Settlement Strategy Is More Important Than Litigation Strategy

In the world of federal government contract disputes, a great deal of time is frequently spent drafting a request for equitable adjustment (REA) or a claim under the Contract Disputes Act. Both of these actions are often a prelude to litigation and, when the parties cannot agree to an amicable resolution, lead, inevitably, to a trial. Once this pro...
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Specially Fabricated Materials Can Affect the Construction Supply Chain

Construction projects sometimes require materials that are not stocked by suppliers and that require special fabrication to make them suitable for certain fixtures. Specialized materials can be both expensive and difficult to obtain, said Sam Smith, regional finance manager at Crescent Electric Supply Company (East Dubuque, IL). In addition, these ...
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Senate’s Bankruptcy Threshold Adjustment and Technical Corrections Act Retains $7.5 Million Eligibility for Subchapter V Small Business Debtors

The Small Business Reorganization Act (SBRA) went into effect on Feb. 19, 2020, creating Subchapter V of the Bankruptcy Code. Acknowledging that a bankruptcy proceeding is not "one size fits all" and that a Chapter 11 proceeding can be prohibitively expensive and lengthy for a business, the goal of the SBRA was to reduce costs and increase efficien...
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Grand Jury Indicts Former COO of Major St. Louis Construction Firm in Alleged Fraud Scheme

The federal grand jury recently indicted Brian Kowert, Sr., former chief operating officer of HBD Construction Company, for five counts of wire fraud related to falsifying the company's participation with a minority business enterprise (MBE) on several construction and redevelopment projects from 2014 through 2022, according to the U.S. Department ...
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The Risks of Selling to Unlicensed Contractors

What happens if you find yourself working with an unlicensed contractor? Or your customer's customer—perhaps, the general contractor—is unlicensed? Understanding the risks beforehand and the steps for mitigating them will help you avoid unnecessary headaches.Even if your company has contracted with a licensed party in the supply chain, are you sure...
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Pay-if-Pay Clauses May Be Eliminated in Virginia

Pay-if-pay clauses may be eliminated soon in public and private construction contracts in Virginia. The Virginia General Assembly has approved a new law known as Senate Bill 550 that would make a general contractor individually liable for the entire amount owed to any subcontractor.Payment by the owner shall not be a condition precedent to payment ...
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March CMI Indicates Economic Resiliency to Russia-Ukraine Conflict

The March NACM Credit Managers' Index shows resiliency despite the widespread economic uncertainty that followed Russia's invasion of Ukraine in late February. This month's combined score rose 1.1 points to 58.9.However, rising commodity prices and supply-chain disruptions relating to the ongoing conflict may soon start to weigh heavily on business...
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Tribal Construction Projects: How They Differ and How You Can Stay Protected

More opportunities to participate in tribal construction projects could be on the horizon. The Infrastructure Investment and Jobs Act legislation passed in November includes more than $13 billion for tribal communities across the country, and makes them eligible for billions more, according to a White House statement."The trends in tribal construct...
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Construction Outlook Predicts Continued Inflation and Steep Material Prices

Supply-chain disruptions and labor shortages have led to significant increases in inflation and prices in the construction industry. And more disruptions may be on the horizon due to the conflict between Russia and the Ukraine, said Amy Crews Cutts, Ph.D., CBE, NACM economist, during the NACM webinar, U.S. Construction Outlook: Workforce Worries, P...
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More Inflation and Delays Expected to Drive Up Construction Prices

Inflation continues to takes its toll on the construction industry—fueled by spikes in commodity prices, supply chain disruptions and material delays. Sanctions on Russia, due to its invasion of Ukraine, have led to a further rise in pricing and supply disruptions. And the sum of these issues is expected to affect all parties along the contractual ...
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Personal Guarantees Provide Payment Leverage

Nearly 69% of credit professionals who responded to a recent eNews poll request a personal guarantee on a case-by-case basis, while 17% never require them. A personal guarantee is a legal promise by an individual to repay credit issued to a business, should the business not repay the debt. Personal guarantees provide an extra level of protection to...
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Building Stronger Business Relationships Through Customer Visits

Visits to customers are an essential practice for credit professionals who want to build stronger business relationships with them as well as learn more about how their business operates.Credit is a relationship business, said Mark Zavras, CICP, director of credit for Sub-Zero Group, Inc. (Scottsdale, AZ). "When I go on customer visits, I try to le...
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Oklahoma Case Illustrates Importance of Contract Reviews

The Supreme Court of Oklahoma recently determined a subcontractor's decision to waive its rights and claims does not automatically bar sub-subcontractors from filing a lien for unpaid invoices. In H2K Technologies, Inc. v. WSP USA, Inc., the Supreme Court reversed and remanded the trial court's decision for further proceedings."H2K was well within ...
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Initiative Targets California Publicly Funded Construction Projects

Publicly funded construction sites in California must comply with workers' compensation requirements and labor laws, according to a California Department of Industrial Relations (DIR) Labor Enforcement Task Force (LETF) announcement.This initiative targets the proliferation of California's "'underground economy' as it pertains to public constructio...
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Your Customer’s Payment Doesn’t Match the Invoice, Now What?

It's the time you've been waiting for; the end of the order-to-cash cycle. You receive your customer's payment. But wait … the amount does not match the statement. Sound familiar? Payment overages and shortages are more common than you might think, said Paulyne VanderSloot, CCE, CICP, credit manager with Mutual Materials Co. (Bellevue, WA)."When a ...
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Common Excuses for Nonpayment and What to Do About Them

Customers that don't pay on time often provide excuses when it comes time to follow up. "We never received an invoice" was the No. 1 answer (88%) for not paying on time, according to a recent eNews poll. The second most-common excuse (78%) was "We cannot pay until our customer pays us."Other excuses included:The invoice is incorrect. (45%)The mater...
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Bankruptcy Case Highlights Importance of Perfecting Your Lien on Time

Although it is important for suppliers and subcontractors to maintain positive working relationships with their customers, they also must do their due diligence when securing their lien rights and follow appropriate state statutes, as a recent California appellate case illustrates.The Facts of the CaseIn July 2018, Philmont Management Inc. filed a ...
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Understanding the Unique Nature of Public Construction Projects

Public construction is unique in that receivables are secured by payment bonds posted by the general contractor. Public construction projects are either owned by the federal government or state governments, and with the passage of the $1.2 trillion infrastructure bill that means more of these types of projects will become a reality.Suppliers and su...
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Use Lien Waivers Wisely

Waiving lien rights on a property during the course of a project might be common, but suppliers and subcontractors must pay close attention to the language in their lien waivers to remain protected against nonpayment—especially when waiving lien rights in connection with partial payments. Before signing a lien waiver after receiving a partial payme...
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New Orders, Production and Employment Grow as Supplier Deliveries Slow Further

The November Purchasing Managers Index (PMI®) registered 61.1%, up 0.3 percentage points from October. Economic activity in the manufacturing sector grew for 18-consecutive months, according to the November Manufacturing Institute for Supply Management® (ISM®) Report On Business®. The report is based on survey responses from U.S. supply executives ...
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