Louisiana AGC - LAGC Magazine, v5.1 2022

L A G C T H E V O I C E O F T H E L O U I S I A N A C O N S T R U C T I O N I N D U S T R Y V 5.1 SPRI NG 2 02 2 E DI TI ON / / L AGC 09 22 Louisiana Construction Industry 2022 Outlook Big Changes May Appear on New 2022 Construction Storm-water Permit

TEXT IF NEEDED PRESIDENT JAY WINFORD VICE PRESIDENT ED SCHEUERMANN TREASURER DUANE MIZELL SECRETARY/CHIEF EXECUTIVE OFFICER KEN NAQUIN E X E C U T I V E C O MM I T T E E ( O F F I C E R S ) D I V I S I O N O F F I C E R S CHAIRMAN ROSS DESCANT VICE CHAIRMAN STUART BILLEAUD B U I L D I N G / I N D U S T R I A L CHAIRMAN K. STOLZENTHALER VICE CHAIRMAN NATHAN KERNION F L O O D P R O T E C T I O N / C O A S T A L R E S T O R A T I O N CHAIRMAN MATTHEW WOODS VICE CHAIRMAN CHET CHAUTIN H I G H W AY / H E A V Y D I V I S I O N SENIOR VICE PRESIDENT SHANE KIRKPATRICK CHAIRMAN KENNETH MARCELL VICE CHAIRMAN TREY CRAWFORD U T I L I T Y I N F R A S T R U C T U R E 2022 LAGC OFFICERS LOUISIANA AGC 3 TABLE OF CONTENTS 04 Message from the CEO 04 Message from the President 05 2022 Annual Sponsorship Program 06 2022 Critical Issues Summit Agenda 07 Complete COVID-19 Testing Services from Core Occupational 07 The Future is Now! 08 How to Ensure a Smooth Closeout 09 Louisiana Construction Industry 2022 Outlook 09 Building Buildings and Relationships 10 Area Manager Update — David Landreneau 10 Public Owners Not Paying Contractors Timely — Should Title 38 Be Amended? 11 Legal Tips from Phelps Dunbar 12 Equipment Management Technology Can Help Overcome the Effects of Construction Labor Shortages 13 Risk Management in 2022 13 Area Manager Update — Andre Kelly 14 Addressing Industry Issues in 2022 — Wray & Associates 15 Boone Services, LLC vs. Ascension Parish Government 15 Your Business. Our Purpose. 16 Tracking Tax Changes For 2022 16 The Essentials of Building a Great Team 17 Why the Construction Industry Needs Better Branding 18 Safety and Technology Updates 19 Smaller Equipment Helps Drilled Shafts Get into Tight Spots 19 Final Area Manager Update — Michael Demouy 20 Louisiana One Call Update 21 L ouisiana Federal Court Follows Other Federal Courts Enjoining Vaccine Mandates for Government Contractors 22 Big Changes May Appear on New 2022 Construction Storm-Water Permit 23 Legislative Update — Capitol Partners Firm 24 A Blueprint for Success — 401K 25 Business is Looking Up — But So Are Costs (AGCA) 26 Storm-Water Management at Trinity Sports Field

It has been 35 plus years that I have waited for the construction industry to realize it’s full funding. By that I mean all aspects of the industry represented by LAGC: commercial building, transportation, underground and coastal ... all seem fully funded. Then, something bad happens in the name of workforce and supply chain. There is no doubt that 2022 will bring about challenges that we must address. Cost of materials, availability of those materials and workforce shortages are the three bugger-bears that could derail a thriving construction economy. LAGC formed a Material Price Task Force, with a `special eye on anti-trust concerns, to look at discussion points we could have with public and private owners regarding the ever-increasing costs of construction materials. Some items have increased over 300%. Several ideas were floated from establishing an escalation/deescalation clause to establishing a contingency bid item. How would such ideas work? First, identify which construction materials are key to a project and establish either in the contract. An escalation/deescalation clause would need an index from which to apply. Where does one get such an index, and is it representative of the costs? Engineering News-Record (ENR) publishes cost indexes for certain materials quarterly, but they are by region, not by state. Is that good enough? Second, with costs rising, how is an owner to know the top end of what that cost may be. An alternative is for the owner to establish a contingency bid item that they set and all bidders have. The contingency could be utilized if a contractor can prove that bid costs have increased by a predetermined percent. Once the contingency is used up there are no more. At least the owner knows the top end that would be paid. What happens to the subcontractor at the later stage of a project? How does an owner set the contingency? We ask every engineer, architect and owner to work with the construction industry regarding the availability of materials. This is not a problem just in our state, but nationwide. Work with contractors when they can prove that material delivery will be delayed. Allow for some leeway when looking at contract time. Lastly, workforce development. LAGC serves on almost every workforce Task Force in existence. The problem is universal; mom and pop drug stores, restaurants, auto repair shops … you name it, everyone is having problems with full employment. Construction is no different. The question remains: How do we attract young people to a hot, cold, wet, dirty job? Wages are not the problem. Construction is one of the top paying careers, and yet we struggle. I do not have an answer, other than to keep talking up construction to high schools and community colleges. We know these problems will prevail in 2022. LAGC will work hard to mitigate each. At the end of the day, they will still exist, but at least now we have full funding. Ken Naquin, Chief Executive Officer “The best way to predict the future is to create it.” — Abraham Lincoln We certainly live and work in unique times. During the past two years our Louisiana construction community has experienced a historic COVID-19 pandemic, several devastating hurricanes, a severe ice storm event and rapid economic inflation. All of this has taken its toll on our industry, our co-workers, our subcontractors/partners and our supply chain. But your Louisiana AGC, along with AGC of America, has worked hard behind the scenes to keep us working and working safely. Moreover, in conjunction with the Louisiana Coalition to Fix our Roads (LCFOR), we have secured our first revenue increase to repair our state’s infrastructure since 1984! This source, from sales tax on vehicle sales, will be in addition to our existing “static” tax on fuels. This additional revenue will help our construction community to finally begin work on Louisiana’s much needed $14 billion construction backlog. It is also estimated that Louisiana’s Facilities Planning will have an increase of $700 million; mostly dedicated to repairing our university’s facilities/building. In addition to our increased state’s construction budgets, Washington DC has finally passed a multi-year highway bill, which should generate over $6 billion for Louisiana, alone. These much-needed funds will allow the state to begin work on larger mega projects along with maintaining our current system. As these funding streams begin to flow it is imperative that we continue to stay involved with our Louisiana AGC. Most certainly we will all be facing continued material, equipment and labor shortages which will be critical as we ramp our operations up to meet demand. Louisiana AGC has been, and will be actively involved in, assisting in workforce development, safety training, legislative proactive monitoring, specifications development and young leadership training. There is something of value for your entire team that can be offered by The Associated General Contractors of America. Please take advantage of it . . . it will probably be one of the best investments you make. The future looks bright, and with your continued involvement with Louisiana AGC we can and will meet the projected demands placed upon us to improve our state’s infrastructure in a safe, timely and efficient manner. James M. Winford, Jr., President LOUISIANA AGC 4 MESSAGE FROM THE CEO MESSAGE FROM THE PRESIDENT C H A L L E N G E S & O P P O R T U N I T I E S F O R 2 0 2 2 P R E D I C T I N G T H E F U T U R E

P L AT I N UM S P O N S O R S G O L D S P O N S O R S S I LV E R S P O N S O R S 2022 ANNUAL SPONSORSHIP PROGRAM Thanks to our fantastic members who participate! It’s because of the generous support & participation of these Sponsors that our association is able to provide members with the best possible conference experiences! D I S T R I C T S P O N S O R S LOUISIANA AGC 5

Happy New Year to each of you! As our prospective calendars begin to fill up, we are excited to welcome you to the 14th annual Critical Issues Summit for 2022. Louisiana AGC is proud to co-host this industry event with ACEC, AIA, CAAL and LAPA. This year, we chose to “return to our roots” of how and why this conference started. That is, focusing on the main chal lenges that face the construction industry. Whi le the specific things may vary sl ightly depending on your particular industry, most of the time they fal l into two categories: expenses and exposure. Speakers and sessions will focus on situations that can lead to crisis, are of a threatening nature and are most assuredly of decisive importance. An indispensable part of the Summit is for all attendees to share experiences and challenges and to crowd-source potential solutions. Essential to all LAGC events is the opportunity to interact with colleagues, owners, specifiers, vendors and suppliers and friends! Thank you for attending the Critical Issues Summit 2022! T H U R S D AY, F E B R U A R Y 2 4 1:00–2:15 PM Update from Capitol Hill David Ashinoff, Director of Public Affairs (AGC of America) Matt Reiffer, Vice President for Transportation Programs (ACEC) Martin Whitmer, Lobbyist (NAPA) 2:15–3:15 PM Legal Panel Moderator: Murphy J. Foster, III (Breazeale, Sachse & Wilson, LLP) Panelist: Daniel Lund III (Phelps Dunbar) Panelist: Chris LeMieux (Reiss LeMieux Law Firm) 3:30–4:15 PM CEO PANEL | STATE OF LOUISIANA Moderator: Ken Naquin, CEO (Louisiana AGC) Barker Dirmann, CEO (American Council of Engineering Companies of Louisiana) Erich Ponti, Executive Director (Louisiana Asphalt Pavement Association) Michael Demouy, Executive Director (Concrete & Aggregates Association of Louisiana) Kathleen Gordon, Executive Director (AIA Louisiana) 4:15–5:00 PM FINANCIAL FORECAST Michael Antonelli, Market Strategist (Baird | Private Wealth Division) 5:00–6:00 PM HAPPY HOUR SOCIAL F R I D AY, F E B R U A R Y 2 5 7:30–8:00 AM Continental Breakfast 8:00–9:00 AM Legislative Update | Redistricting & Industry Impacts Representative John Stefanski 9:00–10:00 AM Branding in Construction Chris Williams, Director of Brand Culture (Walk-On’s Sports Bistreaux) 10:00–11:00 AM Economic Update Stephen Barnes, Director of the Kathleen Blanco Public Policy Center (University of Louisiana at Lafayette) 11:00–12:00 PM Discussing Our Industry’s Critical Issues | Mitigating Rising Costs Escalations Roundtable Panel Stephen Losavio (Office of Facility Planning & Control) Dr. Shawn Wilson (Secretary, DOTD) Jerry Hebert (Grace Curtis Architects) Engineer: Raymond Reaux, Vice President-Engineering (Fenstermaker) Commercial Builder: Representative from Lemoine Company Highway Builder: Jason Latiolais (Barriere, A CRH Company) 2022 CR I T I CAL I SSUES SUMMI T Reldon Owens Public Relations Chairman Diamond B. Construction Co. EVENT HOSTED BY LOUISIANA AGC 6

January 2022 Press Release from Ken Naquin, CEO, LAGC I have received many questions regarding COVID-19 testing, who, what, when, where, and why. LAGC member Core Occupational and LAGC have discussed Core offering complete COVID-19 testing services: administer the test, record keeping, reporting, etc. They would make said service available to LAGC members at a discounted rate. For more information contact Trey Guedry, tguedry@coreoccupational.com or 225-456-2261. The Future is Now! After over 70 years of Wilson family ownership, Barriere Construction joined the CRH family of companies at the end of 2020. At the end of 2021, Peter Wilson, the Barriere family’s third-generation executive, retired from the company after 42 years of service. Peter assumed the position of President/CEO in 2016 and has passed the baton to former VP, Asphalt Operations Jason Latiolais who is in his 14th year of service at Barriere. Barriere’s goal is to attract, retain, develop, and promote top industry talent. Jason is a civil engineer, holds an MBA and was already leading all three of the company’s asphalt groups prior to his recent promotion. Before becoming a Barriere executive, he was North Shore Asphalt Group Manager and managed the award-winning French Branch Project, one of Barriere’s largest projects ever. Jason was a natural choice for President/CEO during succession planning that has been ongoing since before Barriere became a CRH company. Peter’s last year of service at Barriere was focused on facilitating post-acquisition transition and preparing to enter the new era of leadership that is upon us. Succession planning further tapped into Barriere’s industry and regional expertise, leading to a series of promotions and a more broadly representative Executive Committee. Continuous promotion and improvement of Barriere’s Internship, On-the-Job Training, Mentorship, and Emerging Leaders Programs have deepened Barriere’s talent pool while perpetuating its Culture of Care legacy. Barriere is the largest asphalt producer in Louisiana and the Contractor of Choice for our employees and customers in both asphalt paving and civil construction. Barriere has a rich history steeped in family values and has enjoyed great success thanks to all our employees and their families as well as our new and loyal customers. It is set up for future success as a CRH company, and the entire Barriere family is prepared for this exciting new era under promoted leadership. We are thankful to Peter and the rest of the Wilson family for leading Barriere to this point and grateful for the support of our new parent company, CRH, the largest building materials supplier in the world! Barriere safely and reliably delivers quality infrastructure and civil construction projects under budget and on time, every time. LOUISIANA AGC 7 Complete COVID-19 Test ing Ser vices f rom Core Occupat ional

The goal of closeout is to finish and get paid. Unorganized closeout plans will cause delays at the most inopportune time — the end of the project. Even if the project has otherwise gone smoothly, delays and issues during closeout will be remembered and potentially harm a contractor’s reputation. Developing the closeout plan early, at the beginning of the project with alignment from stakeholders, is key to a seamless closeout process. The Hartford has compiled a few tips below on how contractors can ensure a smooth closeout. • U nderstand the deliverables needed for substantial completion and certificate of occupancy. Tightly manage and coordinate the final inspection process. • Create a closeout checklist for operations and maintenance (O&M) manuals, parts list, owner training, warranties, contact lists, owner stock, record drawings, etc. Review the checklist with the owner and hold the subcontractor and suppliers final payment contingent on providing responsible items. • Allocate time in the schedule and maintain management staff on the project until closeout is completed and accepted. • Resolve any accounting or change order concerns prior to closeout to ensure payment at the end of the period. • Perform an in-house inspection prior to the owner/architect walk-through to validate the work and minimize punch list items. • Make sure all appropriate stakeholders are present, and sign-off, for commissioning and startup activities. • Understand milestone and contractual issues regarding transfer of building ownership to the end user, items such as control of utilities and liability insurance. • Leverage technology whenever possible by providing video training sessions, electronic copies of manuals and warranties, etc. Following these tips will help contractors enhance their reputation during the closeout process while also protecting their bottom line. For more information about The Hartford’s Surety Bond team, please visit www.thehartford.com/bond. The information provided in this article is intended to be general and advisory in nature. It shall not be construed as legal, human resources, financial, insurance, tax or accounting advice. Readers seeking to resolve specific legal or other business issues related to the information provided in these materials should consult their own attorneys or business advisors. HOW TO E NSUR E A SMOOT H C LOS EOU T By: Dan Bagge, South/Central Division Manager | dan.bagge@thehartford.com | 985-317-9470 LOUISIANA AGC 8

On November 6, 2021, the Louisiana Department of Transportation and Development (DOTD) announced that the state is slated to receive nearly $6 billion from the Infrastructure Investment and Jobs Act (IIJA). The IIJA is the largest dedicated highway and bridge investment since the construction of the interstate highway system. Louisiana is well positioned to compete for billions more. The IIJA is a big win for Louisiana as it will allow the state to advance long overdue and much needed major road and bridge projects. DOTD secretary Shawn Wilson was quoted as saying, “Our state’s infrastructure system is relying solely on a fuel tax that is over 30 years old; as a result, we have a backlog of $15 billion in road and bridge repairs that will never be eliminated with the current gas tax. In recent years, we have relied heavily on federal dollars and innovated funding methods, such as public-private partnerships, to continue investing in our aging transportation system. Not only will this Act benefit infrastructure projects, but it will greatly help our multimodal systems such as our waterways, ports, and rail systems.” Of the $6 billion slated for Louisiana from the IIJA, $4.8 billion is allocated to highways; $1.01 billion to bridges; $470 million to public transportation; and $179 million to airports. This is all great news for our construction industry. The challenge for contractors has to do with COVID-19. Amidst the throes of a significant lack of available manpower to the construction industry, President Biden directed the Occupational Safety and Health Administration (OSHA) to implement a nationwide vaccine mandate requiring all employers with over 100 employees to require vaccination or weekly testing. Employees who refused to be vaccinated or tested would be subject to termination or the employer fined. Fortunately for private industry, this mandate was challenged. On January 13, 2022, the United States Supreme Court stayed the Biden mandate finding that OSHA and the federal government had overreached. In the January 13 decision, the Court stated, “The central question we face today is: Who decides? No one doubts that the COVID-19 mandate has posed challenges for America. Or that our state, local, and national governments still have roles to play in combating the disease. The only question is whether an administrative agency in Washington, one charged with overseeing workplace safety, may mandate the vaccination or regular testing for 84 million people. Or whether that work belongs to state and local governments and the people’s elected representatives.” The Court went on to state, “Although COVID-19 is a risk that occurs in many workplaces, it is not an occupational hazard in most. That kind of universal risk is no different from the day-to-day dangers that all face from crime, air pollution, or any number of communicable diseases. Permitting OSHA to regulate the hazards of daily life simply because most Americans have jobs and face those same risks while on the clock would significantly expand OSHA’s regulatory authority without clear Congressional authorization. The question before us is not how to respond to the pandemic, but who holds the power to do so. The answer is clear: under the law as it stands today, that power rests with the states and Congress, not OSHA.” Thanks to the Supreme Court, another Washington bureaucratic impediment has been avoided. While the industry can continue to expect challenges from federal agencies, the horizon still looks bright for building and construction in Louisiana because of the greatest influx of federal dollars in decades. Louisiana Construction Industry 2022 Outlook AT LINCOLN BUILDERS, we understand the importance of our people and the impacts they make on our team and our clients. Michael Byrne, a 14-year tenured assistant project manager, lost his 3-1/2-year-old son Logan to Rett Syndrome as our VCOM Louisiana project in Monroe entered the final stretch. His impact on the project was evident last month as the client invited Lincoln Builders, and specifically Michael and his family, to the dedication of Logan’s Balcony on the facility’s second floor. Dr. Ray Morrison, the college dean who worked closely with Michael, tells the story best as he addressed Michael’s family and those present. “When Rett Syndrome took the life of Logan Byrne, his dad Michael was fully entrenched in the many complex details of the final months of the construction of the new VCOM facility. Michael oversaw many individuals, multiple work crews and many pages of blueprints, and a tight deadline on over 100,000 SF of highly technical construction. While the family was going through the heartbreak of losing his son, VCOM was celebrating the beginning of this new campus. We’ve never forgotten the devotion Michael and his colleagues at Lincoln Builders gave us in full measure during the last few months of Logan’s life and the first few months of their life without him. In memory of Logan, we at VCOM Louisiana campus want his name and his life story to be a part of this place overlooking the beautiful Louisiana bayou.” Lincoln looks forward to 2022 and beyond as we bui ld not just bui ldings, but more importantly, relationships. #liftingupLogan #ILoveaBOYwithRett Michael, Samantha and Trey Byrne at Logan’s memorial plaque. Building Buildings and Relationships LOUISIANA AGC 9

AS MANY OF THE READERS here know, contractors often have problems getting public entities to pay timely. Under La. R.S. § 38:2191(B), the public entity must pay within 45 days of receipt of a certified pay application or a clear lien certificate. However, § 38:2191(D) allows a public owner to withhold any progress stage payment if it has “reasonable cause.” This essentially amounts to an arbitrary standard that may allow the public owner to withhold payment for a myriad of reasons. Likewise, final payment is due after formal final acceptance and within 45 days following receipt of a clear lien certificate by the public entity. At the outset, it is important to note that the standard for payment of progress payments and final payments is different. However, the issue of when final payment is due has become subject to much debate and caused a split in the Louisiana appellate circuits. Specifically, the question of whether an owner can withhold liquidated damages from final payment is unresolved by the Louisiana Supreme Court. Below are two key examples of the debate surrounding La. R.S. 38:2191. Fourth Circuit In Woodrow Wilson Constr. LLC vs. Orleans Par. Sch. Bd., the Fourth Circuit held that the public owner could not withhold liquidated damages from any amounts sought by the contractor under La. R.S. 38:2191. The court found that asserting a separate claim for damages to disrupt the mandamus action would render § 38:2191 meaningless. Therefore, the Court held that an owner must pay the full amount owed and then bring a separate action to prove the contractor is liable for the delays and therefore, liquidated damages. First Circuit Contrary to Woodrow Wilson, the First Circuit in Law Indus., LLC v. Bd. of Supervisors of Louisiana State University found that if the plaintiff brings a mandamus proceeding under § 2191, the trial court must determine all competing claims in a summary proceeding to determine what net sum is owed under the contract, including any right to withhold liquidated damages. Following Law Indus., LLC’s reasoning, the First Circuit in Coast 2 Coast Construction, LLC vs. Par. of St. Tammany, held that the lower court was required to consider the public entity’s counterclaim for liquidated damages in the same mandamus proceeding that it determined the amount due to the contractor. Under this interpretation, a court must decide both contractor and public owner’s claims in the same mandamus summary proceeding. However, as noted in the Law Indus. dissent, “[t]his approach merges the ordinary proceeding with the highly restricted mandamus summary proceeding and thwarts the legislative intent of La. R.S. § 38:2191 for public entities to promptly pay monies owed under public contracts.” Legislation May Be Needed to Resolve the Circuit Split and Adopt the Same Standard for Progress Payments Given this circuit split, uncertainty remains as to whether a contractor is entitled to a mandamus proceeding to recover monies owed under a contract with a public entity, while requiring the public entity to bring a separate claim for liquidated damages, or alternatively, whether all claims and defenses relating to payment owed must be tried summarily together. Currently, since the Supreme Court has not clarified the issue, legislative clarification may be needed to help resolve this circuit split. In addition, as long as the “reasonable cause” standard is undefined, then the ability of the Contractor to use the mandamus for a progress payment is limited. Publ ic Owners Not Paying Contractors Timely — Should Ti t le 38 Be Amended? By: Christopher K. LeMieux and Jonathan S. Forester Lafayette/Lake Charles: 2022 Lead Off It’s a new year and, despite the constant aggravation of COVID, there is reason for optimism. Due to the infrastructure bill that passed, Louisiana has received more money for state work than it has in a long time. This means that those companies doing public work will have a lot to look forward to this year and for the next several years to come. In my conversations with our members, the general consensus is that there is no shortage of private work either. These two factors should make for a busy and prosperous 2022. Fingers crossed. There are issues though that need to be addressed, and LAGC is actively working to solve them. • M any companies are experiencing a worker shortage. This is due to COVID measures that made it more profitable to stay home than to work. Workers are slowly returning to the workplace, but not quickly enough. To address this, LAGC representatives have been visiting area high schools to encourage those who are not planning on going to college to take a look at the construction field. • T here is also the problem of increasing prices for material. There really is no good answer to this problem. LAGC is working with our members and public entities to make the use of escalation/de-escalation clauses in contracts more acceptable. This approach has not been widely accepted as of yet. Our best advice is to work it out with the owner to front load all of the materials for the job as soon as you are awarded said job. This will serve to head off any price increases between the time the job is let and work begins. It isn’t an ideal fix for the problem, but it’s the best solution at this time. OUR 2022 PLANS FOR LAGC MEMBERS DAVID LANDRENEAU’S AREA MANGER UPDATE LOUISIANA AGC 10

LOUISIANA AGC 11 “ HEY, WON’T YOU PLAY…?” Another “highway construction project gone wrong” song. That was the description of the project offered up by the United States Fifth Circuit Court of Appeals (in New Orleans) in its reversal of a district court decision which had initially absolved an insurer of any duty to defend the general contractor on the road job. Five years after the construction of a 41-mile Texas highway, the general contractor was sued (actually, arbitration was filed by the “developer” of the roadway) alleging that the constructed highway had prematurely fallen into disrepair. A portion of the claim treaded upon “moderate erosion caused by [a] deck drainage outlet pipe” constructed by a subcontractor. In connection therewith, the GC’s own Commercial General Liability (CGL) carrier demanded defense by the sub’s CGL carrier, in which latter policy the general contractor was named as an additional insured. Concerning the question of the duty to defend by the sub’s CGL, the lower court (adopting a magistrate’s recommendation) found that “some of the Developer’s allegations concerned damage to [the sub’s] own work, which was expressly excluded from the Policy’s coverage; that the Developer never alleged [the sub] caused the complained-of defects; and that some of the Developer’s allegations could only hypothetically implicate [the sub’s] work.” Reversing the lower court, the Court of Appeals found in part that the lack of an express allegation directed at the subcontractor itself did not rule out the possibility of coverage, and also that the work-product exclusion (excluding coverage for damage to the work of the subcontractor) was not implicated when the subcontractor’s work conceivably “caused damage to work other than its own.” “Complicated as this might seem, the web of the insurance contracts creates a relatively straightforward question: Do the Developer’s claims against [the GC] in the underlying arbitration potentially implicate [the sub’s] drainage-system work, such that [the sub’s] insurer (Arch) owes a duty to defend the additional insured…? The answer is yes. …The Developer’s claims against the Project’s general contractor implicate defective construction of the Project’s drainage systems. [The sub] constructed those drainage systems. Therefore, [the sub’s] CGL insurer (Arch) owes a duty to defend the general contractor… in its underlying litigation with the Developer.” Zurich Am. Ins. Co. v. Arch Ins. Co., 2021 U.S. App. LEXIS 36916 (5th Cir. December 14, 2021) WILL THIS EVER END? A lien claimant on construction project in New Orleans sought summary judgment concerning alleged ineffectiveness of a lien prohibition in its subcontract. The motion was not geared at legality/illegality of the in-advance waiver of liens. Rather, the sub argued that the incorporation of terms from the upstream general contract was of no effect: because the upstream contract was invalid/null (the general contractor was not properly licensed when it entered its agreement). The federal court, taking into account all the above (and even assuming the invalidity of the upstream contract), refused to grant summary judgment in favor of the sub. According to the court, even if the upstream contract was invalid, the subcontract very specifically incorporated lien prohibition language from that document as “if [the words] had been ‘re-typed’ into the [subcontract] and without regard to whether the Master Agreement itself was enforceable by either of the parties to that agreement.” Prolonging the agony, the court denied a later motion for summary judgment (MSJ) by the sub on roughly the same grounds (alleging the invalidity of an upstream underlying lease). An interesting prior twist: earlier in the case, summary judgment sought by the general contractor against the subcontractor on the same lien prohibition provision had been denied. Notwithstanding the apparent in-advance lien waiver, the court was persuaded that if the general contractor had breached the subcontract, the net result could be “dissolution” of the subcontract – which could have the effect of relieving the subcontractor of the lien waiver provision. The subsequent MSJ denial is reported at: 2021 U.S. Dist. LEXIS 155000 (E.D. La. 2021). The earlier summary judgment ruling is reported at: 2021 U.S. Dist. LEXIS 13679 (E.D. La. 2021). Daniel Lund, III Partner Phelps Dunbar LLP

According to a Q3 2021 U.S. Chamber of Commerce report, 55% of contractors struggle finding skilled workers. 93% believe the labor shortage will continue or worsen far into 2022. In the face of these challenges, the construction industry can leverage equipment management and other technologies to attract and retain skilled workers. Optimize Equipment Uptime with Telematics In addition to reduced productivity and operational schedule slips, labor shortages can mean fewer workers use and oversee the company’s valuable equipment. Stringent fleet maintenance can ensure equipment is accessible and in working condition. Equipment management software aids contractors in improving the operational efficiency of labor crews, mechanics, and office staff by giving them an easy tool to complete their jobs faster and more efficiently. Construction-focused, integrated equipment tracking solutions allow contractors to track and manage all essential assets with ease, so employees spend less of their valuable time trying to locate assets they need. Equipment Management Technology Can Help Overcome the Effects of Construction Labor Shortages Knowing equipment location and status allows for improved maintenance schedules. Well-maintained equipment optimizes utilization and uptime and keeps the workforce focused on productivity instead of repairs. Tenna is committed to continually providing the most up-to-date, valuable equipment management solutions to contractors with mixed fleets. Contact Michael Weaver at Tenna to learn more. mweaver@tenna.com — www.tenna.com LOUISIANA AGC 12

F ounded in 1927, Gallagher has grown to be one of the leading insurance brokerage and risk management companies in the world. Due to the unique risks of the construction industry, Gallagher has assembled a Mid-South construction team focused on the needs of contractors and subcontractors. This team has developed surety, insurance and risk management programs for all types and sizes of construction projects, from office buildings to sports arenas and infrastructure projects. Unlike most brokers, Gallagher supplements its team of licensed professionals with very unique industry insiders, like former in-house General Counsel and Risk Managers for large construction companies. This approach allows our brokers both the ability to bring a contractor’s perspective to our clients’ insurance and risk management needs, and to give you a broad breadth of experience when things go poorly on a project. Our approach includes looking at our clients’ contracts, preferably during the negotiation phase. Many owners are placing unrealistic insurance provisions in their contracts because they do not understand what the market can provide or how it will affect project costs. Also, as part of the underwriting process, sureties are now looking at whether the contract contains overall limitations of liability and mutual waivers of consequential damages. Such surety requirements put a constraint on what contractors can agree to provide, and we work with our clients to help explain these constraints to the owners. Our in-house industry experts play a crucial role in supporting our clients. First, they supplement the experience of our contract client’s team in identifying and reviewing exposures to financial losses. This helps our licensed professionals recommend insurance coverages. Second, when claims arise — and they inevitably will — we use this same experience to provide advice on how to mitigate losses and maximize coverage for your claim. We also work with our clients to address individual issues making coverage difficult or costly. For example, one contractor client was having difficulty getting insurance due to its safety record. We connected the contractor with various safety experts to help revamp and launch a new safety program. This significantly helped that client with their future insurance needs. COVID-19 has added a new layer of risk as contractors must adopt to the ever-changing legal requirements. In a stable legal environment, many contractors ignored the importance of a change-in-law clause in their contracts. Now a change in law, such as a stop-work order or vaccination mandates, can have a devastating impact on your ability to perform. Many sureties now require contracts to have a change-in-law clause in bonded contracts, and Gallagher has been working with our clients to make sure they have these provisions in place so bonds can be issued. Cybersecurity is yet another emerging area of risk. This insurance has become much more expensive and harder to get. As part of our program, we first help identify where cyber risks may occur, and then we advise our contractor clients on what they need to do to obtain cyber liability insurance at the cheapest possible rates. Government contractors working with the Department of Defense (DOD) face looming deadlines with Cybersecurity Maturity Model Certification (CMMC) 2.0, and we work with our clients to better understand how such requirements affect not just cyber liability, but also performance under their bonds. RISK MANAGEMENT IN 2022 After enduring a year marred with the uncertainty of COVID regulations, local elections, and project availability, we at LAGC have a lot to be thankful for and more to look forward to in the year that lies ahead. Even with all the change that has affected so many of our member companies, and LAGC as well, there is a great comfort in knowing this association remains a trendsetting and problem-solving voice for the construction industry statewide. In the New Orleans area, we are continuing the heavy lift of working with municipal officials and ensuring projects are bid, built, and billed as smoothly and lawfully as possible. To this end, with the incoming City Council seeing five of its seats change over, LAGC is looking forward to hosting a Public Bid Law/Contracting with City of New Orleans Seminar to establish working relationships and educate members on some of the details of our work. The intention is to help this independent Council craft ordinances on our industry from an informed perspective. All seven members have been made contact with, and the seminar will take place early in the new year before they take their seats. Additionally, LAGC in New Orleans is cultivating working relationships with the Women Business Enterprise Council (WBEC) to potentially open doors for increasing membership rolls. Members will have opportunity to become more familiar with WBEC and its members in the year ahead. The upcoming schedule of events for 2022 will also provide a plethora of opportunities for members to take full advantage of all the reasons LAGC exists. We look forward to continuing to serve you. OUR 2022 PLANS FOR LAGC MEMBERS ANDRE KELLY’S AREA MANAGER UPDATE LOUISIANA AGC 13

Over its history, LAGC and its predecessor organizations have been formidable advocates for the construction industry, seeking to protect the rights of contractors on public and private work projects to mitigate and allocate risks equitably between owners and contractors. This effort takes the form of legislation, as well as in the courts when necessary, in order to pursue the interest of the contractor. In Louisiana, legislation is particularly important because Louisiana law is largely based on codes and statutes. However, once statutes have been enacted into law, those provisions must be properly applied and construed. The courts sometimes need LAGC’s help to do so. LAGC’s judicial advocacy most often takes the form of an amicus curiae briefing. Some of the important legislation passed due to the efforts of LAGC include: •  La. R.S. 9:2771, the Design Sufficiency Law which was originally passed in 1959 to provide immunity to contractors for deficiencies in plans and specifications. It was amended in 1960 to prohibit waiver by contract. •  La. R.S. 38:2211, et seq, the Louisiana Public Bid Law has undergone numerous changes and amendments under the watchful eye of LAGC. One notable legislative effort was the enactment of the uniform bid form legislation designed to reduce the number of bid disputes by creating a “bright line.” •  La. R.S. 38:2216H which prohibits contract clauses that waive, extinguish, or relinquish the contractor’s rights to recover delay damages caused, in whole or in part, by a public owner. That legislation not only benefits the contractor but also taxpayers. Much like the federally mandated differing site conditions clause, it allows contractors to bid its best price without a contingency for delays that may ensue that are beyond the contractor’s ability to control. •  La. R.S. 9:2780.1, the Anti-indemnity Statute requires each party to accept and cover their own liability. •  Prompt Payment Legislation, such as the mandamus provisions of La. R.S. 38:2191, and La. R.S. 38:2248 limiting the withholding of retainage. •  La. R.S. 38:2241 establishing the statutory nature of the payment bond on public work contracts to make uniform the liability of sureties for payments due for subcontractors and materialmen. These successful efforts, as well as others, have been achieved due to not only the willingness of staff, consultants, counsel, and others working for LAGC to pursue these efforts tirelessly, but also because of support and participation of the membership. The times we live in require continued vigilance to not only protect the statutes and laws enacted heretofore, but also to come to grips with continued emerging problems that require LAGC’s attention, whether in the legislature or in the courts. One of the components that is key to the success of these efforts is the continued support of members of LAGC. Many of these provisions were passed because scores of members showed up at the legislature to testify and stand together to support the effort by LAGC’s advocates. Member support is needed now more so than ever to deal with the problems of the day. No other Louisiana trade association or group has been as vocal or as effective for the Louisiana contractor as has been LAGC. The Executive Director, Ken Naquin, has identified some of the current issues of concern. These include: •  How do contractors get paid by public entities even with a valid final judgment in hand? •  How do we solve the dilemma created by certain case precedents, such as Glencoe, which requires that the bonding company pay subcontractors and suppliers, even when the owner has failed to pay the contractor for the work? •  How do we reign in the misuse and abuse of liquidated damage provisions by public owners, who attempt to “strong-arm” contractors when seeking to be paid for their work or for valid claims? It has long been recognized that industry-wide issues require industry-wide support. While the pandemic may have forced us into our own “bubbles” that does not have to diminish or reduce the efforts of LAGC to tackle these and other industry issues. Now, perhaps more than ever before, participation and action by its members is required to support LAGC’s efforts on behalf of the industry. Russel W. Wray is an attorney and owner of Wray & Associates (www.wraylaw.com) and practices in Louisiana. This article is informational and should not be used as legal advice. One should independently consult with an attorney, prior to relying on any of the information provided herein. Wray & Associates ©2022. ADDRESSING INDUSTRY ISSUES IN 2022 LOUISIANA AGC 14

Event Restroom is much more than just an “Event” Restroom company. We are a local ly owned and operated business that offers more than 14 years of experience in the south Louisiana marketplace. We take pride in del ivering top-notch customer service to businesses of al l sizes. We have worked tirelessly to become Louisiana’s leader in the Portable Restroom industry, not only by providing superb service and rapid response time to customer’s needs, but by providing a higher qual ity of standards. Our extensive inventory includes high-rise kits, temporary fencing, portable toi lets, restroom trai lers, fresh water and waste tanks, handwash stations, sani-stands, shower trai lers, rol l-off containers, and pump service, making your project a one-stop shop. Whi le the construction industry is at the forefront of our business, we are also proud to say that we partner with local and state-wide festivals, fairs, special/private events and emergency and disaster rel ief sites. LAGC is the voice of the Louisiana construction industry, and we’d l ike to think we hold the same integrity, providing qual ity service and meeting the needs of each one of our cl ients. Your Business. Our Purpose. BOONE SERVICES, LLC vs. ASCENSION PARISH GOVERNMENT, ET AL. , 2021-CA-0524 (LA. APP. 1ST CIR. 12/30/21) By: Denise C. Puente, Joshua D. Ecuyer and Simon, Peragine, Smith & Redfearn, LLP AN AGGRI EVED BIDDER on a public contract sought, and was granted, a permanent injunction on the basis that the parish had improperly awarded the contract to another party. Two contractors had submitted bids for a river construction project in Ascension Parish. However, the lowest bidder failed to include in its bid packet written evidence of the authority of the person signing the bid. The district court found that this was a violation of state law and granted the injunction in favor of the aggrieved bidder. This ruling was appealed to the First Circuit, with the lowest bidder arguing that submitting written evidence of authority to sign the bid was unnecessary under the public bid law. The First Circuit disagreed, finding that to satisfy the requirement of written evidence of authority, the bidder must actually attach that evidence to its bid. The First Circuit rejected the argument that the public bid law could be satisfied by reliance on the fact that the person who signed the bid, an LLC member, clearly had the corporate authority to do so based upon the lowest bidder’s corporate filings with the secretary of state. In short, written evidence of the signer’s authority to sign, be it in the form of a corporate resolution or other means, must be attached to the bid in order to comply with Louisiana public bid law. OMEGA GENERAL CONSTRUCTION, LLC vs. RECREATION AND PARKS COMMISSION FOR THE PARISH OF EAST BATON ROUGE, 2021-CA-0334 (LA. APP. 1ST CIR. , 12/22/21) A PUBL IC OWNER and a general contractor entered into a public works contract pertaining to a construction project in Baton Rouge. During the performance of the contract, several disputes arose as to the project’s design and construction. The owner and contractor then agreed to a change order that added almost half a year to the contract time and reduced the contract sum to account for liquidated damages incurred and for certain punch-list items. Over a year and a half after the parties agreed to the change order, the owner and contractor (and several other parties) entered into a settlement agreement. As part of the settlement, the contractor agreed to compromise “all claims, actions, causes of action, rights, liabilities, obligations, requests and demands of every kind and nature whatsoever” against the public owner to the extent that the claims arose out of or were in any way related to the Project. Following the completion of the project, the contractor filed a petition for mandamus against the owner, claiming that it had withheld the final contract payment. In response, the owner filed an exception of res judicata which was sustained by the trial court. The contractor appealed, arguing that the final payment was illegally withheld. The contractor claimed that La. R.S. 38:2191 both requires public entities to “promptly pay” all contract obligations when due and prohibits the public entity from waiving this obligation. The First Circuit disagreed and affirmed the ruling of the trial court, finding that the statute only prohibits the parties from agreeing to a waiver — not a settlement. There is a difference between waiver and compromise. The court found that the agreement in question was clearly a compromise rather than a waiver, that it did not violate La. R.S. 38:2191, and that the owner’s exception of res judicata was well-founded. In so ruling, the court cited the wide body of law in Louisiana favoring compromise and requiring that there be a clear showing that the compromise violates good morals or the public interest before it can be overturned. LOUISIANA AGC 15

TRACKING TAX CHANGES FOR 2022 THE ESSENT IALS OF BUI LDING A GREAT TEAM AFTER ALMOST TWO YEARS of a constant need to shift and adapt, the construction industry is now more nimble and ready to respond to changes caused by the pandemic, tax law changes, and natural disasters. In this time, companies have been able to take advantage of Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loans (EIDL) and advances, and Employee Retention Credits (ERC) — along with other federal and state incentives — to keep its businesses operational. These programs have expired, and businesses will now be moving forward without these benefits. Hopefully, the New Year will allow businesses to go back to thinking about traditional tax issues and financing structures. There are a few tax items companies need to keep on their radars for 2022 that could impact their bottom lines: Business Meals Through the end of 2022, businesses can claim 100% of their food or beverage expenses paid to restaurants as long as the business owner (or an employee of the business) is present when food or beverages are provided and the expense is not lavish or extravagant under the circumstances. Payroll Taxes The second half of deferred payroll taxes under the Coronavirus Aid, Relief, and Economic Security (CARES) Act must be paid by December 31, 2022. Employers who have not taken advantage of employee retention credits, families first paid sick leave credits or Consolidated Omnibus Budget Reconciliation Act (COBRA) credits should take a look at these programs and amend the applicable payroll tax returns. Louisiana Income Tax Changes Beginning in 2022, the method for calculating Louisiana income tax will change. The deduction for federal income taxes paid has been repealed, replaced with lower tax rates for both individuals and corporations. Corporate tax rates will be 3.5% for the first $50,000 of taxable income, 5.5% for income between $50,000 and $100,000 and 7% for income in excess of $150,000. Franchise tax is eliminated on taxable capital below $300,000, and the rate is reduced to 2.75% on capital above $300,000. •  Partnerships and S-Corporations should consider the Louisiana Pass Through Election which allows an entity level deduction for state income taxes. •  State income tax paid by an individual is subject to the $10,000 limit for state and local taxes as an itemized deduction. During the year, construction companies should be keenly aware of Congressional action. Many items of tax reform that did not pass during 2021 could again be proposed in 2022. HTB Advisors stay abreast of important pending tax changes and stand ready and willing to assist your company. Office dynamics have always been intriguing. How do you bring people with different backgrounds, differing ages and different personalities together for one common goal? It can often times be the key to making your company excel or the cog that holds you back. In my five-plus years of working at LAGC, I’ve been fortunate enough to work with a great group of individuals who work towards a common goal of bettering the construction industry. Reflecting back on the last five years, here are a few things I have learned: Trust: The ability to trust that the individuals working hand in hand with you share the same ultimate goal is essential. It is important that all individuals trust in the shared vision long before you are able see the success. Communicate & Listen: You must be able to communicate and truly listen to what the other person has to say. The more information that is shared, the better chance you have of avoiding missteps along the way. Diversity is a Strength: In looking at the successful working relationships at AGC, one of the most important elements of our team’s success is diversity. If every person has the same strengths and weaknesses, you will have a hard time moving forward. Make a point to evaluate your internal teams. Who can you identify who you could partner together that may have different viewpoints or strengths? Employees’ Personal Investment: The desire to not let teammates down should not be underestimated. I believe that our staff possesses a realization that we can accomplish more together, understanding that while one co-worker may have all the ideas in the world, you need someone else to carry those ideas out in order to be successful. The workplace has evolved so much over the last few years, but one fact has never wavered: teamwork is irreplaceable. By: Lauren Fain and Michael Demouy LOUISIANA AGC 16

RkJQdWJsaXNoZXIy MzM2NTU=