Following is a recent article written by Barney Kamine of Kamine Construction Law for the Engineering Contractors’ Association’s (ECA) magazine (published in their March, 2014 issue). Having represented the Engineering Contractors for the past 18 years, Mr. Kamine wanted to express his appreciation to the membership for Phil’s successess in representing ECA over the years.

What Has ECA’s Legislative Advocacy Done for You?

by Bernard Kamine, ECA Legal Counsel, February, 2014

ECA has used over $4,000,000 of construction industry advancement funds during the last two decades for legislative advocacy. What has that $200,000 per year achieved for ECA members? A whole lot more than it cost!

When was the last time you claimed entitlement to additional compensation because of a differing site condition? You were able to do so, because ECA spent 5 years through 3 legislative sessions getting Public Contract Code section 7104 enacted. That section requires a differing site conditions clause in every local public agency contract involving excavations deeper than 4 feet. Could one of the other contractor associations have done that? Probably. But none did, because differing site conditions is a problem mostly for pipelines and other work requiring deep excavations. Why did it take 5 years and 3 legislative sessions? Because public agency lobbyists killed the bill the first two times, so we had to find a way around their objections.

But there is more. The original section 7104 was patterned after federal regulations on differing site conditions. Subsection (a)(2) read only: “Subsurface or latent physical conditions at the site differing from those indicated.” As humans do, when this line was drawn, public agency folks looked for a way around it. Their tactic: claim that the geotechnical reports and other soil information made available to bidders was not part of the contract documents; therefore, that information was nothing “indicated” by the public agency. So ECA went back to the legislature in 2006 to change subsection (a)(2) to read: “Subsurface or latent physical conditions at the site differing from those indicated by information about the site made available to bidders prior to the deadline for submitting bids.”

When was the last time a public agency gave you notice of a claim that your crew had caused damage to property adjacent to your pipeline work? That notice allowed you to get your insurance carrier involved and maybe even to negotiate a settlement directly with the property owner. However, prior to 2002, local public agencies routinely just paid these claims (especially when a friend of a city councilman was the claimant), and then backcharged the contractor for the full amount paid. At that point, the contractor was stuck with whatever the agency had paid, and, worse, often could not get its insurance carrier to contribute anything. ECA changed that in 2002 by amending Public Contract Code section 9201 to add “(b) The public entity shall include provisions in a public works contract for timely notification of the contractor of receipt of any third-party claim relating to the contract.” Again, no other contractor association pursued this, because the problem mostly occurs on pipeline projects.

When was the last time a public agency threatened you with a false claims charge? To put a brake on such threats, in 1998, ECA got the California false claims statute amended to include “the state” and “a political subdivision” in Government Code section 12652(g)(9). That allows attorney fees to be awarded against the government for pursuing false claims that are clearly frivolous, clearly vexatious, or brought solely for purposes of harassment. Hundreds of thousands of dollars in attorney fees have been recovered against the City of Los Angeles and the Metropolitan Transportation Authority under this statue. Neither the federal statute nor any other state false claims statute allows the recovery of attorney fees against the government. So, it is not surprising that, in 2012, ECA had to fight efforts to delete this language from the statute. We caught that effort, because ECA monitors all bills that may affect ECA members interests.

Another false claims issue: The non-collusion affidavit ECA members submit with every bid was written in a 19th century style, including some garbled language, and some language that public agencies from time to time tried to use to make the bid, itself, support a false claim charge. In 2011, ECA got the section updated to the 21st century and, in the process, eliminated the language being used for false claims arguments.

Prior to 2000, public agencies could easily award contracts to favored bidders by including alternates in the bid, and, then, by manipulating which alternates were included in the awarded contract to make the favored contractor the lowest bidder. ECA stopped that by getting 3 provisions added to the Public Contract Code, sections 10126 (state contracts), 10780.5 (state university contracts), and 20103.8 (local agency contracts), which establish procedures for the use of alternates that prevents manipulating them after bid day to affect who is the lowest bidder.

ECA has obtained other legislation to buttress open, competitive bidding laws. In 1990, ECA got Public Contract Code section 100 enacted. That section makes it clear that competitive bidding is supposed to provide “all qualified bidders with a fair opportunity to enter the bidding process” and to eliminate “favoritism, fraud, and corruption in the awarding of public contracts.” In 2001, 2003 and 2009, ECA obtained amendments to Public Contract Code section 3400 specifying the notice public agencies have to give bidders when specifications contain sole-source provisions, and clearly defining when sole-sourcing is permitted. In 2002, ECA got Public Contract Code section 1601 enacted to allow agencies to experiment with methods and procedures to receive bids and contract-required submissions over the internet, but mandating electronic receipts to prove that the bid was submitted and the exact time when it was submitted.

ECA has obtained legislation to allow agencies to withhold stop payment notice money from retention, so it does not interfere with progress payments, and to allow simple releases of stop payment notices to facilitate settlements with stop payment notice claimants. Civil Code sections 3186 (1998) and 3262 (2005).

These successes are only the tip of the iceberg. ECA opposition to bills has saved ECA members from, literally, hundreds of legislative proposals pushed by environmentalists, unions and public agencies that would have dramatically increased the regulation and cost of doing business. ECA’s contacts in Sacramento have helped dozens of ECA members resolve problems with the Contractors State License Board and other state agencies, as well as provide access to Sacramento’s movers and shakers for ECA meetings and activities.Surely this effort has been worth the cost.