construction subcontractor agreements
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Subcontractors selected for cancer center work.(REAL ESTATE ROUNDUP: Projects, developments and other activity in cities in and around San Diego … An article from: San Diego Business Journal $9.95 This digital document is an article from San Diego Business Journal, published by CBJ, L.P. on December 6, 2010. The length of the article is 474 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Subcontractors selected for cancer ce… |
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Nominated Subcontract NSC/4: Sub-contract for Sub-contractors Who Have Tendered on Tender NSC/1 and Executed Agreement NSC/2 and Have Been Nominated by Nomination NSC/3 … |
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UAE: Construction management contract award for planned seventh aluminum potline and associated casthouse includes selection of subcontractors, … on Mining, Metal Making and Conversion $5.95 This digital document is an article from WWP-Report on Mining, Metal Making and Conversion, published by Worldwide Projects, Inc. on September 1, 2004. The length of the article is 1554 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with an… |
Blending of Public and Private Construction – Proceed With Caution
Traditionally, New York Construction Law sets separate rules of engagement for public projects (where the owner is a public entity) and those that are private construction projects (where the owner is a private individual or corporation). Given these two distinct camps, it has been easy to classify a project as either a public project or a private one. For contractors, subcontractors and suppliers, knowing which rules of engagement pertain to them is essential to avoid making costly mistakes.
However, the clear distinction between private and public projects is now being blurred through recent ‘hybrid’ arrangements, which seek to combine aspects of private and public construction works in a single project. This creates a new grey area where these formerly separate formats overlap. As a result, the determination of whether the project is a federal public project, a state public project, or a private Construction Project has become a complex legal quandary.
These grey areas arise through the use of:
Extended Use Leasing (EUL) – Under Congressional authority, the military has been provided greater flexibility in leasing military property for maximized value, and allows for the leasing of federal property for private development.[1]
Public-Private Partnerships (PPP) – A contractual agreement between a public agency (federal, state or local) and a private sector entity. Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public.[2]
Federal Lease-Backs – A contractual agreement allowing a public entity to benefit from tax deductions normally available only to the private sector. Typically the public owners sell real property to private investors and simultaneously lease it back. The private entity puts equity into the property and in return gets rental payments and the tax benefits of ownership, which include interest deductions, depreciation deductions and, occasionally, investment tax credits.[3]
Although these ‘hybrid’ situations may indeed present attractive features for both the public and private sectors, there are potential risks to the private contractor, subcontractor, or supplier should the project or payments run into problems.
For example, should the contractor perform and fail to be paid for its work under New York Construction Law, in the traditional private context, the contractor may be able to pursue its claims under numerous theories, such as breach of contract, or to file and foreclose upon its mechanic’s lien. In a hybrid situation, in contrast, the contractor may be barred from filing an action against the federal or state government under the doctrine of sovereign immunity.[4],[5].
Further, as these types of hybrid projects may be located on federal property, state law may not apply, including those laws that provide the contractor, subcontractor and supplier protections under the New York Lien Law[6], or the New York Prompt Payment Act[7].
“Evaluating the applicability of such state laws to public-private partnerships would require a two-step analysis: First, a determination of whether the project is located on a federal enclave and, second, an interpretation of the state statute’s coverage by its own language… Thus even if not on federal land, a hybrid project may not be subject to (state) statute.”[8]
As the combination of public and private interests continue to develop through the use of the Enhanced Use Leasing, Public-Private Partnerships, and Lease-Backs, a precedent will be established through caselaw. This precedent will provide rules for contractors, subcontractors and suppliers to work under these formats with an understanding of their risks and protections. Until that time occurs, however, careful analysis of all the federal, state, and private rights, remedies and restrictions is required.
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[1] See 10 U.S.C. § 2667(a)
[2] The National Council for Public-Private Partnerships
[3] See Congressional Budget Office, Trends in Municipal Leasing
[4] Generally, without the federal or state governmental agency waiving its sovereign immunity rights, no action may be brought against it. See Gray v. Bell, 712 F.2d 490, 507 (D.C. Cir. 1983).
[5] sovereign immunity. (n.d.). Merriam-Webster’s Dictionary of Law. Retrieved August 27, 2011, from Dictionary.com website: http://dictionary.reference.com/browse/sovereign immunity
[6] N.Y. Lien Law
[7] N.Y. Gen. Bus. Law §§ 756 et seq.(private); N.Y. State Fin. Law §§ 139-f, 179-f (pt. of Art. 11-A);
Pub. Auth. Law § 2880, Gen.Mun. Law § 106-b; Hwy.Law § 3 8; NYC Procurement Policy Board Rules § 4-06. (public).
[8] Robert F. Carney & Lisa D. Sparks, Is It Public or Not? Whiteford Taylor Preston, Construction Update Summer 2010.
About the Author
The author, John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration, and is admitted to the courts of New York and Florida.
John Caravella is a member of the Suffolk County Real Property and Arbitration Committees, the Nassau County Bar Association Construction Law and Arbitration Committees, the American Institute of Architects, Long Island Chapter, the U.S. Green Building Council – Long Island Chapter, Advocacy Committee, as well as being appointed to the panel of Construction Industry Neutrals for the American Arbitration Association to serve as a construction arbitrator.
Mr. Caravella represents clients across New York and Florida, and can be reached at The Law Offices of John Caravella, P.C., via web: http://www.LIConstructionLaw.com
If a subcontractor does not pay his employee based on an oral agreement, can the employee sue the g.c.?
I have been working for a sub that does concrete, and the company that he is working for on this project is a large Construction Company. If he does not pay me what he UNOFFICIALLY PROMISED TO PAY ME BY ORAL AGREEMENT, can I sue the construction company?
He first told me that since this is a union contract, I’d be making $30/hour. then, after 2 weeks he changed it to $80/day. I still haven’t seen any money from him though.
Can I sue the General Contractor (the primary construction company) if I do not get paid?
I have been logging in on the General Construction company’s hour log, and they all know me from the 2 weeks I worked on the project.
if you are licensed sub contractor you can sue the G.C., if you are an employee of the concrete company you can sue him for unpaid wages however as long as he pays you minimum wage that’s all you are entitled to, that is the law unless you have a written and signed employment contract that says otherwise
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