Cornerstone - Spring 2015 - (Page 14)

Derivative Sovereign Immunity for Contractors on Government Projects An idea whose time has come for Texas? BY JOHN L. GRAYSON, COKINOS, BOSIEN & YOUNG, P.C. On June 14, 2013 Governor Perry signed this landmark legislation House Bill 586 - into law, which was filed and led through the House by State Rep. Paul Workman (a former general contractor and active Austin AGC member) and carried in the Senate by State Sen. Bob Deuell. AGC-Texas Building Branch took the lead to help pass the legislation and received substantial support from ABC of Texas, Texas Construction Association, Texas Society of Architects, Texas Surety Federation and the American Council of Engineering Companies of Texas. After decades of being immune from breach of contract lawsuits under the doctrine of "sovereign immunity," state agencies can now be held accountable in court when they breach contracts. 14 ACROSS THE GREAT STATE OF Texas, there are highways, bridges, sewer systems, water systems and schools, so-called "infrastructure projects," that are in dire need of repair or replacement. With our population projected to increase by 50 percent or more in the coming decade, demand for new "infrastructure" is staggering. Many governmental entities have responded with successful bond programs and other means to fund these projects and many are already under way. But, even assuming adequate funding, can contractors meet the demand or, more importantly, will they be willing to? While many excellent contractors thrive on infrastructure projects, it is no secret that many well-qualified contractors elect not to pursue such projects because of increased bidding complexities, procedural issues, statutory and regulatory restrictions and other "red tape" that create administrative headaches and cut into already thin margins. If the project is "shovel-ready" but not enough contractors are willing to do the work, the cost of the project goes up, the work is slowed, and quality suffers, which inevitably leads to higher taxes for us all. What is needed is more competition, among good, responsible contractors. Lower cost, more timely completion and better quality can be obtained if more contractors compete for the jobs. If we cannot cut the red tape and do away with statutory or regulatory headaches, what can be done to encourage more participation by competent contractors? One answer might be found by looking at what has been done to promote construction of commuter rail in Dallas through derivative sovereign immunity. I. Derivative Sovereign Immunity Derivative sovereign immunity is the theory that a private entity performing an essential function of a sovereign (government) entity may enjoy the sovereign's immunity from certain claims. The concept rests on the principle that an individual entity may perform work so closely related to that of the government, that the entity becomes, in effect, a government agent. Essentially, the private entity stands in the shoes of the governmental entity. Courts have historically been reluctant to grant immunity to private contractors working for the government, but some have recognized that the benefits of delegating government work to private contractors can often outweigh the costs of extending the immunity. Cornerstone

Table of Contents for the Digital Edition of Cornerstone - Spring 2015

From the Chairman of the Board, Bill Scott, III
From the President/CEO, Jerry Nevlud
From the President/CEO, Jerry Nevlud
From the 2013 & 2014 Chairman of the Board, Steve Mechler
From the 2013 & 2014 Chairman of the Board, Steve Mechler
Derivative Sovereign Immunity for Contractors on Government Projects
Derivative Sovereign Immunity for Contractors on Government Projects
Nurturing the Next Generation of AGC Houston Leaders
Nurturing the Next Generation of AGC Houston Leaders
Past Events
Past Events
Member News
Member News
Reclaiming The Workforce
Reclaiming The Workforce
Index of Advertisers/Advertiser.com
Index of Advertisers/Advertiser.com

Cornerstone - Spring 2015

https://www.nxtbook.com/naylor/HCAQ/HCAQ0118
https://www.nxtbook.com/naylor/HCAQ/HCAQ0417
https://www.nxtbook.com/naylor/HCAQ/HCAQ0317
https://www.nxtbook.com/naylor/HCAQ/HCAQ0217
https://www.nxtbook.com/naylor/HCAQ/HCAQ0117
https://www.nxtbook.com/naylor/HCAQ/HCAQ0416
https://www.nxtbook.com/naylor/HCAQ/HCAQ0316
https://www.nxtbook.com/naylor/HCAQ/HCAQ0216
https://www.nxtbook.com/naylor/HCAQ/HCAQ0116
https://www.nxtbook.com/naylor/HCAQ/HCAQ0415
https://www.nxtbook.com/naylor/HCAQ/HCAQ0315
https://www.nxtbook.com/naylor/HCAQ/HCAQ0215
https://www.nxtbook.com/naylor/HCAQ/HCAQ0115
https://www.nxtbookmedia.com