Client Alerts, News Articles & Blog Posts

Everything you need to know about BMD and the industry.

Finding Opportunity in Adversity: Optimism for the Construction Industry

It is said that opportunity hides itself in adversity, and so, for those industry stakeholders still struggling with the impacts of the pandemic, it is fair to ask: what opportunities has the COVID-19 pandemic created within the construction industry?

Opportunities to Collaborate are at an All-Time High. Collaboration is, at times, a byproduct of necessity. For many years, contractors, subcontractors and lower tiers have all talked about a more collaborative approach to building, but habit always seemed to get in the way, as many of those same parties were quick to resort to familiar, one-sided contracting methods and traditional risk allocation mechanisms. Now, however, faced with the need to revise project programs, manage disrupted supply chains, accommodate public health restrictions, and mitigate project delays, project owners and construction managers are learning that it is in their best interest to work with team members in unison, not restricted by lines of contractual privity. This presents a real opportunity for the industry to come together to develop processes and procedures that correspond to the changed public health and market conditions.

We expect that along the way, project owners and program managers may see the benefit of increased participation in joint efforts related to managing project budget, scope and time. Adding stakeholders to the conversation lends itself to the future use of more collaborative project delivery methods, and improved contracting processes through which parties agree to fairly allocate risk based on their ability to control, and prevent, such risk. 

Innovations in Technology and Building Methods.  Physical distancing is now the norm, which necessarily changes the way contractors, subcontractors and other project participants interact with one another. Interactive web-based meetings have replaced in-person meetings. Tours and inspections are being conducted virtually to allow stakeholders to monitor project progress from miles away. Artificially intelligent sensors and devices can be worn to ensure physical distancing measures are being observed. All of these tools offer real-time information so that issues can be identified and resolved quickly, thus improving productivity and efficiency. 

We can also expect to see an increase in the modular building trend. Here, control is the key. When physical components or units are built off-site, the benefit is two-fold: first, more opportunities to better control the safety of that off-site environment, and second, a greater ability to control, and reduce, on-site congestion. 

Made in the U.S.A.  The pandemic has exposed another truth: the construction industry in the United States is still dependent on international materials and workers. Reports indicate that nearly 30% of building materials used in the United States are imported from China. When international borders are closed, or trade relations are strained, disruptions in critical supply chains are inevitable. Herein lies an opportunity to bring production and manufacturing operations back to the United States, particularly where owners and developers may be willing to pay higher prices for materials that come from a more reliable supply chain. The construction of those very manufacturing facilities could, in and of itself, also be a boon for the industry. 

Safer and Cleaner Project Sites.  Practices such as temperature checks, frequent handwashing, improved mask and glove policies, and sanitization of work sites and equipment are all drivers for improved public health, and are likely to continue beyond the pandemic. We may also see evidence of secondary benefits from certain health and safety measures. For example, staggered shifts will lead to less crowded work areas, which should aid accident prevention efforts. Less congested work areas may also lessen burdens to coordinate work, which in turn may increase productivity. With these practices likely here for the long-term, the project participants most willing to embrace the new measures are most likely to succeed.

Justin M. Alaburda is a member and co-managing partner of the Akron office of Brennan, Manna & Diamond. He can be reached at jmalaburda@bmdllc.com. 

S.B. 263 Protects 340B Covered Entities from Predatory Practices in Ohio

Just before the end of calendar year 2020 and at the end of its two-year legislative session, the Ohio General Assembly passed Senate Bill 263, which prohibits insurance companies and pharmacy benefit managers (“PBMs”) from imposing on 340B Covered Entities discriminatory pricing and other contract terms. This is a win for safety net providers and the people they serve, as 340B savings are crucial to their ability to provide high quality, affordable programs and services to patients.

DOL Finalizes New Rule Regarding Independent Contractor Status, But Its Future Is In Jeopardy

On January 6, 2021, the Department of Labor announced its final rule regarding independent contractor status under the Fair Labor Standards Act. As described in a prior BMD client alert, this new rule was fast-tracked by the Trump administration after its proposal in September 2020. The new rule is set to take effect on March 8, 2021, and contains several key developments related to the "economic reality" test used to determine whether an individual is an independent contractor or an employee under the FLSA.

Bankruptcy Law Changes - 2020 Recap And What To Expect In 2021

In a year of health challenges and financial distress to many individuals and businesses affected by the pandemic, the year 2020 brought some significant changes to the bankruptcy laws. Some of these changes were in place prior to the pandemic; others were a direct response to the pandemic with the goal of helping struggling businesses and individuals. Ahead, we can likely expect further changes to the Bankruptcy Code with the incoming Congress.

UPDATE - SBA Releases Rules and Guidance for Second Round PPP Funding

Late yesterday (January 6, 2021), the U.S. Small Business Administration released rules and guidance for businesses wishing to take part in the long awaited second round of Paycheck Protection Program (“PPP”) funding. As most businesses are aware, the rules governing PPP loans have been updated as part of The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Act”). The Act was just one section of the massive 2021 Consolidated Appropriations Act that was passed by Congress and signed into law by the President on December 27, 2020. To combat the ongoing disruptions caused by the COVID-19 pandemic, the Act generally provides (a) first time PPP loans for businesses that did not obtain a loan in the first instance, (b) PPP second draw loans for businesses that already obtained a loan but need additional funding, and (c) additional funding for businesses that returned their first PPP loan or did not get the full amount for which they qualified.

UPDATE - Vaccine Policy Considerations for Employers

If you read our post from November, you’re already an informed employer. This first post of 2021 is to share good news, give a few updates, and answer some other common questions. Q: What’s the Good News? First, the EEOC confirmed that employers may require employees receive the COVID-19 vaccine. Second, polling indicates that the number of Americans who said they will receive a vaccine has increased from around 63% to over 71%. The number of Americans who are strongly opposed to a vaccine is about 27%. Third, initial returns show that the efficacy rate for certain vaccines is as high as 95% for some at-risk recipients.