On June 20, 2014, the California legislature adopted SB 854, a “budget bill” that was heavily negotiated and tied to the approval of the state budget. Included among a variety of unrelated provisions in the lengthy bill were a number of additions and changes to the California Labor Code which will revamp the monitoring of public works projects throughout California through the Department of Industrial Relations (“DIR”).

SB 854 creates a new public works monitoring scheme for the DIR. While the DIR has been charged with establishing and enforcing prevailing wage requirements for number of years, the new scheme will place more responsibility on the DIR. This alert will summarize the new requirements for both public agencies and contractors.
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On August 8, 2011, the 1st District Court of Appeal broke new ground when it published a decision holding that Phase 2 of the Presidio Parkway project can move forward as a public-private partnership (P3). The Presidio Parkway Project is the first project to reach award under California’s new public-private partnership statute, Streets and Highways Code section 143. The project was challenged on three separate grounds by the Professional Engineers in California Government (PECG), an engineers’ union. The Court of Appeal affirmed the trial court’s ruling approving the California Department of Transportation’s (Caltrans) use of the new statute, and should encourage the consideration of P3s as a project delivery method in California.

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The Professional Engineers in California Government, the union representing state engineers, has filed suit to stop the project to replace Doyle Drive, the 1.6 mile highway that connects the Golden Gate Bridge with the City of San Francisco. The lawsuit alleges that the project impermissibly uses a Private Public Partnership (P3) contrary to the State law authorizing the project. Instead, the engineers union asserts that the project should be awarded to the lowest bidder pursuant to a traditional design-bid-build process, with the design component being performed by State engineers.  Under the current arrangement, Hochtief Concessions and Meridiam Infrastructure will design, construct, operate and maintain the road.

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When a homeowners sues a subcontractor for damage caused by the defective waterproofing work on retaining walls that the subcontractor installed, is it a complete answer for the subcontractor to say that it did exactly what the general contractor told them to do (regardless of what the standard of care is) and that the general contractor was satisfied with its work when it finished the job? A recent case holds that it is not.


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