% increase for OSHA fines. The initial adjustments are currently slated for August 1, 2016, and OSHA is expected to publish related rules for public comment early this year. Job safety is its own incentive of course, but this new provision adds an additional layer of economic incentives as well.

Provision Agreeing to Not Challenge Arbitration Award Voided by Georgia Court

An increasingly popular arbitration clause provision is language purporting to waive later challenge to the arbitration award. In a recent decision in Atlanta Flooring Design Centers, Inc. v. R.G. Williams Constr., Inc., 733 S.E.2d 868 (April 2015), the Georgia Court of Appeals held such waiver void and unenforceable.

While that court recognized the general fundamental principle that parties have the right to freely contract, it rationalized that Georgia's arbitration act does not permit such waiver or elimination of right to seek to vacate or modify an arbitrator's award. The court also relied upon federal case law interpreting the Federal Arbitration Act similarly holding.

Virginia's arbitration statutes are similar to those of Georgia and the Federal Arbitration Act. So, would a Virginia court rule similarly? That remains to be seen.

For example, compare the Atlanta Flooring analysis with the Virginia Supreme Court's holdings in Gordonsville Energy v. Virginia Electric and Power Company, 257 Va. 344 (1999) enforcing a contractual provision waiving the right to challenge a contract's liquidated damages provisions. But one can certainly distinguish waiving another contractual provision (in that case for LDs) from a statutory judicial review statute such as applies to an arbitration award.

Time, and someone's judicial challenge, will tell.

Changes . . . New Overtime Rules Published by Department of Labor

Earlier this year, the Department of Labor (DOL) published new proposed rules for FLSA overtime requirements. Among the proposed rules, DOL has proposed:

• Increasing the salary threshold from $23,660/year to $50,400/year [40th percentile].

• Increasing the "highly compensated" threshold from $100,000/year to $122,148/year [90th percentile]; and

• Automatically increasing the thresholds to "keep pace with inflation."

The new rules will go into effect in 2016 absent further change.

Vandeventer Black's Anne Bibeau regularly address these and related employment matters, both involving overtime issues and employment issues for broadly. For more information about these changes or any other employment law matter, please contact her or any of the other Vandeventer Black Employment Law Group team members - www.vanblacklaw.com or (757) 446-8600.

HACKED: 5 THINGS TO KNOW ABOUT NEW DOD CYBERSECURITY REGULATIONS

In 2007, a preeminent American defense contractor first reported cyber attacks emanating from China. Four years later, upon a visit by then Secretary of Defense Robert Gates, the Chinese Air Force revealed a fighter jet unnervingly similar to the one manufactured by the hacked American contractor. More recently, the FBI reported in July 2015 that hackers accessed the personnel files and security clearances of over 22 million federal employees and contractors.

Accordingly, the Department of Defense (DOD) moved to strengthen the Defense Federal Acquisition Regulation Supplement (DFARS) concerning cybersecurity. The interim rule alters the contractual duties of government contractors and subcontractors in a significant manner. Thus, every government contractor and subcontractor ought to consider the following 5 highlights of the interim rule.

(1) Seriousness. The regulation is effective immediately. The DOD invoked “urgent and compelling reasons” to impose the change without the typical comment period. The comment period before final form remains open until October 26, 2015, however.

(2) Scope. First, the interim rule requires “adequate security” from “unauthorized access and disclosure,” an imposition yet undetermined in breadth. Second, the addition compels contractors to report to the DOD any cyber incident “adverse or potentially adverse” to the contractor’s information technology (IT) systems. The scope of what defines “adverse or potentially adverse” is unknown. Once a contractor or subcontractor reports an incident, the company must make all affected “media” available to government inspection. This includes physical devices such as laptops and cell phones as well as paper archives.

The DOD did clarify that the rule includes contracts for commercial items. Likewise, it covers non-confidential and proprietary information. Regulations applicable to confidential data remain unchanged. 

(3) Speed. The new regulation requires contractors and subcontractors to report cyber incidents within 72 hours of the attack.  The contractors owe their report to the DOD while the subcontractor must account to the prime contractor and to the DOD. Fortunately, though, the DOD will not consider such reporting, by itself, as evidence that a company has failed the rule’s security requirements.

(4) Savings? The DFARS modifications are similar in language and intent to those of another federal agency, one created specifically for IT security. As such, the interim rule is “tailored for use in protecting sensitive information residing in contractor information systems,” which could indicate potential savings for certain companies. Other companies, however, especially those without IT departments or IT experts, could experience increased costs. The DOD even admits that some 10,000 small businesses will require the help of IT experts to decipher cyber incidents, to determine the information affected, and to author the government report.  

(5) Service impact. Many contractors and subcontractors are moving their IT services to cloud computing. The interim rule applies to cloud computing, too. In fact, it compels companies to monitor their cloud to confirm the appropriate “administrative, technical, and physical safeguards.”

The broad nature of these DOD security requirements necessitates a precise and professional approach for government contractors. Vandeventer Black's Construction and Government Contracts Team attorneys are poised to help navigate those needs for our clients. Please visit the firm's website to learn more about the firm and our professionals at www.vanblacklaw.com.

 

New Minimum Wage Requirements under FAR 52.222-55

Below is a summary of the new minimum wage requirements of FAR Part 52.222-55 prepared by my law partner, Mike Sterling. The new requirements apply to all prime contractors and subcontractors working on new federal contracts after January 1, 2015.

 

 

Minimum Wages Under Executive Order 13658

You need to be aware of the new minimum wage requirements of FAR 52.222-55. This clause applies when it is included in a contract or modification by the agency as directed by FAR 22.1906. If the agency fails to include it there is a provision for retroactive application of the clause. FAR 22.1905(d)(4).

FAR 52.222-55 applies to almost all prime contractors and subcontractors working under “new” federal contracts after 1/1/15. The minimum wage is generally not retroactive to “old” contracts. However, it appears that the government views a bilateral modification extending a contract more than 6 months to be a new contact. Likewise, the government may also apply the clause to IDIQ contracts with more than 6 months of task or delivery orders remaining.

If you believe that the agency improperly included the clause you may ask the agency to remove it, but if included you must comply with it.  

If FAR 52.222-55 is included you must flow it down to subcontractors at every tier, and if added after award by modification you should take steps to obtain an equitable adjustment for you and your subcontractors. You should not sign a modification that waives your right to an adjustment.

The minimum wage applies to all contractor employees that spend more than 20% of their weekly hours working in “connection” with a federal contract, and regardless of the contractual relationship. Therefore, it may apply to someone in general administration or a 1099 independent contractor.

The minimum wage takes precedence over lower rates in wage determinations, collective bargaining agreements or apprentice programs. You cannot make up short wages with fringe or other benefits.

You must notify all workers of the requirements of the clause.