Rendering courtesy of HNTB Subcontracting goal program compliance on the North Avenue Bridge, shown in rendering, are the subject of a continuing federal investigation. The prime contractor on a Chicago bridge project shuttled its employees to woman-owned steel and concrete subcontractors hired to comply with government hiring goal programs, and later rehired the same workers in 2006 and 2007, federal prosecutors charge.As part of the charges made last month against Elizabeth Perino, 57, the owner of two companies accused of serving as an illegal “pass-through” to help prime contractors fulfill subcontracting requirements for woman-owned businesses (WBEs) and disadvantaged businesses (DBEs)
Related Links: Marsh's Surety Report Arch Insurance Groups surety practice XL Surety Group Berkley Surety Group Surety capacity was increasing at the start of 2012, says Marsh Inc., the big brokerage.Driven by new and expanded surety underwriting firms, new underwriting approaches and increased limits from existing sureties, the trend could mean that obtaining surety bonds actually becomes easier this year. Among the companies that have entered, re-entered or are expanding their work in contract surety are XL, Arch and Berkley Surety Group.While most forecasts about surety in 2012 focused on increasing contractor defaults pasting higher losses on sureties, the surety
The default and temporary shutdown just before New Year's Day of ASI Ltd., a principal subcontractor on the $825-million Barclays Center in Brooklyn, N.Y., has delayed completion of the arena's enclosure and forced extra effort by the project's prime contractor, Hunt Construction Group, to keep on track for scheduled completion later this year.For Hunt, the default “is making their life a little difficult,” says Robert P. Sanna, director of construction for Forest City Ratner Cos., the developer.ASI's default “is untimely, to say the least,” Sanna says. But he adds that he is gratified to see all the parties involved cooperating
Efforts to restart projects stalled by the Libyan civil war have enmeshed Canadian engineer SNC-Lavalin in controversy and apparently triggered the dismissal of two of its top executives.On Feb. 9, the Montreal-based firm announced the dismissal related to "questions regarding the conduct" of two executives who have been "the focus of public attention." The company has not issued another statement or clarified how the two men’s efforts to assess and restart work on the Libyan projects may have violated company rules.SNC-Lavalin announced that Riadh Ben Aissa, executive vice president of construction and infrastructure, and Stephane Roy, vice president-controller for that
Related Links: Efforts To Restart Libyan Projects Land SNC-Lavalin in Controversy SNC-Lavalin says it is investigating $35 million in payments that were improperly made and recorded.The payments were made in the fourth quarter of 2011 and "were documented to construction projects to which they did not relate," the company said Feb. 28."The company is working with its external auditors and legal advisors to resolve all issues relating to the investigation," SNC-Lavalin said.The company also said that it has recorded greater-than-expected losses on its Libyan projects, which were stopped by the Libyan civil war, and that the firm's overall financial performance
Is it possible to save on costly "e-discovery"? Some attorneys are testing ways to head off runaway legal costs of construction lawsuits, including contract clauses ruling out e-mails as discoverable evidence.The idea is inviting because one of the biggest risks in a lawsuit is the size of the invoice that litigants receive from their own attorney.Propelled by the explosive growth of e-mail, litigation costs today run 20% to 30% higher than six years ago, say attorneys and insurance agents. The recession hasn't cut litigation and may actually provide more incentives for lawsuits, they say.Project team members already understand that the
The A.M. Best Co. sharply lowered to "weak" from "excellent" First Sealord Surety's credit rating, and the surety's apparent financial troubles have created problems for at least one general contractor with a few subs in default.Big sureties such as Travelers and Liberty Mutual have remained profitable through the economic downturn by sticking to tight underwriting standards. First Sealord, based in Villanova, Pa., serves contractors whose bonded contract value averages $429,000. Surety industry executives predict increasing defaults by small subcontractors in 2012.Sean Murphy, vice president of construction operations for Coastal Construction Group, Miami, says his company has a few subcontractors in
Related Links: Is Trouble at Surety First Sealord a Signal of Trouble Among Small Subcontractors? Before Pennsylvania determined that First Sealord Surety, the small surety shut down by the state on Feb. 8, was a financial wreck, the company fought costly legal battles in different states where it had provided bonds.The state Dept. of Insurance examines licensed companies in the state once every five years and First Sealord got a generally healthy report card from an examination in 2005. It isn't clear if that is the last time the Villanova, Pa.-based surety firm was examined.A.M. Best did not downgrade First
Is it possible to save on costly “e-discovery?”Some attorneys are testing ways to head off runaway legal costs in construction lawsuits, including contract clauses ruling out emails as discoverable evidence.The idea is inviting because one of the biggest risks in a lawsuit is the size of the invoice that arrives from your own attorney.Propelled by the explosive growth of email, litigation costs today run 20% to 30% higher than six years ago, say attorneys and insurance agents. And recession hasn’t cut litigation and may actually provide more incentives for lawsuits, they say.Project team members already understand that the ballooning number
iStockphoto Several construction contractor clients swore affidavits related to their switch to Alliant from Aon. Related Links: Disputed Shift By Insurance Brokers Entangles Contractor Clients A legal struggle between insurance and surety brokerages Aon and Alliant entered a new contentious phase on Jan. 17 as attorneys for both sides clashed in a Manhattan courtroom over e-mailed party invitations. The wrangling over the invitations is the latest episode in a complex battle over the alleged poaching of 60 employees and 100 accounts from Aon by Alliant.Had the party invitations been sent to contractors by a former Aon employee who switched last
