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Cotney Brief May 2025

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THE COTNEY BRIEF | Construction Law Simplified

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Issue 1 · May 2025     |    (866) 303-5868 · tcotney@trentcotney.com

 

Regulatory Changes
• Federal Contractor Minimum Wage Rescinded. President Trump revoked the Biden‑era $15/hr contractor wage order on March 14, 2025. Agencies have begun issuing de‑implementation memos, lowering payroll costs on new federal projects but creating overtime‑classification confusion for multi‑site employers. I anticipate additional guidance on this issue this year.
• Affirmative‑Action Plans Eliminated. A January 2025 Executive Order scrapped EO 11246 requirements. Contractors must still track EEO‑1 data but can suspend written AAPs unless a state mandate applies. It appears that federal contractors and grant recipients will have to certify that they don’t have AAPs or DEI programs. We anticipate further clarification on the issue.
• FAR Reform & “Commercial First.” An April 15, 2025 order directs contracting officers to favor commercial‑off‑the‑shelf solutions and streamlines change‑order pricing. Contractors can expect tighter profit‑margins on federal projects.
• OSHA Heat‑Illness Rule Moves Forward. Despite talks of rollback, OSHA confirmed public hearings for June 16, 2025. Regardless of the rule outcome, Contractors should prepare written plans as well as toolbox talks on hydration, signs of dehydration, and emergency response.

Case Law Update

Thompson Thrift Construction, Inc. v. Modus Studio, PLLC – 2025 Ark. App. 193 (April 2, 2025)

Issue: Does Arkansas’s one‑year savings statute revive construction claims dismissed without prejudice after the five‑year statute of repose (bar date for filing suit) expired?
Holding: Yes. The Court of Appeals reversed a trial‑court dismissal, ruling the savings statute allowed Thompson to refile its negligence and indemnity claims against the architect even though the §16‑56‑112 repose window had closed.
Why it matters: Arkansas is now in the minority allowing savings‑statute revival past repose deadlines. Subcontractors and design professionals may face longer tail risk. Contractors should reassess claim‑notice provisions and wrap‑up liability coverage in Arkansas projects.

Practical Tips for Contractors – Surviving an I-9 Audit

  1. Pre‑Audit I‑9 Review: Conduct an internal audit every six months; use the latest USCIS Form I‑9.
  2. Correct, Don’t Backdate: If errors surface, line‑through, date, and initial corrections. Never create a new form.
  3. Centralize Records: Maintain I‑9s and supporting IDs in a locked, standalone file—separate from personnel files to limit discovery scope.
  4. Designate a Response Team: One manager and outside counsel should handle all ICE communications. Frontline supervisors should route agents to that team.
  5. Three‑Day Rule Discipline: Ensure new hires complete Section 1 on day 1 and employers complete Section 2 by day 3; calendar reminders help.
  6. No Document Over‑Requesting: Asking for extra or specific ID beyond I‑9 lists can trigger discrimination claims.
  7. E‑Verify Consistency: If you use E‑Verify on any worker, use it on all new hires.
  8. Prepare a Contingency Roster: Identify alternate crews or subs in case Notices of Suspect Documents remove key workers.

For more information on how employers should handle ICE raids, please check my article on the topic here:

https://www.cotneycl.com/navigating-ice-raids-and-worksite-inspections/

Contract Provision of the Month – Tariff & Price‑Acceleration Clause

Context: Lumber, fasteners and steel now carry Trump‑era tariffs adding $7.5‑10K to an average single‑family build; roofing metals face similar spikes. I have previously discussed the importance of inserting a price acceleration provision in your contract:

Price Acceleration Provision

If there is an increase in the actual cost of the labor or materials charged to the Contractor in excess of 5% subsequent to making this Agreement, the price set forth in this Agreement shall be increased without the need for a written change order or amendment to the contract to reflect the price increase and additional direct cost to the Contractor.  Contractor will submit written documentation of the increased charges to the Prime Contractor/Owner upon request.  As an additional remedy, if the actual cost of any line item increases more than 10% subsequent to the making of this Agreement, Contractor, at its sole discretion, may terminate the contract for convenience.

Here is a tariff-specific clause:

Tariff Surcharge Adjustment
The Contract Sum includes Import Costs (tariffs, antidumping duties, customs fees) in effect as of ______, 2025. If aggregate Import Costs on any shipment increase by more than 5% of the Equipment/Material invoice value, Contractor shall notify Owner in writing within 7 days and may add the excess amount to the next payment application, supported by U.S. Customs entry summaries. Owner may elect to (a) pay the surcharge; (b) furnish tariff‑free substitute materials meeting specifications; or (c) terminate the affected work for convenience with payment for completed work pursuant to the Contract Documents. Import‑cost decreases in excess of 5% shall be credited to Owner on the next payment application following the decrease.

 

For more information on tariffs and construction, check out my article on the topic here:

https://www.cotneycl.com/how-tariffs-affect-the-construction-industry

Upcoming Speaking Engagements & Events

  1. FRSA’s 103rd Annual Convention & Florida Roofing & Sheet Metal Expo
    June 4–6, 2025 – Gaylord Palms Resort & Convention Center, Kissimmee, FL
    Speaking Sessions

June 4, 2025, 10:15 am – 12:15 pm Seminar #4 – Licensing Issues & Contracts

June 5, 2025, 9:30 am – 10:30 am Seminar #19 – Construction Law Updates

June 6, 2025, 7:00 am – 9:00 am Seminar #22 – Licensing Issues & Contracts

Register at floridaroof.com/frsa‑expo and stop by the booth 407.

  1. Episode 99 of the #1 rated construction law podcast, Law & Mortar, is now out wherever you listen to podcasts. Join me and John Kenney where we discuss the latest legal and business issues affecting the industry.

https://open.spotify.com/show/21TIdJzyddzFKUBE8cFrmy

Disclaimer: This newsletter is for informational purposes only and does not constitute legal advice.

 

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.