Dealing with the Opioid Threat in the Construction Industry

Bridget Blinn-Spears | Nexsen Pruet

Opioids pose a substantial threat to the construction industry. According to the National Institute of Occupational Safety and Health (NIOSH), “Opioids have commonly been prescribed to construction workers to treat pain caused by these occupational injuries. Workers in the industry also have higher rates of opioid overdose death compared with other groups.”

The hard physical work undertaken in construction jobs can lead to injuries for which doctors may prescribe strong prescription drugs. Workers can become addicted to these substances and related street drugs like heroin. Additionally, construction workers are more likely to use drugs than workers in other professions, Science Daily reported, based on a study published in the journal Drug and Alcohol Dependence. According to the study’s lead author, New York University Associate Professor of Epidemiology Danielle Ompad, drug testing cannot distinguish between recreational and medicinal use of opioids (or marijuana). Ompad suggested that “prevention and harm reduction programming is needed to prevent drug-related risks and mortality” in construction workers.

A recent article in the Wall Street Journal highlighted connections between the increase in opioid use, deaths from overdoses during the COVID-19 pandemic, and the shortage of manual labor already facing the construction industry. Even before the pandemic, deaths due to drug overdoses were on the rise across the country. South Carolina’s governor declared the state’s opioid crisis a public health emergency in 2017 and established a team that developed a response plan. North Carolina also has an action plan addressing its opioid crisis.

As construction employers work to keep their job sites safe and productive, they should keep in mind some key points regarding employee drug use:

  • Recovering addicts (and employees properly using prescription drugs) may be protected under the Americans with Disabilities Act (although illegal drug use is never protected).
  • Leave to seek treatment for substance abuse is ordinarily covered by the Family and Medical Leave Act.
  • The Occupational Safety and Health Administration has focused in recent years on post-accident drug testing. The agency encourages testing when there is reasonable suspicion that drug use was a factor in a workplace accident or injury when post-accident drug testing is part of the established safety culture of a company. The testing cannot be used to penalize an employee for reporting injuries or illnesses.
  • North and South Carolina permit employers to screen for drugs and alcohol but impose technical requirements on sample collection and testing methods.

Employers should already have clear policies regarding drug use and testing. Well-drafted policies can be helpful in dealing with workers’ compensation and unemployment benefits claims. In addition to legal compliance, construction employers benefit from establishing employee assistance programs or otherwise determining how to refer employees for help with substance abuse problems. Employees who seek treatment for addiction may be able to remain in the workforce without posing a threat to themselves or others with appropriate monitoring and support. NIOSH points construction employers to resources provided by the Center for Construction Research and Training (CPWR) to help combat opioid use in the workplace. CPWR also offers PDF alerts that employers can post to increase employee awareness of issues around opioids.

In response to the opioid crisis, which has been exacerbated by the current pandemic, employers should ensure that their supervisors and managers are trained to recognize signs of impairment and addiction; are prepared to take effective action in a crisis; and know-how to properly document ongoing performance issues, misconduct, attendance problems, and other concerns that could be related to substance abuse. Each substance abuse issue is complex and nuanced, and employers should seek legal counsel when navigating substance abuse issues.

10 Steps for Out-of-State Contractors to Get Licensed in Florida Without an Exam

Jason S. Lambert | Dinsmore

In July 2020, Florida changed its contractor licensing statute to make it easier for contractors who have been licensed in other states for at least 10 years to obtain a Florida contractor license without having to take a licensing exam. While Florida has not entered into any formal reciprocity agreements with other states, we do finally have guidance on exactly how to apply for a Florida contractor license using an existing license from another state. The good news is: It’s a much simpler process than anticipated and does not require a licensing exam.

The new 10-year rule applies to nearly every type of contractor license in Florida, including residential, builder, general, HVAC, plumbing, pool, electrical, and specialty contractors. Out-of-state license holders must meet the following requirements to become a licensed Florida contractor:

  1. Have been licensed in their state for 10 years in the same category that they will be applying for in Florida.
  2. The existing license must be active or have been active within the last two years.
  3. For certified general, building, residential, and roofing contractors, take a two-hour Department of Business and Professional Regulation-approved (DBPR) course on the Florida Building Code, including information on wind mitigation techniques.
  4. Pay a filing fee to the Florida DBPR.
  5. Obtain electronic fingerprints from an Florida Department of Law Enforcement-approved vendor.
  6. Submit a personal credit report (NOTE: If your credit score is below 660, you will need to obtain a contractor’s bond in the amount of $10,000-$20,000, depending on license type. This can be cut in half by taking a 14-hour financial responsibility course).
  7. If you plan to operate in Florida through a business entity, you must also submit a credit report for your business.
  8. Pass a background check.
  9. Have commercial general liability insurance with limits ranging from $100,000 to $300,000, depending on license type.
  10. Obtain workers’ compensation insurance or be exempt.

It appears that Florida is now fully open for business for licensed contractors in other states to obtain a license and begin work in Florida. 

Seven Legal Considerations for Constructing Healthcare Facilities

Virginia Trunkes | Healthcare Facilities Today

The current health crisis has healthcare institutions altering their approach to facility design and construction. Equity investors and contractors are also ready to familiarize themselves with healthcare construction. While opportunities abound, certain legal considerations are of paramount importance for a successful healthcare construction project. Here are seven considerations when embarking on this new venture. 

  1. 1. What is the End Game?

Early engagement on construction project requirements is crucial, and not just for discussing how to develop and construct the facility. First, focus on the “what,” and consider in the earliest stages what is the desired end state, and what are the key trigger points. Be realistic about the limiting factors that can result in added cost and time, for example, distant utility-connection points, minimal parking availability, etc. 

  1. 2. Special Early Project Considerations Specifically for Health Care Facilities

Procurement of funding, zoning and environmental constraints, and labor and material costs are all important early considerations, but so too is assessing whether a state’s “pre-approval” is necessary to construct a new healthcare facility. More than half of the United States operates a Certificate of Need (CON) program. CON laws regulate the establishment or expansion of healthcare facilities and services in a given area by approving their major capital expenditures. (The goal is to control health care costs by restricting duplicative services and assessing a community need, to prevent “empty beds” from increasing prices on the patients who do use the services.) 

If a desirable site is in a state subject to the CON process, and the public health department is considering new applications for the type of facility envisioned, then become familiar with the requirements of the CON process. Some states have a two-step process, adding to the timeline of the construction schedule. Understanding how to navigate this process and develop community support is invaluable. 

3. Impact of Regulatory Expectations 

The Centers for Medicare & Medicaid Services (CMS) has concurrent jurisdiction in overseeing facilities that serve patients who are enrolled in Medicare and Medicaid, and also has its own health and safety standards for certification. If achieving accreditation status through the Joint Commission (one of several health-care-facility accrediting organizations approved by CMS), the health care facility must meet standards and undergo a survey process that may exceed the federal requirements for certifications. 

CMS requires compliance with the National Fire Protection Association (NFPA) 101 standards, the “Life Safety Code” (LSC), and NFPA 99 standards, the “Health Care Facilities Code” (HCFC). The LSC provides minimum requirements for the design, operation, and maintenance of buildings and structures, both new and existing, for safety to life from fire. The HCFC provides minimum requirements for healthcare facilities for the installation, inspection, testing, maintenance, performance, and safe practices for facilities, material, equipment, and supplies. These standards then become incorporated into state-specific requirements. The state law must be examined closely, as some states’ public health departments have additional specific requirements. (When state regulations are silent on particular design criteria, the Joint Commission recognizes the Facility Guidelines Institute (FGI) Guidelines for Design and Construction for new construction and renovation projects.)

It is important to communicate upfront as far as what is to be constructed, with communication being continuous between the design and construction teams. Overlooking specific requirements during construction — for example, minimum width of a hallway — could result in denial of accreditation. Having to rebuild a facility by demolishing walls, relocating fixtures and internal conduits, reconfiguring the layout and rebuilding walls is not a hallmark of a successful project. 

The type of facility being constructed will inform which sections of the LSC, NFPA 101 and FGI Guidelines are relevant. The requirements of these Guidelines and in turn government laws, can change. In the past few years, using portions of updated editions of the NFPA, CMS transitioned from an “occupancy-based” approach to a “risk-based” approach. With the risk-based approach, items such as building type, the extent to which a building is fire-rated and outfitted with sprinklers, and a building’s certificate of occupancy status may be equally if not more important than the facility’s floor layout. Keeping apprised of evolving design requirements is essential.

4. Fiduciary Responsibilities

As in any other important financial transaction, the value of the fiduciary responsibility to the health organization cannot be underestimated. Although trust and collegiality gained by working with the same broker, design professionals and construction team on multiple projects may be a blessing, it can also be a curse. A project with a fundamental fatal flaw or concealed design or construction error usually meets a terrible fate. Employees must understand that the client is the health organization (and its funding source), and it is imperative for all participants to adhere to strict standards. The team must also continuously communicate, and  acknowledge and correct deficiencies as they are discovered.

5. Legal Contract Provisions

If any government or lending approvals are necessary before committing to the to-be-constructed space, leases or contracts of sale should include flexible contingency language. Additionally, the healthcare organization’s design and engineering, construction manager/trade contractor and other related labor or vendor agreements should also set expectations for project requirements regarding, among other things: 

  • The scope of work (e.g., in a multi-occupancy building, is building-shell work separate?) 
  • Feasibility issues concerning design, equipment and scheduling (e.g., a multi-tenant premises will have access issues); and 
  • Compliance considerations (e.g., the contracting party’s obligation to be familiar with the local Department of Buildings (DOB) requirements). Just like with the fiduciary status of trusted consultants, contract protections cannot be taken for granted.

6. Internal Corporate Compliance 

Just as healthcare entities need clear, protective terms in contracts with external parties, organizations need to have clear internal corporate compliance standards. Inserting the strictest contract terms is ineffectual if the parties do not enforce them, and for the healthcare organization, that is its employees’ role. It is up to the healthcare organization’s employees to ensure that the contracting parties are complying with their obligations. This is especially true where documents are regularly submitted to government agencies. Memorializing these concepts is recommended, as is the expectation that communications about problem occurrences and their planned resolutions also be memorialized with written correspondence.

7.  Reaching the End Game

If there are local DOB issues in particular, engage local consultants and/or specialists. In some major cities, contractors work with expediters or “Code Consultants,” which is a profession in and of itself. It is a valuable investment to retain people familiar with complex code sections as well as what to expect when seeking DOB approvals.

In sum, plan, consult and memorialize. It is important to have in place an integrated system of design professionals, outside consultants (including lobbyists) and counsel, with free-flowing communication among them, during not only the CON application stage but also the post-CON approval/construction stage, and at substantial completion. If any unanticipated site condition or other hiccup occurs, better to tackle it as early as possible than let it linger through the accrediting agency’s inspection. Like with any other major project, the more that is considered at the outset, the better the likelihood of ultimate success.

The Name of the Game in Design-Build Contracts? Document, Document, Document!

Michael McKenna and Timothy Ryan | Cohen Seglias Pallas Greenhall & Furman

Design-build contracts (and their lesser utilized counterpart—engineering, procurement, and construction (EPC) contracts) are prevalent in the construction industry. Though far from a new contractual relationship, design-build contracts are increasingly chosen by owners in an attempt to reduce risks and costs. The design-build model differs from the “traditional” design-bid-build model in that, with the traditional model, an owner is often very involved in both the initial design of the project and design decisions during the course of construction. An owner is given the opportunity during the design-bid-build process to tweak the design so that it truly becomes what they want. Design issues based on incorrect original assumptions can be worked out with revisions to the design prior to putting it out to bid. Further, in the traditional model, a design professional is generally retained by an owner and serves as the owner’s representative throughout the duration of a project.

In a design-build contract, on the other hand, the process is “streamlined.” At some point, the contractor becomes responsible for both the design and construction of a project. There is no doubt that the owner buys themselves a single point of contact. However, in exchange for that single point of contact and “fixed” price, the owner forgoes the ongoing customization options available in the traditional model. In design-build, once a project goes “hard dollar” (i.e., the owner and the contractor come to a financial agreement), the owner is relegated to a far lesser role, limited to reviewing the contractor’s design documents to see if they meet the technical specifications prior to the start of construction. When the owner and contractor are on the same page with regards to obligations and expectations (and the contract is clearly drafted), the design-build model is a mutually beneficial endeavor. Unfortunately, oftentimes owners blur the lines by cherry-picking the most attractive aspects of each model: a single, guaranteed cost of construction (design-build) while simultaneously desiring to maintain a high level of involvement and implement mid-design/construct changes (traditional model). When an owner begins to blur the lines and overstep their authority, it is imperative for the contractor to document these oversteps because the owner’s actions may constitute a change in the design-build contract warranting additional compensation.

In the Armed Services Board of Contract Appeals (the Board) decision, RBC Construction Corp., the owner of the project required the contractor to provide additional information concerning the proposed design of an underground fire cistern as part of the design review process. Within its contract, RBC Construction was permitted to proceed with construction only upon the owner’s approval of the initial “fast track” design submittals for each construction phase. The primary issue was that the underground fire cistern designs were not a required part of the “fast track” submissions, but instead in the later “interim design package.” Though the Board held that the owner’s actions were reasonable (in light of the risks associated with installing an unground cistern), it also held that the owner’s insistence on receiving the fire cistern design at an earlier point in time interfered with the contractor’s work. This was because, in the interim, while the owner was demanding the fire cistern designs, the owner’s designer would not approve the contractor’s “fast track” submittals. Thus, the contractor could not proceed with construction resulting in time impacts and related costs.

The Board’s holding in RBC Construction Corp. demonstrates why it is important to document project issues with written records. In this instance, the contractor found itself negatively impacted and losing both time and costs due to an overzealous owner. With its thorough and contemporaneous documentation, RBC Construction persuaded the Board that the owner’s active and excessive involvement constituted a constructive change to the contract.

When working on a design-build project, proper written and contemporaneous documentation is vital to ensuring the parties’ contractual obligations are adhered to and that the owner does not overstep their authority and role. There is a surprisingly low number of court decisions addressing design-build contracts. As a result, as played out in RBC Construction Corp., courts generally defer to the language of a contract and require the parties to abide by the contractual language. This puts contractors in a financially dangerous position when an owner starts unilaterally making design and/or construction changes while refusing to pay for those changes. These owners commonly point to the language whereby the cost of construction is “fixed,” and the contractor is responsible for the changes. RBC Construction Corp. demonstrates this is simply not true. Once a contractor’s design is approved and the project goes to “hard dollar,” changes requested by the owner require compensation. RBC Construction Corp. also shows how important it is to document these change requests, as it is a contractor’s burden to demonstrate how the requests changed the design-build contract and impacted time and money.

Rebuilding the West: Construction Considerations After the Smoke Clears

Richard Glucksman and Ravi Mehta | Chapman Glucksman Dean & Roeb

Wildfires have always been a part of life in the western United States, but, in recent years, the frequency and size of wildfires have become staggering. Oregon, Washington, and—in particular—California face drier conditions, making wildfire season longer and more intense.

In these states, among others, prescribed burns (designed to reduce wildfire ignition sources and spreading potential) have been limited or cancelled altogether as the air pollution emitted by these burns may worsen the impact of COVID-19, a respiratory illness in its essence, as noted recently by Science magazine. These circumstances, further compounded by the severe shortage of housing, have created a “perfect storm” in California, which has seen new and denser construction deeper within wildfire-prone areas, prompting a number of key legislative proposals that will impact the rebuilding process after the smoke clears.

The infamous 2018 Camp Fire in northern California made international headlines for decimating the town of Paradise. While the cause of the Camp Fire was determined to be faulty electrical transmission equipment, unusually dry conditions allowed the fire to spread to just over 150,000 acres, and the fire took 17 days to contain.

Then, five of the 20 largest wildfires in California history occurred during the 2020 wildfire season, according to the California Department of Forestry and Fire Protection (Cal Fire). The Camp Fire was eclipsed by the August 2020 Complex Fire, which is the largest wildfire ever recorded in the state, growing to just over one million acres in size until it was finally contained on Nov. 15.

Legislative Response

The Camp Fire and other 2018 wildfires displaced hundreds of thousands of people from their homes throughout California. The unprecedented scale of both the 2018 and the 2020 wildfire seasons in California has spurred legislators in Sacramento to draft a number of important bills that will undoubtedly impact rebuilding efforts.

California AB 38 was prompted by the 2018 California wildfire season and was signed into law by Gov. Gavin Newsom in October 2019. It requires the state fire marshal, the Office of Emergency Services, and Cal Fire to work together to develop and administer a comprehensive wildfire mitigation program, including “cost-effective structure hardening and retrofitting to create fire-resistant homes, businesses, and public buildings.”

Unfortunately, the well-intentioned program has yet to be funded, and may be relying on federal hazard funds from the Federal Emergency Management Agency at a future date. In light of the crippling economic impact of the COVID-19 pandemic, federal funding is likely the only viable source for this important item of legislation.

California SB 182 would enact new building regulations in high fire-risk areas (as determined by the state fire marshal), including new standards for fire-resistive construction, evacuation routes, defensible space, and available water and firefighting resources. It would also prohibit municipalities from approving new construction in high fire-risk areas unless wildfire reduction standards are satisfied. In effect, the bill would discourage new construction in high fire-risk areas.

After passing through both legislative houses, Newsom vetoed the bill, citing its negative impact on the state’s strained supply of affordable housing. However, the bill is likely to be revisited in the 2020-2021 legislative session.

California AB 1516 is a comprehensive bill that would:

  • Create new defensible-space requirements for both new and existing construction in high fire-risk areas.
  • Create a grant-assistance program for fire-prevention education, inspections, and technical assistance.
  • Direct Cal Fire to develop vegetation management recommendations to minimize flammability.

Additionally, the bill would allow insurers providing course of construction coverage for a project to request, from the owner, municipal certification that the structure to be built complies with existing and new building standards. Newsom vetoed this bill, cautioning that a “one size fits all” approach to wildfire management may not be appropriate, given that each individual community’s needs differ.

California AB 2380 focuses on the development of standards and regulations for a relatively new and growing phenomenon: the rising use of private firefighting personnel, particularly by wealthy homeowners. Several prominent and well-known carriers offer homeowners-insurance policies that provide for private firefighting personnel, as well as preventative services (wildfire hazard inspections and clearing defensible space), and expected post-incident services (clean up and removal of fire retardant and similar substances).

AB 2380 was signed into law by Newsom at the tail end of the 2018 wildfire season, and it now requires Cal Fire, the governor’s Office of Emergency Services, and the board of directors of the FIRESCOPE Program (designed to coordinate firefighting resources among different agencies) to develop standards and regulations for privately contracted fire fighters.

Housing Shortage and New Construction

These legislative efforts are underscored by the worsening housing crisis, which has both strained existing supply and increasingly pushed new construction into areas known as the Wildland Urban Interface (WUI).

WUI areas are designated as either “interface” or “intermix:” Interface WUI areas have little to no wildland vegetation, but are near large wildlands. By contrast, in intermix WUI areas, structures are mixed with wildland vegetation.

A recent study by the U.S. Forest Service found that, as expected, WUI areas are the hardest hit by wildfires. However, the study also found that, contrary to popular belief, wildfires cause greater damage in interface WUI areas than intermix WUI areas- in other words, wildfire damage is greatest where there is little to no wildland vegetation. The study concludes that wildfires in WUI areas are fueled more by human-made fuels as opposed to natural vegetation. These human-made fuels include building materials and landscaping.

It may not come as a surprise that a growing body of scientific literature has ascribed more severe and frequent wildfires to climate change. However, what may be less appreciated is the profound impact of building in the WUI. By 2050, an estimated one million new homes are projected to be built in California WUI areas.

In light of this, as well as the recognition that wildfire risk is determined, in large part, by construction standards and the fire resistivity of materials as opposed to natural vegetation, California has developed a special building code for WUI areas: Chapter 7A of the California Building Code- Materials and Construction Methods for Exterior Wildfire Exposure. California is one of the few states to have a unique building code for WUI areas, and, in light of the recent wildfires, California officials are developing stricter WUI building standards.

The constituents of State Sen. Bill Dodd in Napa County and surrounding areas have faced some of the state’s most devastating wildfires. Dodd is at the forefront of significant fire-related legislation, and was responsible for the passage of the Insurance Adjuster Act of 2019, which sets regulations for insurance-claim adjusting in emergencies.

Dodd also spearheaded the passage of SB 190, which was enacted in late 2019. The law requires, among other things, the state fire marshal to develop suitable materials and products for building in WUI areas with respect to exterior wall siding and sheathing, exterior windows, doors and skylights, vents, decking, treated lumber and ignition-resistant materials, and roofing materials. The state fire marshal’s office found that roofing material is among the most important factors in a structure’s fire resistivity, and slate, metal, and tile roofs have the highest fire resistance rating of “A:”

As of July 1, 2021, wood-shake roofs will no longer be allowed by the California Fire Code. The state fire marshal also cites non-combustible siding as an important building element.

Wildfire-Resistant Construction

A recent study prepared by Headwaters Economics and commissioned by the U.S. Forest Service, WR Foundation, and Insurance Institute for Business & Home Safety analyzed cost differentials between traditional construction and wildfire-resistive construction as they relate to the four most fire-critical assemblies of a structure: roofs, exterior walls (including windows and doors), decks, and landscaping. Wildfire-resistant roofing, vents, fascia, and gutters were estimated to cost about 27 percent more than traditional components. However, the wildfire-resistant roofing materials feature lower maintenance requirements and longer lifespans.

Wildfire-resistant exterior walls were estimated to cost 25 percent less than traditional components, due in large part to the substitution of true wood siding with fiber cement siding.

Wildfire-resistant decking involves the use of composite boards, foil-faced bitumen tape on support joists, and the creation of non-combustible space beneath decking. This type of construction was estimated to cost approximately 19 percent more than traditional decking construction. Wildfire-resistant landscaping has the most significant cost difference as compared to traditional landscaping construction, with the former costing about double the latter. Landscaping fabric can minimize the growth of weeds and thus reduce fire hazard, as does the use of rocks instead of mulch.

While certain components of fire-resistant construction may have increased costs, the benefits far outweigh these increases: longer life cycles and less maintenance of the components, and, most importantly, greatly increased fire resistivity of the structure itself and thus its life cycle.

As construction in WUI areas is expected to grow substantially in the coming years, so too are fire-resistive construction standards and material requirements. These standards and requirements are part and parcel of a more comprehensive and deliberate set of land use planning, vegetation management, and emergency-response regulations and policies that California will develop by necessity to meet the growing demand for housing in WUI areas, and also to rein in the staggering costs of wildfire suppression. Thus, construction in WUI areas, and, to a lesser degree, in non WUI areas, will be subject to more exacting standards in the years to come.

As the science of wildfire prevention and suppression advances, so too will the technological innovations that will allow for safer, longer-lasting and ecologically sensitive construction. As in many other fields, California is expected to emerge as a leader in wildfire resistant building and material requirements, and will undoubtedly play a key role in shaping fire policy throughout the United States.