Welcome to the first issue issue of the year for The Site Report.

As we kick off 2023, we are committed to continuing to bring you timely information and our thoughts on WHY that information is important. If you have suggestions for the e-newsletter or legal questions, always feel free to contact us.

For those of you who are involved in labor and employment law or have a colleague in that area, we are hosting the 2023 National Labor and Employment Law Symposium in Park City, Utah, February 5-8, 2023. These roundtable, interactive, employment law discussions will feature more than 20 speakers representing in-house counsel, management and plaintiff. You will hear both the plaintiff and defense side of important labor and employment issues and learn and network with colleagues in your practice area from across the U.S. Click here to learn more and register.

We hope you enjoy this issue and, as always, thank you for reading.

Stephanie U. Eaton - Co-Chair, Construction Group; Vice Chair of Southern Offices, Litigation Department; Editor, The Site Report

and

Julian E. Neiser - Co-Chair, Construction Group; Vice Chair of Northern Offices, Litigation Department

“As builders adapt to economic, supply chain and labor challenges, they’re turning to technology to boost performance.”

Why this is important: All of the turmoil of 2022 (the war in Ukraine, supply chain issues, inflation, and labor shortages) have left contractors working hard to keep their businesses afloat. This article discusses some of the ways that construction technology, or contech, is helping. New software applications that manage employees and schedule workflows are becoming more prevalent. Like virtually every other industry, the construction industry also needs to be mindful of cybersecurity issues and take advantage of available software applications and best practices. Financial technology, or fintech, applications may change the way contractors are paid and address the always-present issue of late payments (which cost contractors $208 billion in 2022). At bottom, contech solutions are becoming a welcome way for contractors to address some of the problems inherent in the industry and some that came about as a result of the turmoil of 2022. Contractors should consider how these and other technology solutions can aid them in keeping their businesses thriving. --- Nicholas P. Mooney II

“Workers operating while drones were 12 and 25 feet away looked away from job tasks more frequently than when drones were 1.5 and 4 feet away.”

Why this is important: We have often highlighted in this newsletter the uptick in drone use on construction projects and the special considerations that construction businesses should take into account when adding these powerful tools to their arsenal. Safety has always been a key issue to address when implementing drones, but the drone-related safety focus tends to be on the drones themselves and the risks of a drone malfunctioning and crashing on workers if it is being flown over an active jobsite. This article and the CPWR study it discusses highlight that there is a broader safety picture surrounding drone use. Training every worker on how drones will impact their duties can help minimize risks of distraction and the negative attitudes some workers may have toward drone implementation. --- Steven C. Hemric

“There’s federal money on the table to help states modernize their building energy codes.”

Why this is important: Updating state building codes is crucial to efforts to address climate change, because between 34-37 percent of greenhouse gas emissions are generated by buildings and the electricity consumed by building occupants. Building code changes can reduce the amount of energy buildings waste by improving requirements for insulation, sealants, HVAC systems, and energy efficient windows, doors and appliances. Building code changes aimed at energy efficiency are particularly important for states that have no or weak energy codes, high carbon emissions, and extensive construction projects in the works. North Carolina ranks second among the states identified by the American Council for an Energy-Efficient Economy that would benefit from state building code changes, in part because of the state’s carbon dioxide reduction target outlined in House Bill 951. As announced by North Carolina Governor Cooper in October 2021, the law requires the Utilities Commission to take all reasonable steps to reach a 70 percent reduction in carbon emissions by 2030, and to reach carbon neutrality by 2050. And, states like North Carolina can take advantage of the 2022 Inflation Reduction Act that provides $1 billion in funding for states to achieve energy efficiency goals. Approximately one-third of the funds are being allocated for states to adopt new building codes that meet or exceed the national model energy codes for both residential (“IECC”) and commercial buildings (ASHRAE 90.1), and two-thirds of the federal money is intended to help states implement net-zero energy building codes. Given North Carolina’s carbon reduction legislation and availability of federal funding to help achieve these goals, North Carolina’s construction industry should follow and be aware of changes to state building codes, which will, in turn, change contract means and methods, pricing, and the array of “clean” products that can be used for construction projects. --- Stephanie U. (Roberts) Eaton

“As an uproar over the future of gas appliances burns hot, it's overshadowing efficiency gains and other benefits states can achieve with building code updates.”

Why this is important: In a continuing effort to lower carbon emissions, the trade groups within the construction industry have been developing model building codes that will most likely be adopted by states and municipalities in the coming years. This article discusses those model code changes and their potential effect on new construction. It is always important to be up-to-date on all building codes in the ever-changing construction industry. That is why it is important to consult with a legal expert on buildings codes both before and during construction to confirm that your project is in compliance. If you violate building codes, you are exposing yourself to civil liability, fines, and possible criminal consequences. The Construction Practice Group at Spilman Thomas and Battle can assist you with navigating the changing building codes and help protect you from possible financial and personal ruin. --- Matthew W. Georgitis

“The money will provide an important boost to maintaining the state’s approximately 7,000 bridges, almost 150 of which are owned by municipalities or are otherwise not owned by the WVDOT.”

Why this is important: West Virginia’s unique terrain, with its majestic mountains and its many flowing creeks and rivers, results in the need for approximately 7,000 bridges in order to allow travelers to traverse its roadways. These bridges need various levels of maintenance and repairs to remain safe for use. As part of the federal Infrastructure Investment and Jobs Act (“IIJA”), West Virginia is going to receive $548,083,740 over five years to replace, rehabilitate, maintain, and build bridges in the state. The additional approximate $110,000,000 in yearly federal funds will be added to the $167,000,000 the state currently budgets for bridge projects each year. Exclusive of the allocated federal funds, West Virginia plans to increase its budget for bridge projects to $227,000,000 in 2024.  

These federal funds received through the IIJA are not just for bridges maintained by WVDOT, but also bridges owned and maintained by local municipalities. A unique provision of the IIJA will allow West Virginia to spend at least 15 percent of total allocated funds on municipal bridge projects. West Virginia is currently looking at 75 municipal bridge projects that are eligible for 100 percent funding through the IIJA program. Typically, municipalities are required to provide a 20 percent match in allocated federal funds. The IIJA will also allow more flexible terms for local matching funds on bridge projects that will still require matching funds.This additional federal funding for bridge projects in West Virginia is a tremendous business and employment opportunity. If your company is involved in a highway or bridge construction project of any size, Spilman’s Construction Practice Group has attorneys experienced with highway and bridge construction projects who can assist with the review of contracts, counseling on construction issues during the project, and claims handling if disputes arise. You can contact us here. --- Alexander L. Turner

“Contracts; Payment Clauses, Right to Payment of Subcontractors.”

Why this is important: As of 1 January 2023, newly executed contracts in Virginia can no longer include “pay-if-paid” provisions, and prime contractors will be required to pay subcontractors within 60 days of receiving an invoice or seven days after receiving payment from the owner, whichever is earlier. Upstream contractors will still be able to withhold payments for defective work, delays, and other contractual breaches by lower-tiered subcontractors, but more care will need to be taken when an upstream contractor is deciding whether or not to pass along a subcontractor cost on its own invoice to the prime contractor or owner. Virginia now joins several other states with similar provisions, including neighboring North Carolina, in a trend toward providing subcontractors additional avenues to pursue payment. --- Steven C. Hemric

“Between 2015 and 2018, six states eliminated minimum standards for skilled trades workers.”

Why this is important: As of 2023, 28 states plus the District of Columbia have prevailing wage laws that establish minimum wages for construction workers employed on public works projects. In general, prevailing wage laws require contractors and subcontractors for public works projects to pay employees the hourly wage that is commonly paid, and provide fringe benefits that employers commonly provide, in the geographic area for similar work. The main purpose of prevailing wage laws is to protect local construction standards in the competitive low-bid process on public works projects, and create a level playing field for construction contractors employed on taxpayer-funded projects. Despite this purpose, six states (Indiana, West Virginia, Kentucky, Arkansas, Wisconsin, and Michigan) repealed their prevailing wage laws between 2015 and 2018. According to a recent study by the Illinois Economic Policy Institute (“ILEPI”) and Project for Middle Class Renewal (“PMCR”) at the University of Illinois at Urbana-Champaign, this has had a negative impact in the construction business for these six states. Specifically, slower construction employment, decreased wage growth, lower workforce productivity growth, increased construction jobsite fatalities, and less market share for in-state contractors, compared to states with prevailing wage laws. This is important because the Infrastructure Investment and Jobs Act has provided significant investment in the country’s infrastructure, and there is significant need for skilled construction workers. The six states that repealed their prevailing wage laws should consider this data, and prevailing wage laws, to attract more construction, and skilled contractors to their states. --- Victoria L. Creta

“The money comes from the federal Infrastructure Investment and Jobs Act and will go towards the construction of a new segment of road connecting the north end of Mullens in Wyoming County to the segment of West Virginia Route 16 east of New Richmond.”

Why this is important: The federal Infrastructure Investment and Jobs Act (“IIJA”) is not just providing West Virginia with additional funding for bridge projects, it is also providing West Virginia with $25,000,000 in additional funding for the construction of the Coalfields Expressway between Mullens and W.Va.16 in Wyoming and McDowell counties. The construction of the Coalfields Expressway in southern West Virginia is seen as key to local business development by providing easier access to the area. This access will allow for greater diversification of the local economies. AmeriCarbon Products has committed to building the country’s first coal-to-carbon processing plant in Wyoming County near Mullens. Omnis plans to build processing plants in the area in order to extract rare earth metals from coal waste for use in modern electronics, like cell phones and electric cars. Easier access to the region also means an increase in tourism, which also stimulates the local economies. These infrastructure projects in West Virginia not only stimulate the construction industries in West Virginia in the short term, but also entire economies throughout West Virginia long after the infrastructure projects are completed. As mentioned above, our Construction Practice Group is comprised of experienced attorneys who can assist with the review of contracts, counseling on construction issues during the project, and claims handling if disputes arise. Contact us if you need guidance. --- Alexander L. Turner

“As daunting as the climate crisis is, it is not the only environmental challenge facing the construction industry that needs to be addressed.”

Why this is important: In particular, extensive waste generated by both new construction and demolition and renovation of existing buildings ends up in landfills. One way waste can be reduced is to make use of innovative technologies – such as 3D printing – and to incorporate recycled materials into construction projects. The Green Business Certification Inc. administers the third party certification Total Resource Use and Efficiency (“TRUE”) program. This program provides guidance to entities that manufacture buildings and building products on ways to meet zero waste goals and reduce carbon emissions. Contractors can also look to local and national companies that recycle construction waste for new uses on other types of projects, including smaller construction projects, and thus divert those materials away from landfills. In addition to the issue of waste, construction projects can generate pollution that impact air, water and natural ecosystems. The use of clean, renewable energy such as solar energy to power building systems and incorporation of on-site vegetation and water capture and recycling can all reduce environmental impacts of new and existing buildings of all types and sizes. Last, but certainly not least, the construction industry needs to focus on ways to reduce indoor pollutants that can impair human health. For example, some building materials contain toxic chemicals that emit harmful gasses, especially when ventilation is insufficient for the occupied space. Owners, design professionals, and contractors should insist on transparency in building product ingredients, and standardized reporting by product manufacturers and suppliers such as via Health Product Declarations, should aid in the selection of materials that are safe when incorporated into new and existing buildings. --- Stephanie U. (Roberts) Eaton