Government Contracts

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The COVID-19 pandemic continues to impact the construction industry, and many countries continue to implement new or more stringent restrictions on entry into their borders. Those travel restrictions can impact any company with cross-border supply chains or employee travel. This article addresses some of the travel restrictions in place in the United States, Canada, and members of the European Union (EU); exceptions to those requirements; and some best practices when navigating across borders.

Mealey’s International Arbitration Report – Nov. 2020
[Editor’s Note: Copyright # 2020, LexisNexis. All rights reserved.]
Commentary by Troutman Pepper Partner Albert Bates, Jr.

Mealey’s International Arbitration Report recently asked industry experts and leaders for their thoughts on what events had an impact on global economy that have led to an increase in filings. We would like to thank the following individuals for sharing their thoughts on this important issue.

  • Sarah Reynolds, Partner, Mayer Brown, Chicago
  • Peter A. Halprin, Partner, Pasich LLP, New York
  • Helen Conybeare Williams, Counsel & Solici­tor Advocate, Haynes and Boone LLP, London
  • Sandra Smith Thayer, Partner, Pasich LLP, Los Angeles
  • Lisa Houssiere, Principal, McKool Smith, Houston
  • Gene Burd, Partner, FisherBroyles, Washington
  • Albert Bates Jr., Partner, Troutman Pepper, Pittsburgh
  • Charlie Lightfoot, Co-chair of International Arbitration Practices and Managing Partner, Jenner & Block, London
  • Thomas Wingfield, Associate, Jenner & Block, London.

Gov. Wolf’s businesses closure orders and the business waiver process recently came under fire from the Western District of Pennsylvania Federal Court and the Pennsylvania Auditor General Eugene DePasquale. Gov. Wolf’s prior orders forced nearly all activities of the construction industry to cease in-person operations.

When is it going to return to “normal”? We all have been asking that question. Well, for the construction industry, it may never return to “normal.” COVID-19 may have permanently changed the landscape of the construction industry in many ways. Depending on your perspective, many changes could be for the better. We may have to alter how we do business to address some new issues and business concerns. Here are just a few issues that the pandemic has brought to the forefront of our industry.

This article was originally published in Government Construction (Volume 5, Issue 2 – Summer 2020), an ABA Division 13 Quarterly Newsletter. It is republished here with permission.

The United States Civilian Board of Contract Appeals (the “Board”) recently issued a decision that may be particularly pertinent in light of the COVID-19 pandemic. In Pernix Serka Joint Venture v. Department of State,1 the Board rejected a contractor’s claim for additional costs related to demobilization and remobilization of the job site in Freetown, Sierra Leone, due to an Ebola virus outbreak. The Pernix decision should put government contractors on notice that, depending on applicable contract language, federal contractors may be entitled to schedule relief, but not costs, as contractors deal with COVID-19 related impacts.

N. Plains Res. Council v. United States Army Corps of Eng’rs, No. 4:19-cv-00044-BMM, 2020 BL 35412 (9th Cir. May 14, 2020)

Oil and gas pipeline construction may no longer proceed under Nationwide Water Permit 12 (NWP 12). The Ninth Circuit, by way of a two-judge panel, denied challenges to a district court decision vacating NWP 12 and enjoining the United States Army Corps (Army Corps) from authorizing oil and gas pipeline construction projects pursuant to NWP 12. The Order, which was issued without an opinion, has national effect and set a briefing schedule for reconsideration of a motion for an administrative stay. N. Plains Res. Council v. United States Army Corps of Eng’rs, No. 4:19-cv-00044-BMM.

COVID-19 has created a severe disruption to the construction industry. Certain jurisdictions, including Boston, San Francisco and Pennsylvania, have placed restrictions on construction projects deemed “nonessential” and require waivers for certain projects to continue. Owners, contractors, suppliers and others may currently have more questions than answers. This article addresses some important concerns, and provides links to additional resources that more specifically address these concerns.

Precision Hydraulic Cylinders, Inc. v. Manufacturing. Technology, Inc., No. 7:18-CV-203-FL, 2019 BL 344743, 2019 U.S. Dist. LEXIS 156670 (E.D.N.C. Sept. 13, 2019)

Precision Hydraulic Cylinders, Inc. (“Precision”) issued a series of purchase orders to Manufacturing Technology, Inc. (“MTI”) to weld steel components together to create hydraulic cylinders. MTI agreed to develop welds for Precision’s small and large cylinders under two separate purchase orders.

Bribery and corruption have long plagued the construction industry, particularly in emerging markets in Latin America, Eastern Europe, the Middle East and Asia-Pacific. Large contracts often trickle down through layers of subcontractors and consultants, presenting opportunities for corruption at each level. The risk is enhanced in certain foreign jurisdictions where public officials may expect payment in exchange for state-issued licenses or government contracts.

Tampa D Fluor Enterprises, Inc. v. Duke Energy Florida, LLC, No. 8:19-cv-00224, 2019 BL 135007, at *1 (M.D. Fla. Apr. 16, 2019)

On April 16, 2019, a Florida federal court dismissed without prejudice Fluor Enterprises’ claim that Duke Energy wrongfully drew down a $67 million letter of credit issued in connection with Fluor’s construction of a gas-fired electrical generation facility in Citrus County, Florida.  In addition to the core breach of contract claim which suffered from several procedural issues, the court dismissed extra-contractual claims for conversion, civil theft, breach of the implied covenant of good faith and fair dealing, and violation of the Florida Deceptive and Unfair Trade Practices Act.