Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Smith Cashion & Orr Law Firm : Green Building & LEED Litigation

I am in San Francisco this week for the MidWinter Conference of the American Bar Association Forum on the Construction Industry.  The topic this year is "Government Construction Contracting" and I will be tweeting under the hashtag #ABAConstruct.

In news relevant to Federal contractors, construction industry players and Californians, the San Francisco Business Times reported yesterday on the approval of a $171 billion federal loan for the construction of a new transit center in San Francisco.  The loan is earmarked to pay for ramps to the Bay Bridge, a bus storage facility and the design of underground transit facility.  Good for the construction industry in California.  Other states are supposed to get some of the $8 billion set aside by the Obama administration for high-speed rail.

What can we learn from this report?  Almost every "construction news" feed that I follow includes some news article about the sustained decline in construction jobs.  There are also many reports about the stagnant hold on residential building.  Here's what I think:

• Federal and state projects will continue to represent the primary areas of growth within the construction industry for 2010.
• As those projects are the only ones available, there will continue to be increased competition for the limited work.
• There will continue to be an increase in bid protests and disputes arising out of these projects.

What do you foresee? 

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This weekend my eldest son turned six years old.  What right of passage does every six-year-old boy celebrate in the South?  He goes to a SEC football game.  And so we set out on Saturday evening for a little "guy time" with the Vanderbilt Commodores, hot dogs, nachos and popcorn.  My son was decked out in his new blue polo shirt sent from his O'Ma, while I had on my favorite red, slim-fitting AGC golf shirt.  The problem is ... Vandy's colors are black and gold!  Which means that you are summoned ... ordered ... required ... mandated ... dictated ... to wear either black or gold!  My lack of knowledge did not excuse my non-compliance with the black and gold ritual.  Imagine being the only person in the entire stadium with a red shirt.

If you are a federal contractor, don't be the only person with a red shirt.  Effective today, contractors and subcontractors will be required to use the E-Verify system to verify their employees’ eligibility to work in the United States. In the past, the government attempted to mandate the use of E-Verify, the web based system that employers can use to confirm the legal status of their employees. The proposed law was set to take effect in January of 2009. However, the legislation instigated much debate and several controversial provisions kept it from taking effect.

Although the amended proposal which takes effect today has significantly less bite, E-Verify has broadened in scope. Not only do the provisions apply to contractors and subcontractors on federal projects, but also to any business receiving funds under the federal stimulus project. For more details about E-Verify and some of the hot issues surrounding its controversial history, check out some of the following sites:

• Michael Payne's post on Federal Construction Contracting Blog, which gives a good overview of the law's applicability to certain contracts
• An extensive summary by Nixon Peabody attorneys Kent Jonas and Matthew Zandi
• An article by Federal Times about the federal district court in Maryland which found the  regulation to be legal
• A Wall Street Journal report on the 11th hour bid to overturn the law

Given the current state of the economy, more and more contractors are taking on public projects. For this reason, all contractors and subcontractors would be well advised to prepare for compliance with the mandated use of E-Verify.  Don't be the only one wearing a red shirt.

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