CONTRACTOR COMMUNIT Y SLDF Update: Good News from Oklahoma
ASA Offers Comments to the FY22 NDAA
As an update to the SLDF case pending before the Oklahoma Supreme Court, H2K Technologies, Inc., v WSP USA, Inc. and Fidelity and Deposit Company of Maryland, involving the waiver of subcontractor lien rights, a decision was reached on November 16, 2021, reversing and remanding the matter to the trial court for further proceedings. The Oklahoma Supreme Court held that a subcontractor’s statutory right to waive its lien rights may not be exercised by anyone other than the subcontractor. Here, the subcontractor was ruled to not be bound by the waiver of lien rights by another party in the contractual lien which was done without the subcontractor’s knowledge or consent. This ruling represents a victory for subcontractors. However, the case presents us with a note of caution that it is very important for subcontractors to carefully review the language that pertains to liens and waivers of liens in their subcontract and the prime contract. Thank you to David Walls, Esq. for providing us with the update on this case.
ASA, along with the Construction Industry Procurement Coalition (CIPC), offered comments to the House and Senate Armed Services’ Committee Leadership highlighting our views regarding the FY22 National Defense Authorization Act (NDAA). We support the Defense Department submitting a report on the Cybersecurity Maturity Model Certification (CMMC) on small businesses. CMMC is one of the most ambitious cybersecurity compliance requirements ever undertaken by the department. The program is designed to be a mandatory requirement on all defense contracts. The potential of excluding a significant portion of small business defense contractors and the ability for agencies and prime contractors to meet small business goals should be evaluated and reported to Congress and the public. Additionally we supported the exemption of the Miller Act from the periodic indexing required under Title 41. The Miller Act currently requires all general contractors on federal construction projects over $150,000 to furnish surety bonds to protect the government’s use of taxpayer funds and to ensure payments to
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subcontractors, and suppliers. Any increase in the contract price threshold through indexing exposes workers, suppliers, and taxpayer dollars to unnecessary risk. We opposed the bill’s section regarding new and onerous requirements for military construction contractors which goes against decades of federal contracting policies and precedent, including requiring all contractors and subcontractors performing a military construction contract be licensed in the state where the work will be performed and issuing local hiring preferences. Per our comments, “this section will severely restrict military construction contractors to perform work, leading to an exodus from the industry and jeopardizing critical military infrastructure projects.” Additionally, we opposed the provision repealing section 829 of the National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-328), which states that a contracting officer shall first consider the use of fixed-price contracts in the determination of contract type. For architect/engineering services contracts, with well-defined scopes of work and clear deliverables identified, fair and reasonable costs of services can be negotiated. This makes
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