THE ASSOCIATED GENERAL CONTRACTORS OF ILLINOIS

Construction News

May 25, 2018

ASSOCIATION NEWS

Capitol News.  The optimism meter continues to rise in the Capitol on getting a budget deal done on time (May 31st).  Which probably means we are due for a blowup somewhere today.  It looks like legislators will not work through the entire weekend, but will get a day or two off before returning to Springfield to ratify the work of the budgeteers and leaders.  Hopefully.

As happens so often in the closing days of the Session, last minute legislation gets introduced that may effect our members.  SB 203 – Lightford, is an IDOL initiative that will piggyback on the Certified Payroll data collected by the IDOT on all of your jobs.  IDOL will further seek to add gender, race, ethnicity and veteran status to the information collected on certified payroll.  IDOT will be required to send the new certified payroll to IDOL.  Further, IDOL seeks the authority in this bill to recommend goals for contractors workforce.  While they have no enforcement powers under this bill, it potentially puts agencies and contractors in conflict, as we are required to meet or try to meet the aspirational goals set by the awarding agency (IDOT, Tollway, CDB).  AGCI opposed this legislation.

In other news, S 2610 – Clayborne, (to be amended) will require local units of government who receive more than $2 million annually in MFT, to begin implementing an MBE/DBE program that is substantially similar to the IDOT MBE/DBE program.  These units of government will have 2 years to implement the new programs.  As part of the negotiations, it was agreed that sub-contractors would now be pre-qualified to perform work on these projects.  Further, the local units of government will attempt to use utilization numbers from IDOT on these projects.

Please see the AGCI websitefor legislation we are tracking.   Mark Strawn, 217.789.1570

Oppose SB 2481.  Will increasing the tort limit to $2.0 million “bankrupt” the Road Fund, obviously not.  Does it have the potential to severely impact the Road Fund ---- clearly yes.

Direct Impact on Department

· The increase from $100,000 to $2,000,000 represents a 2,000 % increase.

· Applies to all cases “sounding in tort” as may be related to virtually anything (i.e. personal injury, death, property damage, etc.).   

· The Court of Claims has previously taken the position that in a death claim or personal injury that there may be multiple claims from the estate, spouse, dependents, etc.  In short, we may be looking at multiples of $2 million.

· Up until now, much litigation has been dismissed as the department is entitled to a setoff or moneys obtained from other sources.  (705 ILCS 505/26)  Since the proposed new limit would be $2 million per each claimant, many more cases will survive the setoff and proceed to hearing or trial against the department.  (Of course this will also be devastating for the General Revenue Fund agencies as well.

· The Court of Claims will now become an attractive forum in which to bring litigation.  There are few venues where plaintiff’s bar would enjoy a $2 million limit (per claimant) against a defendant that has the ability to pay such an award.  Again, be mindful that in some cases with an estate and four “heirs”, we could be looking at a $10,000,000 exposure.

· There will no longer be an incentive to settle claims with the department prior to trial.  The potential open exposure to the department would be astronomical. 

Direct Impact on Contractors

· In tort actions that are related to a construction contract,  the department is named as an additional insured under the contractor’s general liability policy.  Defense of those cases are tendered by the department to the contractor and their insurance carrier.  The department requires general liability coverage of $1,000,000 per claimant/$2,000,000 in aggregate. (See Article 107.27 of the Standard Specifications for Road and Bridge Construction.)  We have found those limits to be less than desirable, but historically adequate given the current Court of Claims statutory limit of $100,000.

· A tort limit increase to  $2.0 million per person, and again, possibly multiple claimants per claim make our present Article 107.27 limits inadequate.  For discussion, I would suggest $10,000,000 be used as that would include $2,000,000 for the estate and $2.000,000 potentially for each of four survivors.  The huge increase in the cap, will clearly result in increased premiums for the contractors to carry the department under the additional insured endorsements.

· All general liability policies contain an element of risk retention for the contractor, otherwise the premiums would be unaffordable.  That element of risk retention means that the contractor is financially responsible for the first …..$xxxx dollars of any claim settlement or judgment.  When the cap was $100,000 per claimant, the potential self-insured retention was maybe maxed out at roughly $100,000-500,000.  If the contractor has a larger risk retention, an adverse judgment or settlement could be financially devastating for the contractor.

· If SB 2841 passes, I would absolutely recommend that the department revise Article 107.27 from $1,000,000/2,000,000 to $5,000,000/$10,000,000.  That increase will come at an increased premium cost to the contractor.  Costs and expenses under Article 107.27 are considered incidental to the contract.

Direct Impact on Subcontractors, Especially DBE firms

· Article 107.27 (see above) is incorporated, by reference, into every contract between the department and the contractor.  The department’s contract, specifications, etc. are incorporated into each subcontract agreement from the contractor to the subcontractor.

· I don’t believe that smaller contractors and especially DBE’s will be able to afford the burden of additional insurance premium expense.  Smaller contractors and DBE’s will not have the contract volume over which to spread the increased costs.

· During these times when it is so difficult to cultivate DBE firms that will exist and flourish, I see these additional costs as a major barrier that will likely cause collapse.

Increased Cost to the State

Such an extraordinary increase in the cap will solicit the plaintiff’s bar to bring every case imaginable to the Court.  The Court of Claims staff, the Assistant Attorneys General, the agencies investigative staffs all will be woefully inadequate to respond to this burden.  As to the department, and the Road Fund, I would expect we would need an additional 25-30 full time staff to perform field investigations, research and prepare for the volume.

Final Summary

SB 2481 is a threat to the already strained State of Illinois budget.  SB 2481 will directly impact available Road Funds, increase costs to contractors and reduce the limited pool of DBE subcontractors and possibly competition as well.

Please see the AGCI website for legislation we are tracking.   Mark Strawn, 217.789.1570

 

On May 17th the AGCI Leadership Academy toured the Capitol with Mark Strawn and Bill Frey.  They met with the Governor's policy advisor on transportation.  Back at the AGCI office Bill gave a presentation on transportation funding and Mike Matejka gave a presentation on the history of transportation in Illinois. 

Frank C. Tyrolt Education Foundation Golf Outing.  Mark your calendars and dust off your golf clubs because it’s time to TEE UP at the Frank C. Tyrolt Education Foundation Golf Outing on Friday, June 22nd at The Rail Golf Course in Springfield.  Shotgun start at 9:00 a.m.  Lunch to be served after golf .. And you don’t want to miss this delicious lunch! 

More information is included on the attached registration form including sponsorship opportunities.  Remember the proceeds from this outing benefit our scholarship program so your participation is greatly appreciated.

Concrete Flatwork Finisher/Technician Certification Course. IRMCA presents the ACI (American Concrete Institute) Concrete Flatwork Finisher/Technician Certification course.  Many jobs now require ACI Flatwork Certification.  IRMCA is hosting the instruction and review class on June 27 with two options to take the exam on the 28thor 29th.  The course begins on Wednesday June 27that 12:30 p.m. and concludes 4:30 p.m.  We’re providing two testing opportunities on Thursday or Friday to better fit your work schedule. Please select the testing dates that work best for you.  Be sure to register early.  As soon as we receive your registration form we will mail your textbook to give you plenty of time to review.  The textbook, exam and certification are all included in your registration fee.

If you would like the Finisher status, you must complete the work experience form (attached).  Please return the work experience form with the registration form or bring the work experience form with you to the class. 

For registration and fees please see the attached form or go online to http://www.irmca.org/news/profile/irmca-presents-aci-flatwork-certification-june-27-29-2018.

AGCI Email.  As reported earlier, the email for sdokey@agcil.org was compromised by a phishing attempt.  That matter has been resolved and it is now safe to accept emails from this account.  Many email servers have banned this email account.  Please whitelist the email account if necessary.  Thanks for your cooperation.  We apology for any inconvenience this has made. 

Elimination of Traffic Hazards.  IDOT reminds contractors that heavy traffic is expected during the Memorial Day period.  Insofar as possible, traffic hazards should be eliminated on construction and maintenance work during the period.  In accordance with Article 107.09 of the Standard Specifications, the holiday period will be from:

May 25—Friday—3:00 p.m. to

May 28—Monday—11:59 p.m.

All contractors on all types of contracts and all maintenance forces should be instructed to plan their work during the holiday period in accordance with the provisions of Article 107.09.  Since the largest percentage of holiday traffic is carried on Interstate and other rural multilane highways, particular attention should be given to eliminating closures on these routes unless physically precluded by stage construction or exempted by the contract provisions.

Detour runarounds should be inspected for pavement markings, signing, and needed surface repairs.  Marked detours should be checked for proper signing and directional information.

Education Foundation Sporting Clays.  We had 31 shooters participate in the sporting clays outing on May 18th.  We raised over $1,500 for the scholarship fund.  Thank you to all who participated.  Congratulations to the top shooters:

1st         Rick Conrad

2nd        Kyle McDowell

3rd         Adam Bruner

4th         Jim Bruner

5th         Aaron Weatherholt

Special thanks to our sponsors:  Altorfer, Inc. and Roland Machinery.  And to Mississippi Valley Equipment for donating $600 in gift certificates.

 

 
 

 

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