Pay Attention to the Details
By Ashley J. Sherwood, Esq.,
Oles Morrison Rinker & Baker LLP
Contractors and suppliers working on federal government projects are likely familiar with the trials and tribulations associated with preserving and exercising rights under the Federal Miller Act (40 U.S.C. § 3131–3134). Whether a claim was timely, what costs may be included in the claim, and whether notice was in the proper form are frequently litigated issues that can make or break your Miller Act claim. However, there is a significant threshold issue that some contractors and suppliers may be overlooking — who may exercise Miller Act rights?
The canned response is that the Miller Act protects only those persons who have a contractual agreement with a prime contractor or subcontractor on a federal project. A person supplying labor or materials to a subcontractor in a Prime Contractor – Subcontractor – Supplier relationship has Miller Act rights, while persons supplying labor or materials to a materialman in a Prime Contractor – Materialman — Supplier relationship do not.
But how do you know whether the party you are supplying materials to is a subcontractor or a materialman? Does labeling someone a “subcontractor” in the contract documents automatically make them such under the Miller Act? What if the materials provided constitute a significant portion of the overall contract price? Whether the “middleman” is a subcontractor or materialman is a crucial determination which directly impacts whether a supplier may pursue a claim under the Miller Act.
In an effort to create consistency, federal courts have adopted a list of twelve factors to be used in
determining whether a party qualifies as a subcontractor or materialman. The more “YES’s” a court can give to each question, the more likely a party is considered a subcontractor.
1. Is the product supplied custom fabricated?
2. Is the product supplied part of a larger, complex integrated system?
3. Is there a close financial interrelationship between the prime and the middleman?
4. Is there a continuing relationship between the prime and the middleman – i.e., periodic shop drawing approval or a requirement that a representative be on-site?
5. Is the middleman required to perform work on-site?
6. Is the term “subcontractor” used in the agreement?
7. Does the middleman’s contract constitute a significant portion of the prime contract (i.e., 15% or more)?
8. Is there a contract for labor in addition to a contract for materials?
9. Is the middleman responsible for furnishing all of the particular material?
10. Is the middleman required to post a performance bond?
11. Is there a contractual mechanism for back charging the middleman for the cost of correcting
12. Is payment made on a progressive basis (i.e., payment applications)?
No one factor is dispositive and there is no minimum number of factors a party must meet in order to
qualify as a subcontractor. Rather, the court’s inquiry is a factual determination and courts examine the nature of the prime contractor - middleman relationship on a case by case basis. Such a circumstance-specific approach should be a warning to both contractors and suppliers. Before challenging a claim or abandoning your rights under the assumption the middleman is considered
a materialman, consider the above factors and determine whether the situation may truly afford protections under the Miller Act.
Interested in more legal tips? Don't miss our Legal Bites & Bagels session this Wednesday from 7:30 - 8:30 AM at our offices. Breakfast and updates in construction law will be provided!
President, The Engagement Effect
Strengthening safety culture by analyzing close calls The classical definition of “safety” is to identify and mitigate hazards. Traditional (compliance-based) safety programs are largely focused on these activities. Almost the entire emphasis of Occupational Safety and Health Administration (OSHA) efforts are based on hazard recognition and abatement. Most safety training is based on these concepts — certainly all compliance-based training, such as fall protection or electrical safety — but so is a lot of other training, such as the OSHA 10-hour and 30-hour Outreach Programs. In fact, the stated purpose is: “The OSHA Outreach Training Program for the Construction Industry teaches construction workers about their rights, employer responsibilities and how to file a complaint as well as how to identify, abate, avoid and prevent job-related hazards.” Certainly the foundation of any solid safety program is having all the basic elements of compliance and hazard abatement in place. But to go to the next step, to achieve safety excellence, requires much more than that.
Developing a strong safety climate at the construction job site takes careful thought, focused efforts and lots of attention. Another way to think about safety is to get people to change their behaviors — obviously no easy task. Resistance to change is a universal human condition, but resistance to safety change seems even more deep-seated. That resistance is built over time through a number of factors resulting in most adults believing they are “safe enough.” Combine that with two other factors: Most safety messages are negative (e.g. “you shouldn’t have been doing that” or “put on your PPE”), and much safety training is boring and repetitive. The result is that most adults think they are safe enough and have little motivation to put much effort into improving their safety. It’s no wonder that trying to get workers to change their safety behaviors is quite an uphill battle. You can make workers wear personal protective equipment in front of a supervisor, but can you make workers wear PPE when the supervisor is not around? Or wear their PPE when they are mowing the lawn or working on their own roof? The answer is obviously no; only they can make that decision.
One of the ways to help people change is to help them understand that despite not having a serious injury on the job for the past 20 years, in fact, over the course of their lifetime, they have been hurt — maybe not on the job — but they have been hurt. When asked, most adults report having about three to seven major injuries, 20 or more total stitches, sprains and strains, thousands of minor injuries — not counting the close calls they have had. Developing a robust process for near-accidents can help begin the shift toward behavior change and personal responsibility. Ask a group of workers, “Suppose someone slips and falls in a far corner of the construction site, what is the first thing a lot of people do before they get up?” Many will reply, “Look around to see if anyone saw it.” Because if no one saw you, it didn’t happen, right? Or how many people have missed the last step on a flight of stairs and stumbled, then looked around to see if anyone saw them? Those little slips, trips, falls and mistakes are not life-threatening, unless of course there is enough hazardous energy present. For instance, a trip at the top of the stairs can have a much different outcome than on the last step. Or a two-second micro sleep in front of the TV set is much different than having a two-second nap while driving on the Seward Highway at 65 mph. When people can freely discuss their near accidents and close calls, they can begin to explore their states and errors. Perhaps they were rushing, frustrated or tired and failed to self-trigger on the state. Or perhaps complacency played a role, in which case we can work on our habits. Not every close call should be elevated to the level of writing up a report and investigating. In fact, probably 95 percent of the small mistakes and errors that we make daily would overwhelm any kind of tracking system, but they afford an opportunity for us to learn from our errors. Sharing those with others helps us articulate the reason for our error and lets others know of our humanity.
Listening to other peoples’ stories helps us recall our own. An example is a worker who is rushing to complete a cutting task but fails to wear eye protection. At the morning meeting, he relays the incident to the rest of the crew, which might go like this: “Yesterday I was in a big rush, and was a bit complacent, to get a piece of lumber cut. I forgot to put on my eye protection, but nothing happened. Obviously it could have been a lot worse. Next time I rush, I need to self-trigger on that and remind myself to wear PPE.” Getting people to talk about their close calls and at-risk behaviors is a great way to let them realize that there may be room for improvement in behaviors. But not everyone wants to talk about their mistakes, especially if there is a climate of ridicule or blame attached to errors. That becomes one of the primary roles of site leadership — to make storytelling and discussing error a safe thing to do for everyone. Using the power of storytelling, unlocking the opportunities we all have to analyze our close calls and encouraging a culture where people freely talk about their errors and mistakes can help build trust and make employees realize that “it could happen to me.” And when people think that, they are far more inclined to change their behavior, not only in front of the boss but when no one is looking and at home. And that translates to a safer workplace and fewer injuries, which benefits everyone.
The Engagement Effect, a division of Ross Performance Group, LLC, offers solutions in organizational results, safety and health, leadership, talent management and culture change. Learn more about us at www.theengagementeffect.com or email the author at email@example.com.
CONTRACTOR - 59
Construction Academies in Southeast Alaska - Hands-on instruction for students in Juneau and Ketchikan
Executive Director -
Alaska Construction Academy
The goal of the Alaska Construction Academies is to serve the industry by providing knowledgeable, motivated, entry-level employees, and to serve students and job seekers by allowing them to explore their aptitudes and interests under the guidance of experienced, hands-on instructors from within the industry. An integral part of this strategy is to increase the likelihood that trainees will find jobs by tailoring instruction to the needs of local employers and providing referrals for actual job opportunities, often directly, but also through the Alaska Job Centers.
The Construction Academies in Juneau and Ketchikan began in 2008. They are funded through the Construction Education Foundation (CEF) by grants from the Alaska Department of Labor and Workforce Development and the Alaska Department of Commerce, Community and Economic Development. Both academies have an adult and a high school component.
The Juneau Construction Academy’s (JCA) in-school program provides courses for high school students in construction and related trades at the district high schools and an alternative school during the school day and through after-school courses for interested and motivated students. The adult program includes classes that teach basic construction techniques and often include information on weatherizing homes in the wet southeast weather. The JCA began “House Build” last year, a project in which students design, build and sell a home. This year’s home was designed by Caitlyn DeRocher, a senior student at Juneau-Douglas High School taking architecture and engineering courses. She designed the home with help from high school instructor Craig Mapes, UAS Professor Robin Gilchrist and Tamara Rowcroft with the Juneau Housing Trust.
The Ketchikan Construction Academy (KCA) combines classroom instruction and on-the-job training with local contractors. KCA’s adult program instructors are licensed local contractors, and during the classes they become familiar with potential employees. KCA offers students help with resume writing and interviewing skills to prepare them for jobs. At a special graduation celebration, KCA added “speed interviewing” as a way for multiple employers to meet and interview course graduates in five- minute sessions.
Ketchikan High School partners with Southeast Alaska Builder Industry Association (SEABIA) members to offer opportunities for students in construction trade classes to make site visits and “help” as a concrete foundation is poured or watch as beams are set into place. And welding classes give students the skills needed to work in the Alaska Ship and Dry Dock industry.
There are also Construction Academies in Fairbanks, Mat-Su, Anchorage and the Kenai Peninsula. In 2010, rural Construction Academies were started in the Bethel, Nome and Kodiak regions funded by the Denali Commission.
For more information about Academy classes or how to hire AkCA course graduates, contact your local Construction Academy, visit www.alaskaca.org or call AkCA Director, Kathleen Castle at (907) 222- 0999.