Volume 6 - Number 33 | August 18, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 33 | August 18, 2008

Volume 6 - Number 33 | August 18, 2008

Recent Issues

EDITOR'S NOTES | Issue 6-33: The recent federal minimum wage increase that upped the rate to $6.55 per hour from $5.85 is welcome relief to a few low-wage workers. However, with current gas pump woes and the Labor Department’s recent report stating that energy costs are up by 25 percent and food is up by five percent over figures from a year ago, a 70 cent raise doesn’t do much to ease the burdens of the working poor.

Though the wages are considerably higher, construction-related professionals are also feeling the pinch of rising costs and lower wages. The Bureau of Labor Statistics reports that steel workers earn $21.99 per hour or $45,730 per year (data based on a national average for 2007). According to a 2006 wage sheet published by the International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers, union workers for Local Union No. 7 earn $25.64 per hour. The local union implemented wage subsidies on certain projects to supplement members’ paychecks. However, Local 7 ran into trouble with non-union workers for some of the tactics it employed to secure union work. A federal appeals court was called in to determine antitrust liabilities and allegations of coercion.

Also this week, we revisit a case addressed earlier this year in which a low bidder, deemed nonresponsive, appealed the GAO’s decision to the federal claims court. Like the Comptroller General, the court determined that stockpiled coal does not satisfy a bid security requirement for a federal highway project. And finally, a contractor is assessed liquidated damages for late completion. Had it submitted proper paperwork and conducted contract-required tests, the late completion could have been avoided.

UNION WAGE SUBSIDIES PERMISSIBLE BUT COERCION IS NOT: A iron workers’ union gets approval to subsidize wages for its members, but it cannot use intimidation tactics or exert undue pressure on contractors to discourage use of non-union workers.

LOW BIDDER NOT ENTITLED TO SUBSTITUTE BID SECURITY ASSETS: Stockpiled coal totaling $191 million is no match against a U.S. federal claims court ruling that prohibits a low bidder from using the commodity as a bid security. The asset must have the ability to be placed in escrow.

SUBSTANTIAL COMPLETION REQUIRED COMPLIANT TEST REPORT: Paperwork errors and a missing compliancy test are at the crux of a contractor’s late completion and the ensuing liquidated damages.