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Richmond District Legislative Meet and Greet

October 26, 2012
What an evening!  Over seventy-five AGCVA members and prospective members gathered for the opportunity to make their concerns known to the people who can make a difference.

The Richmond District hosted Legislative Meet and Greet 2012 at Willow Oaks Country Club on Wednesday, October 17th from 6-8pm.  Sam Stocks, District President (KBS Inc.) began the evening by thanking everyone for their attendance and supporting of the event.  He then introduced Bill Axselle of Williams Mullen who introduced all of the honored guests in attendance before introducing the evening’s guest speaker, Speaker of the House Bill Howell. 

The Speaker, Senator and Delegates were provided with copies of the district’s Hot Topics Impacting Commercial Construction which included:

  • Economy
  • Infrastructure Investment
  • Employee Misclassification (Independent Contractor)
  • Public Procurement
  • Stormwater

      
Speaker of The House Bill Howell

Honored guests in attendance for this all important event were: 

Speaker of The House Bill Howell, Senator Henry Marsh, Delegate John Cox, Delegate Riley Ingram,
Delegate Manoli Loupassi, Delegate Chris Peace and Delegate Roxann Robinson. 

A special thank you to Sam Stocks, District President; Ed Bowman, Legislative Meet & Greet 2012 Committee Chair; the members of the Legislative Meet & Greet 2012 committee, Executive Committee and Membership Committee for dedicating their time and effort to this event.

 



AGC Officers Meet With Senate Candidate

August 17, 2012
AGC’s Officers met with George Allen, Republican candidate for the U. S. Senate, at the AGC office on August 15 to discuss a variety of issues impacting the construction industry. Topics discussed that day include infrastructure investment, construction markets, regulatory excess, health care reform and unemployment in Virginia’s construction industry.

Immediate Past Chairman John Long (Lantz Construction Co), Vice Chairman Jack Dyer (Gulf Seaboard General Contractors), George Allen (Republican candidate for the U. S. Senate), Vice Chairman Elect Kevin Willis (Faulconer Construction Co) & AGC Chairman Stan Binsted (R E Lee & Son Inc)


Workers Comp Coverage Clarification

August 17, 2012
We have been advised by the Virginia Workers Compensation Commission that there is some confusion on when small contractors are required to provide workers compensation insurance coverage. Please see below for a detailed explanation from the Commission on the subject.  Click here for printable verison of the document below.


Certificates of Insurance – You can’t always get what you want.

By Independent Insurance Agents of Virginia
July 20, 2012

A certificate of insurance is an informational document issued by or on behalf of an insurance company.  The certificate indicates that an insurance policy exists at a certain time and provides the limits of the existing policy.   Certificates are solely snapshots of basic policy coverages and limits at the time of issuance of the certificate.  Certificates absolutely cannot modify coverage or change the terms of the insurance contract and they convey no contractual rights to the certificate holder.

As a subcontractor, you are no doubt often asked to sign construction or service contracts that include certain insurance requirements that must be evidenced by a certificate of insurance.  If the certificate holder desires status as an additional insured under your policy, this can only be done by endorsement to the policy – not by issuance of the certificate alone.

Problems often arise when a contract makes demands that are – for all practical purposes – impossible to meet.  Examples include requests for insurance for losses or damages that are uninsurable, requests that agents cannot legally comply with, requests that require inappropriate certificate wording, and requests that are impractical from a market standpoint.

As a result, insurance agents are sometimes asked to provide a certificate of insurance that cannot comply with the contract you may have already signed.  In fact, you may have already completed the job and need the certificate in order to get paid.  If you have completed the specified work and THEN are asked to produce a certificate of insurance, you will want to contact your independent insurance agent and industry organization.  Matters related to certificates of insurance should absolutely be resolved PRIOR TO starting work on a project.

The purpose of this article is to illustrate how such problems can arise and what solutions are available, if any, to address the most common problems related to certificates.  This has become most critical with the passage of House Bill 867 and Senate Bill 47 in the 2012 session of the Virginia General Assembly.

UNINSURABLE REQUESTS

Sometimes contracts will attempt to transfer risks and liabilities that are largely uninsurable.  For example, the contract may require you to be responsible for “ANY negligent acts, errors or omissions”  or “ANY and all liabilities” that result in “ANY claim, cost, expense, liability, penalty, or fine.”  A commercial general liability (CGL) policy typically does not cover “errors and omissions” or fines and penalties, nor will it pay for damages other than those arising from bodily injury, property damage, and personal and advertising injury liability.  In addition, the word “any” implies there are no exclusions when, in fact, the policy has many exclusions ranging from pollution liability to faulty workmanship.

Needless to say, it is essential to have an attorney review contracts on your behalf.  In addition, prior to signing any contract, have your independent insurance agent review the insurance specifications, preferably in conjunction with your attorney.  They can advise what requirements may be impossible or difficult to insure.  It is important to know the costs before bidding on the contract and it’s possible that truly onerous insurance requirements can be deleted from the contract.

Often contracts will require your insurance to be “primary and noncontributory.”  The “ISO standard” CGL policy does say that it is primary with regard to the certificate holder’s general liability policy IF the certificate holder is an additional insured on your policy.  So, the first order of business is to make sure that the appropriate additional insured endorsement is attached to your CGL policy.

However, on its own the undefined term “noncontributory” is meaningless.  The term may just be used to reemphasize that your insurance is primary, which is fine.  Or the intended meaning may be that a waiver of subrogation endorsement is desired.  However, often it means that the certificate holder’s CGL policy will not contribute in any way to a loss even if that policy otherwise covers it.  This means that you will have to pay out of your own pocket any claim that exceeds the limit of your CGL policy without contribution from the certificate holder’s CGL policy.

It is in your best interest to attempt to clarify and, if necessary, strike the “noncontributory” wording from the contract.  If that’s impossible, consider increasing your own policy limits or be prepared to assume a potentially large uninsured loss.

ILLEGAL REQUESTS

Construction contractors sometimes require that the certificate holder be given additional insured status under a specific endorsement number and edition date.  It is not uncommon for a contract to request an “ISO standard” policy form such as the CG 20 10 11 85 additional insured endorsement.  Note that “11 85” refers to the November 1985 edition of this form.  It could be impossible to for the insurer to provide a form that is 20+ years old and is no longer approved by the form publisher.  In other states where you may be working, forms may need to be approved in advance and, once replaced, old forms are withdrawn and cannot be used.  To insist on the use of a withdrawn form may be considered an illegal act.

Your independent insurance agent can often provide a current form with comparable coverage.  In some cases, two endorsements might be necessary to replace a single older form – one providing ongoing operations coverage and the other for completed operations coverage.

The latter form, however, might not be available or only available at significant cost.  Your independent insurance agent will represent more than one insurance company, making it more likely that your account can be shopped to another insurer who is better able to meet your needs.  In any event, you will want to price this coverage before submitting your bid since completed operations insurance, if available, can be substantial in price.

Also, contracts frequently mandate that coverage be extended to the additional insured’s sole negligence.  In some states, sole negligence cannot be legally transferred to another party.  Increasingly, even where insurance transfer is permitted, insurers are using additional insured endorsements that prohibit assuming the additional insured’s sole negligence.  The current “ISO standard” endorsements do just that.

If you are working in a state that has anti-indemnity statutes or case law, then this should not be an issue.  Otherwise, you will want your independent insurance agent to determine if the insurer is still willing to assume sole negligence under an additional insured endorsement.  If not, the contract will need to be modified or compliance will be impossible.

INAPPROPRIATE REQUESTS

Contracts often specify that the certificate of insurance provide for notice of cancellation to the certificate holder.  The problem is that all “ISO standard” additional insured endorsements make no provision for cancellation notice to an additional insured.  Perhaps acknowledging this, some contracts settle for the more hopeful “endeavor to” provide notice of cancellation provision.

Keep in mind that, unless the policy specifically provides for cancellation notice to the additional insured, the insurer is usually under no contractual obligation to provide such notice. Even if an attempt is voluntarily made, mistakes happen.  In some cases, due to regulatory decree by the state department of insurance (Virginia and New York for example), a certificate of insurance cannot make a promise of notification unless notice of cancellation is provided for in the policy or endorsement.

Some organizations and government entities use their own certificates of insurance instead of the more standardized ACCORD 25  – Certificates of Liability Insurance form.  These may create problems for insurance agents because some states have laws or regulations prohibiting the use of such forms unless approved by the state department of insurance.  Regardless, forms that are revoked by the publisher cannot be used.

Old forms may include wording implying coverage or rights that don’t actually exist under the policy, again violating the law in many states (including Virginia).  These certificates may sometimes be almost exact duplicates of the “ACORD standard” form(s), creating copyright violation possibilities.  They may also lack disclaimers designed to protect you and the issuer.

Be very wary of these non-ACORD certificates of insurance.  Rely on your independent insurance agent for guidance on how to handle these forms.  In many cases, they can be issued, but require referral to the insurance company which can cause delays.  Again, it is important to involve your independent insurance agent in the process as soon as possible.

IMPRACTICAL REQUESTS

The construction contract may specify that certain coverage (e.g., completed operations) be provided or that certain exclusions (e.g., pollution liability) be removed.  Because of the proliferation of defective workmanship claims in the construction industry, completed operations coverage may be difficult to procure at a reasonable cost.  Most insurers are unwilling to remove certain exclusions such as pollution liability and the cost to purchase the coverage separately may be prohibitive.

Be sure to give your independent insurance agent ample time to search for the coverages required by your construction contracts.  If coverage is available, you will want to include the premium costs in your contract bid.  If coverages are not available, you may be able to negotiate such requirements from the contract or pursue another source of coverage.

It is not uncommon for your insurance agent to be unable to meet every requirement of the contract you’re being asked to sign, from the standpoint of coverages, policy rights, or completion of a certificate of insurance.  The other party to the contract may then inform you that they can provide a list of agents who claim they can comply with the contractual requirements in full.

While it’s possible that the person requesting the certificate is aware of agents who are better able to comply with their requests, be cognizant that fraud and misrepresentation with regard to certificates is not unheard of.  If you are requiring certificates from subcontractors, be aware that bogus certificates do exist.

While it is rare, there are unfortunately some insurance agents who will issue certificates that do not accurately reflect coverages and policy terms just to allow a contractor to get a job and for them to keep their business.  Since certificates are rarely legally enforceable against insurers or agents, you may be incurring significant liability if an inaccurate certificate is issued.  It is important that you do business with insurance professionals in which you have great trust or that you verify the accuracy of the certificate.

As outlined in this discussion, the single best thing you can do in dealing with certificates of insurance requirements is to involve your trusted independent insurance agent in the process as soon as possible.  They can counsel you on how to best meet your insurance requirements and, if not possible in some instances, provide an explanation as to why something is difficult or impossible, often to the satisfaction of the requestor.

Founded in 1898, Independent Insurance Agents of Virginia is part of the nation’s oldest and largest associations of independent insurance agents, representing a network of more than 300,000 agents and agency employees nationwide and over 7,000 in the Commonwealth of Virginia.  Its members are insurance businesses that offer customers a choice of policies from a variety of insurance companies.  Independent agents offer all lines of insurance – property, casualty, life, health, employee benefit plans and retirement products.  Web address:  www.iiav.com and nationally www.independentagent.com


President Signs MAP-21

July 9, 2012

At a recent White House East Room ceremony, President Obama signed the Moving Ahead for the 21st Century Act (MAP-21). Congress passed the transportation reauthorization legislation just in time to beat the June 30, 2012, expiration date. A one week extension (the tenth of its kind) was also approved to allow time for the legislation to be filed in the proper format. MAP-21 extends highway and transit program authorization for 27-months – through the end of FY 2014 – and keeps funding at current levels with a modest inflation boost (1.4 percent) in FY 2013 and 2014. Authority to collect the Federal motors fuels tax is also extended through the end of FY 2016.


Project Labor Agreement Defeated

June 8, 2012

The construction industry and other groups recently prevailed in an effort to prevent imposition of a Project Labor Agreement on the Dulles Rail Project, Phase 2. 

The Metropolitan Washington Airports Authority (MWAA) voted, overwhelmingly by an 11-1 margin , to remove the preference in the bidding process for those companies who agreed to a Project Labor Agreement for the Dulles Rail Phase Two project.  

This follows defeat of an earlier proposal by MWAA to require use of a Project Labor Agreement on the project.

MWAA, with close ties to national unions, was promoting union preferences that would have precluded the hiring of almost all Virginia companies.  This second attempt by MWAA would have given a 10% scoring incentive to union companies in awarding a contract.  


Meeting with Congressman Jim Moran

June 8, 2012

AGC CEO Steve Vermillion met with Congressman Jim Moran this week to thank him for his support on some construction issues.  The discussion also focused on construction markets in the Commonwealth, and the pressing need for infrastructure investment and other matters impacting the construction industry 
 


NLRB’s “Quickie Election” Rule Deemed Invalid for Lack of Quorum

May 25, 2012

The National Labor Relations Board’s (NLRB or Board) new rule revising election procedures in union representation cases is invalid, the U.S. District Court for the District of Columbia ruled May 14. The rule, often called the “quickie election” or “ambush election” rule because it expedites the election process to unions’ advantage, took effect on April 30.  The Board has suspended implementation of the rule and is expected to revert back to procedures in effect before April 30.

The U.S. Chamber of Commerce and the Coalition for a Democratic Workplace (CDW), both of which AGC is a member, brought the lawsuit challenging the rule on several procedural and substantive counts.  The court ruled on only one of those counts, finding that the Board lacked the necessary quorum when it voted to adopt the final rule. 

This case represents a significant victory for AGC-supported CDW and is the second big victory against the NLRB in a month.  CDW and co-plaintiffs persuaded the U.S. Court of Appeals for the District of Columbia Circuit to issue an order on April 18 enjoining a rule issued by the Board to require employers to post certain notices of employee rights under the National Labor Relations Act. 

For more information, contact Denise Gold, Associate General Counsel, at (703) 837-5326 or goldd@agc.org


Clean Water Act Section 404 ‘Nationwide Permits’
Reissued with Minor Changes

April 26, 2012

The U.S. Army Corps of Engineers (Corps) recently reissued 48 nationwide permits (NWPs) and issued two new ones to authorize a variety of construction operations that have minimal impact on waters and wetlands.  Most of the reissued nationwide permits have no major changes from 2007, the last time they were authorized.  The 2012 NWPs took effect March 19 and are valid for five years.

NWPs are general permits issued by the Corps under Clean Water Act Section 404.  They authorize (on a nationwide basis) discharges of dredged or fill material into waters of the United States, including activities associated with road crossings, utility lines, stormwater management, wetland and stream restoration, coal mining and now renewable energy generation.

The Corps intends for the NWPs to provide “timely authorizations for the regulated public” and to “reduce administrative burdens on the Corps and the regulated public by efficiently authorizing activities that have minimal adverse environmental effects.”  But NWPs are valid only if all the terms and conditions are met. Otherwise, an individual (or in some cases regional) permit is required.  Separate local permits and authorization also may be required.

Some highlights of the 2012 NWPs (see 77 Fed. Reg. 10,184, Feb. 21, 2012) include the following:

Two New NWPs for Renewable Energy Projects. The Corps issued two new NWPs for “Land Based Renewable Energy General Facilities” and “Water Based Renewable Energy Generation Pilot Projects,” NWPs 51 and 52, respectively. NWP 51 (land based renewable energy facilities) – authorizes construction, expansion or modification of land-based renewable energy production facilities. NWP 52 (water based renewable energy projects, including water based wind or hydrokinetic projects) – authorizes construction, expansion, modification, or removal of water-based wind or hydrokinetic renewable energy generation pilot projects.  Under both NWPs 51 and 52, pre-construction notification (PCN) is required for all activities.  In addition, permanent impacts (loss) of waters cannot exceed 0.5 acre or 300 linear feet (the 300 linear foot limit may be waived by the Corps, following coordination with other regulatory agencies).

With respect to NWPs 51 and 52, the Corps also provided important clarifications for related linear features.  Specifically, for linear features connecting to these facilities (such as transmission lines, pipelines or roads), each “separate and distant” crossing of a waterbody constitutes a separate and complete linear project that may be authorized under NWP 12.  Accordingly, NWPs 51 and 52 (and potentially other NWPs) may be used for a renewable energy facility, and NWP 12 may be separately used for each waterbody crossing by linear features serving the facility, provided each crossing is at a “separate and distant” location.

Revoked NWP.  NWP 47 (time sensitive inspections and repairs of pipelines) was not reissued. However, NWP 3 (maintenance) and NWP 12 (utility lines) will still offer coverage for many utility line projects.

Notable NWP Changes.  One of the reissued permits, NWP 21 (surface coal mining activities), for the first time prohibits “valley fills” that typically have been used to dispose of surface mining waste in mountain stream valleys.  The updated permit limits stream impacts to 0.5 acre and 300 linear feet of stream bed, consistent with the other NWPs. These limits cannot be waived for perennial streams (although the Corps’ district engineer could grant a waiver for ephemeral and intermittent streams).  Previous versions of NWP 21 did not have any acreage or linear foot limits, and relied solely on the pre-construction notification review process and permit conditions to reduce adverse effects on the aquatic environment to satisfy the minimal adverse environmental effects requirement for general permits. Activities that were authorized by the 2007 NWP 21 may be reauthorized without applying the new limits if the permittee submits a written request for reauthorization by Feb. 1, 2013.

Other notable NWP changes include—

NWP 3 (Maintenance) – Added the ability to place new or additional rip-rap to protect an existing, serviceable structure (previously limited to staying within the original structure’s footprint or size).  

NWP 12 (Utility lines) – Added new interagency coordination requirements for NOAA (in navigable waters) and for DOD (for overhead lines that could affect military activities).  

NWP 29 (Residential) and NWP 39 (Commercial/Institutional) – The impact limits remain at 0.5 acre and 300 linear feet of stream bed.  However, to receive a waiver to exceed the 300 linear foot limit on permanent impacts (loss) to waters (and still qualify for a NWP), the applicant has to provide written justification of why the waiver should be granted, i.e., why impacts are minimal.  

NWP 43 (Stormwater Management Facilities) – Clarified that stormwater facilities that that meet the definition of ‘waste treatment systems’ under 33 CFR 328.3(a)(8) are NOT waters of the U.S. and 404 permits are not required for maintenance of these. Added the requirement for low impact development (LID) features. Also: in order to receive a waiver to exceed the 300 linear foot limit on permanent impacts (loss) to waters (and still qualify for a NWP), the applicant has to provide written justification of why the waiver should be granted, i.e., why impacts are minimal.

For most of the NWPs, the Corps retained the acreage thresholds and special conditions, in most cases, and did not increase the stringency of most of the general conditions.

Mitigation.  All NWPs continue to require mitigation for all unavoidable impacts to waters or wetlands.  The final rule clarifies that the Corps may require compensatory mitigation only for those portions of projects that are subject to the Corps’s regulatory jurisdiction.  Compensatory mitigation to offset the loss of aquatic resources must comply with the Corps’s 2008 mitigation rule, which is codified at 33 C.F.R. Part 332.  The final rule requires that District Engineers determine appropriate and practical mitigation to ensure that adverse effects on the environment are minimal, but also provides the District Engineer with some discretion.  The circumstances under which mitigation would or would not be required for NWPs are discussed extensively in General Condition 23.

Transition to 2012 NWPs  

If a permittee had a valid NWP and was working (or under contract to start work) on or before March 18, 2012, then the permittee has one year (until March 2013) to complete their work in waters (including finishing any mitigation or restoration that requires work in waters).  These projects are being “grandfathered in” under the 2007 NWPs and associated general and regional conditions.

If a permittee cannot complete all impacts to waters by March 2013, then they will need to REAPPLY under the new 2012 NWPs for the any portion of the work that is not finished by March 2013.


For More Information

For more detail on the NWPs re-issuance, click on the website links below  
·         2012 Nationwide Permits – Summary Table (provides limits on allowable impacts, notification requirements, and major changes since 2007)
·         2012 Nationwide Permits – Fact Sheet
·         2012 Nationwide Permits – News Release
·         2012 Nationwide Permits – Q&A
·         2012 Nationwide Permits – Federal Register Notice (text of the new NWPs begins on page 10,269)
  ·         U.S. Army Corps of Engineers Nationwide Permit Information


If you have additional questions, please contact Leah Pilconis at pilconisl@agc.org.


AGC Contribution to Congressman Wittman

February 2012
An AGC of America PAC contribution to Virginia 1st Congressional district representative Rob Wittman was made by Virginia Peninsula AGC representatives on February 21 in Williamsburg. Peninsula AGC President Lisa Emde, Bay Side Contracting, Inc.; Peninsula AGC 1st Vice President Matt Stauch, Branscome Inc and AGC Executive Director Dick Moyers made the presentation following a discussion of political issues with Congressman Wittman and a briefing from the Congressman on issues of current concern on Capitol Hill. Wittman is a strong advocate for the construction industry and a very pro-business politician in Washington.



Left to Right: Peninsula AGCVA 1st Vice President Matt Stauch, Branscome Inc, Virginia 1st Congressional District representative Rob Wittman and Peninsula AGCVA President Lisa Emde, Bay Side Contracting, Inc. making the presentation to Congressman Wittman in Branscome Inc's Williamsburg office.


Ban on Truck Driver Use of Hand Held Mobile Phones

Courtesy of AGC of America
January 2012

US DOT has issued a final rule that restricts the use of hand-held mobile telephones by interstate commercial motor vehicle drivers (CMV) and interstate hazmat drivers beginning January 3, 2012. The rule does not restrict or prohibit the use of hands free devices.  The rule does not currently apply to CMV drivers that do not cross state lines; however, states are required to adopt the requirements within three years as a condition for continuing to receive Federal Motor Carrier Safety Assistance grants.

The final rule prohibits CMV drivers from holding, dialing, or reaching for a hand-held cellular phone, including push to talk functions.  The definition of dialing allows the driver to initiate, answer, or terminate a call by touching a single button on a mobile telephone or on a headset. The definition of reaching requires that the hands free device be in “close proximity” to the driver.

CMV drivers who are convicted of a hand-held cell violation twice within a three year period will be disqualified from driving for 60 days. Drivers convicted of a third violation within three years, will be disqualified from driving for 120 days. Violations are also subject federal civil penalties of up to $2,750 per violation. Motor carriers (employers) that allow their drivers to use hand-held cell phones while operating a CMV face a maximum civil penalty of $11,000 per violation. Employers are responsible for the action of their drivers regardless of whether or not such actions are sanctioned.

 
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