Bid Protests: Timing

In a recent Maryland State Board of Contract Appeals (“Board”) case, the Board found that a contractor failed to file a timely bid protest. The Board ruled that the bid protest should have been made when the construction company knew or should have known the basis for its protest and not at the time the bid was awarded. A high burden is placed on any contractor submitting bids for State contracts, because a bid protest may need to be filed before the bid is awarded or repercussions felt by the contractor.

In this most recent case, the State Highway Administration (“SHA”) accepted invitations for bids for a Community Safety and Enhancement project (“Contract”). The bid of the lowest bidder was announced as “irregular” because of insufficient bid security; however, subsequent to the opening of the bids, the SHA found that the low bidder’s bid was valid and effective. The low bidder was then awarded the Contract. After being informed by SHA of the award of the Contract, a bid protest was brought by the second lowest bidder. The Board ultimately found that the bid protest should have been brought within seven days from the time the lowest bidder’s bid was deemed “irregular” and not within seven days after the bid was awarded. The Board, as it has done numerous times in the past, places a strict interpretation on the timing of a bid protests as it relates to a construction company’s basis for the protest. As such, if you intend to bid any public projects in Maryland, be vigilant in determining whether all proper procedures have been followed. As soon as there is a violation, even if it occurs prior to the bid being awarded, a bid protest may be your only option to protect your rights.

If you have any further questions on bid protests or construction law, please contact Michael W. Siri at siri@bowie-jensen.com.

Employer’s Must Pay Accrued but Unused Vacation Leave

Employers beware! You are now required to pay departing employees for their accrued, but unused, vacation leave. In a surprising reversal, the Employment Standards Service of the Maryland Department of Labor, Licensing and Regulation (DLLR), the agency responsible for administering Maryland's wage and hour laws, recently changed its long standing regulatory position that employees had no right to payment for accrued, unused vacation at termination, absent an employer policy entitling them to the same.

The DLLR’s new position is articulated in its revised "Maryland Guide to Wage Payment and Employment Standards" which states, in relevant part, that “[w]hen an employee has earned or accrued his or her leave in exchange for work, an employee has a right to be compensated for unused leave upon the termination of his or her employment regardless of the employer's policy or language in the employee handbook.” In addition, the guide warns employers that “use or lose” vacation policies requiring employees to use or forfeit their accrued paid leave by the end of the calendar year, are unlikely to pass legal muster. The DLLR has not changed its policy with respect to sick leave reasoning that the purpose of sick leave is to provide employees with “a contingency against illness” and “cannot be claimed at termination in the same manner as unused vacation leave, unless expressly allowed in a contract or an employer's policy.” Maryland Guide, § IV(H).

To comply with the DLLR's new interpretation of Maryland law, employers should take the following steps:

1. Pay employees for their accrued but unused vacation/paid time off when their employment ends (for any reason).
2. Amend your Employee Manual to reflect this change.
3. Review policies regarding the accrual of vacation and PTO leave and consider placing limits on accrual. This would reduce the amount of accrued leave that would have to be paid at termination.

2007 AIA 201 - Multiple Prime Contracts

The 2007 AIA 201 shifts the risk from the owner to the contractor in instances where the Owner enters into agreements with multiple contractors for a single project. In this instance, (known as a multiple prime project), the 2007 AIA 201 provides that if the contractor’s work depends upon the work of another contractor, the contractor must, before beginning work, notify the architect of apparent discrepancies or defects in the work of the other contractor that would prevent the contractor from properly performing work. The failure to notify the architect of the discrepancies or defects results in acknowledgement by the contractor that the Owner’s separate contractors completed or partially completed construction is fit and proper to receive work. Moreover, unlike the ConsensusDocs, there is no contractual entitlement to price and time adjustments rendered necessary due to coordination.

For further information, contact Matt Hjortsberg at 410-583-2400 or Hjortsberg@bowie-jensen.com

2007 AIA 201 - Protocal for Electronic Records

The new AIA 201 contains a provision that requires the parties to agree on a "protocol" for the transmission of information and documents. This requirement is an obvious reaction to the diffuse manner in which information is exchanged with the advent of electronic and wireless technology. While the AIA 201 provides little guidance on the various considerations necessary to establish this protocol, the new ConsensusDocs provide a comprehensive list of factors that the parties must address when arriving at an agreed upon protocol. The ConsensusDocs, which are the contract documents endorsed by the American Subcontractor's Association and the American General Contractor's Association, set forth express factors for consideration of the parties. These considerations include (1) definition of documents and data to be accepted and transmitted electronically; (2) management and coordination responsibilities; necessary computer hardware and software; (3) acceptable formats transmission methods and verification procedures; (4) methods for maintaining version control; (5) security and privacy requirements; and (6) storage and retrieval requirements. Consequently, while the AIA 201 is short on guidance the ConsensusDocs provide express details on setting forth the appropriate protocol for the transmission of documents and is the prudent course to follow in this regard.

For further information, please contact Matt Hjortsberg at 410-583-2400 or Hjortsberg@bowie-jensen.com. Mr. Hjortsberg and Tina Gentle of Bowie & Jensen were recently featured on the cover of the Maryland Lawyer section of The Daily Record with respect to an article on handling electronic information in the context of litigation. View article.