Cornerstone - Fall 2017 - 19

New Technologies
Present
New Liabilities
BY ANGELA A.L. CONNOR AND CURTIS W. MARTIN, PECKAR & ABRAMSON, PC
NEW FEDERAL STATUTES REQUIRE THAT
contractors keep governmental data secure.
These new contract clauses on data security
should have the full attention of contractors
doing federal work. But these clauses should
also concern contractors not performing
federal work. Rapidly evolving risks and
liabilities associated with malicious cyberattacks, data breaches and other dangers
are driving these federal clauses. The federal
clauses are a harbinger to changes contractors are starting to see in private contracts.
For more than 100 years, federal contracting clauses have influenced contracts in the private sector. Consider just
two examples: differing site conditions
and terminations for convenience. Both
of these provisions are routinely found in
all construction contracts and originated
from federal contracting. Now that the
federal government has begun to require
that its contractors maintain data security,
it is worth considering if that trend will also
continue into the private sector.
There is every reason to believe that
it will continue over to non-federal contracts. After all, data breaches are big news.
One of the most notorious was Target's
loss of data, which caused approximately
40  million customers' credit and debit
card accounts to be stolen. This breach
was traced to hackers entering Target's
system through a portal used by an HVAC
contractor. The HVAC contractor opened a
phishing email, which allowed the hacker
Fall 2017

to install malware to obtain the HVAC contractor's login credentials. The hackers stole
11GB of data, which resulted in Target paying over $100 million to reimburse funds
lost from the breach.
Tread Carefully
Hacking is not the only concern with
increased technology. With the rise of collaborative mechanisms on projects, the
potential for loss of data or its misuse can
also increase. General contractors and subcontractors can lose data or mistakenly
alter data while using building information modeling (BIM) and other collaborative modeling programs. Another liability
concern stems from contractors who build
projects with confidential plans. If the contractor provides those plans to the subcontractors, who, in turn, share them with
unauthorized persons, the general contractor will most likely be held liable.
Contract clauses on data security are
already showing up in private sector
contracts. The revised AIA Document
A201-2017 general conditions, which is
incorporated into multiple AIA contracts,
was released in the spring of 2017. The
A201 now contains a provision requiring
the owner and contractor to agree and
establish protocols for the use, transmission and exchange of digital data.
What does this mean for the construction industry? Contractors will need to take
precautionary measures to manage these

Connor

Martin

risks, which include becoming familiar
with their security system and the owner
requirements, and comply with the documentation. Contractors should train
employees on the collaborative programs
and compliance with the contract requirements. Contractors should also understand
whether the owner requires compliance by
subcontractors and suppliers. The increase
in the requirements placed on contractors will ultimately require contractors to
police their subcontractors. It may require
in-house or third-party vendors to monitor
and regulate the use of the data, which,
in turn, means increased costs. The new
federal statutes are hard evidence of what
is to come for private sector contracts. ■
Angela Connor is a Construction Lawyer
in Peckar & Abramson, PC's Houston office
and represents a wide range of construction
industry clients and focuses her practice on
construction-related disputes and contract
negotiations and drafting. She serves on
the Membership Committee and presented
this topic at the Solution Thru Technology
Conference September 8.
Curt Martin has been solving problems in the
construction industry for 38 years, drawing
on experience as a lawyer and senior industry executive. Curt is currently a Partner in
Peckar & Abramson, PC's Houston office and
is board certified in construction law by the
Texas Board of Legal Specialization.
19



Table of Contents for the Digital Edition of Cornerstone - Fall 2017

From the Chairman of the Board, James Bryant
From the President/CEO, Jerry Nevlud
Houston-Area Construction Companies Team Up to Promote National Safety Stand-Down
OSHA Launches Application to Electronically Submit Injury, Illness Data
Midyear Safety Meeting and Networking Breakfast Recognizes Excellence in Safety
The Revised AIA Prime Contract
New Technologies Present New Liabilities
AGC Houston Members Head to Pacific Northwest for State Convention
Menil Drawing Institute Gets Ready to Open Its Doors
Member News
Index of Advertisers/Advertiser.com
Cornerstone - Fall 2017 - Intro
Cornerstone - Fall 2017 - ebelly1
Cornerstone - Fall 2017 - ebelly2
Cornerstone - Fall 2017 - cover1
Cornerstone - Fall 2017 - cover2
Cornerstone - Fall 2017 - 3
Cornerstone - Fall 2017 - 4
Cornerstone - Fall 2017 - 5
Cornerstone - Fall 2017 - From the Chairman of the Board, James Bryant
Cornerstone - Fall 2017 - 7
Cornerstone - Fall 2017 - 8
Cornerstone - Fall 2017 - From the President/CEO, Jerry Nevlud
Cornerstone - Fall 2017 - Houston-Area Construction Companies Team Up to Promote National Safety Stand-Down
Cornerstone - Fall 2017 - 11
Cornerstone - Fall 2017 - 12
Cornerstone - Fall 2017 - OSHA Launches Application to Electronically Submit Injury, Illness Data
Cornerstone - Fall 2017 - Midyear Safety Meeting and Networking Breakfast Recognizes Excellence in Safety
Cornerstone - Fall 2017 - 15
Cornerstone - Fall 2017 - The Revised AIA Prime Contract
Cornerstone - Fall 2017 - 17
Cornerstone - Fall 2017 - 18
Cornerstone - Fall 2017 - New Technologies Present New Liabilities
Cornerstone - Fall 2017 - AGC Houston Members Head to Pacific Northwest for State Convention
Cornerstone - Fall 2017 - 21
Cornerstone - Fall 2017 - 22
Cornerstone - Fall 2017 - Menil Drawing Institute Gets Ready to Open Its Doors
Cornerstone - Fall 2017 - Member News
Cornerstone - Fall 2017 - 25
Cornerstone - Fall 2017 - Index of Advertisers/Advertiser.com
Cornerstone - Fall 2017 - cover3
Cornerstone - Fall 2017 - cover4
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