Alaska Contractor’s Outlook with Government Shut Down

Government Shut Down Affects Contractors[email protected]/10111702255

How will the government shut down affect Alaska contractors?

Considering all the moving parts and implications of the government shutdown what should Alaska contractors focus on now.  In short, brace yourself, what is happening now is not a one-off situation; this is  ground-zero for the foreseeable future.

Sequestration happened in March.  During that time federal job losses averaged 9,000 per month, or 72,000 jobs lost. We anticipate that federal payroll decline will escalate.

We expect continued:

1. Reduction in new contracts;
2. Changes in administration contract administration on existing contracts;
3. Changes in procurement type;
4. Increase in Bid Protest activity; and
5. Increase in CDA Claims activity

Cost and need will drive new contracts. The government will likely focus on existing programs over long-term projects. On vehicle usage, conservatism should be anticipated as the rule; the Fed has lots of flexibility for greater restrictions – so dot the I’s and cross the T’s.  You can expect a frequent use legacy indefinite in quantity contracts  (IDIQ) and a desire to lock contractors in to  Firm Fixed Price contracts.

Alaska Contractors can expect the government to offload risk to the contractor community.  Alaska Contractors will need to  manage this increased risk.  Alaska Contractors should approach opportunities with a focus on discipline and rigorous risk evaluation. Fully-funded contracts and phases should be safe; forward phases and contract options are  at risk and should be re-negotiated as soon as possible.

The same applies to your IDIQ task-orders.  The funded task or delivery orders should be safe.   Those that are not are at risk. You should determine 1) whether your contract relates to a sequestration exempt program; 2) whether it is impacted by any new congressional budget, 3) whether it is fully or incrementally funded, 4) when the agency anticipates exercise of options or issuance of task orders, and 5) what changes are planned.

With scarce contract opportunities; we expect an impact on Bid Protests and CDA Claims. The GAO shutdown creates doubt that protests will trigger an automatic stay.   If the GAO protests fails to stop disputed contracts, you may reconsider rolling the dice in more expensive litigation at the U.S. Court of Federal Claims. However, if you decide to engage the GAO; the Agency has issued guidance to federal contractors about how bid protests and related filings will be handled during this period.

[contact-form to=’[email protected]’ subject=’ALOINC Web Prospect’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]

Surface Transportation Assistance Act — Whistleblower Claims

Eric J. Emerson, Donald E. Elder, and Abraham Sandoval published an excellent article on Surface Trasportation Act — Whistleblower claims.  The full article can be found on their web site Surface Trasportation Assistance Act — Whistleblower claims.  They report that these types of claims have risen 30% since 2006.  These matters are governed by OSHA and have provisions allowing for $250,000 in punitive damages.  The most common protected employee activity is a refusal to drive.  It is interesting that third-party logsitics firms, leasing agent and brokers also face potential exposure to STAA claims based on perceived control over employees.

A driver’s refusal to drive is protected under two different provisions. First, 49 U.S.C. sec. 31105(a)(1)(B)(i) provides protection to the driver when they refuse to operate the vehicle because it would violate a regulation, standard or order of the US related to commercial safety.  Second, 49 U.S.C. 31105(a)(1)(B)(ii) the driver may refuse to drive if they have a reasonable apprehension of serious injury “to the employee or the public because of the vehicle’s hazardous safety or security condition.”

The elements of the employee claim are:

  1. The employee engaged in activity or conduct the statute protects;
  2. The employer took unfavorabel action against the employee;
  3. The employee’s protected activity was a contributing factor in the adverse action.

Adverse action inludes: termination; blacklisting; demotion; overtime denial; promotion denial; benefit denial; not rehired; threats; reassignment to low promotion prospect positions; reduction in pay or hours.

Super short statute of limitations of only 180 days from the adverse action.

The employer defense to the adverse action is very high.  The employer must show by clear and convincing evidence they would have taken the adverse action despite the protected activity.

It’s a great article and they discuss a lot more cases.



Great Business Attorney Questions

  • Prospective Business Attorney Questions and Answers.

If you’ve never hired a business attorney before, you might not know where to start.  You might also not know exactly what you are looking for.  These questions will help you in your quest for finding a business attorney that can help you start, grow and sell your business.


Business Attorney
Will your business attorney help your register ring?
  • Are you an experienced Business Attorney?

    Ask direct questions about your prospective lawyer’s experience.  Accounting is the language of business — Have they ever taken an accounting course?  What was your undergraduate degree?  What practical experience do you have in business? If you know you want to incorporate your business, for example, ask if he or she has ever handled an incorporation.  Alaska Law Offices, Inc. is experienced in business. We have two Certified Public Accountants on staff, with more than fifty years experience in business.  We have experience, starting, running and growing businesses.  In addition to growing our own we have audited, managed and consulted in manufacturing, service, construction, real property, transportation and medical businesses.  We have assisted in entity selection, employment contracts, and a host of other business needs.


  • Are you a well-connected Business Attorney?

    Your business attorney will know a lot about business.  However, there will come times when you are going to need a specialist in something they don’t know.  You want your lawyer to know when you need a referral to a specialist.  They should keep you from needing to finding those specialists when you need them.  Alaska Law Offices, Inc. is a connected business law firm.  We have extensive contacts in Alaska and among lawyers across the nation in specialized practice areas.  When our clients needs call for it we consult with other counsel to streamline their work.  If a referral will be more efficient or expeditious we are happy to make the referral.


  • Do you have other Business Clients in my industry?

    A good business attorney will be familiar with your industry or interested in learning more about it.  This is a double edged sword.  The more they are entrenched in an industry, the more efficient they become for you.  Improvements to a business documents and models frequently are shared with all of their clients.  However, this may keep you from enjoying the market advantage or your own developments for as long.  Alaska Law Offices, Inc. has business clients in several Alaska industries.  We are always discuss potential conflicts of interest with prospective clients before starting a new engagement.  We also bring a wealth of information from our experience having managed and audited business in the: transportation; construction; manufacturing; real estate; medical practice; banking; finance; sales and marketing sectors.


  • Are you a good Business Attorney teacher?

    Business attorneys do their most valuable work when they teach you and your staff how to stay out of trouble.  They do this by providing you the law applicable to your business and assisting in creating documents or procedures to stay compliant.  A good business lawyer contributes to your business by staying up with the changes in your business.  Alaska Law Offices, Inc. has fourth generation teachers.  Our staff has taught courses in vocational schools, community colleges and the university level.  The classes have covered topics including: business communication; secured transactions; collection practices; entity selection; taxation; business modeling; business simulation; accounting; management; personnel; negotiation; real property finance; computer programming and systems management.   We really enjoy working with people and teaching them new skills.


  • Are you a salesman, a manager, or a worker?

    Every business needs all three types of people, law firms are no different.  The “salesman” looks for new clients; the “manager” makes sure the client’s work gets done; the “worker” gets your work done. You want an attorney with a good mix of manager and worker.  Ask to meet the worker  and be sure you are comfortable with them.  Alaska Law Offices, Inc. are a good mix of manager and worker.  We get the job done in an efficient cost effective way.


  • What are your billing options?

    Unlike personal injury lawyers, business lawyers don’t generally work on “contingency fee.” Most lawyers will charge a flat one-time fee for routine matters, such as forming a corporation or LLC.  Find out if the flat fee includes out of pocket expenses, like filing fees and courier charges.  Most business attorneys will require a retainer before starting work.  Typically Alaska Law Offices, Inc. will engage businesses on an annual retainer basis for the regular and routine business advice and reminders that businesses need.  For retainer clients we also offer flat fee services for additional services that are outside the regular annual schedule.  We also provide additional serves on an ad hoc time and hourly fee.


  • Limits on Flat Fees?

    Flat fees generally are not quoted when the  the matter involves litigation or negotiations with third parties.  “Even though it’s a transaction I’ve done dozens of times, if the other side’s lawyer turns out to be a blithering idiot who wants to fight over every comma and semicolon in the contracts, then I can’t control the amount of time I will be putting into the matter, and will end up losing money if I quote a flat fee.” In such situations, you will have to pay the lawyer’s hourly rate. You should always ask for a written estimate of the amount of time involved, and advance notice if circumstances occur that will cause the lawyer to exceed his or her estimate.


  • Is the Retainer Refundable?

    Ask whether the retainer will be used and not held indefinitely in escrow., and that the lawyer commits to return any unused portion of the retainer if the deal fails to close for any reason.  Alaska Law Offices, Inc. uses two types of retainers, the annual service retainer and the ad hoc service retainer.  The annual retainer is earned throughout the year as the services are performed.  The ad hoc service retainer in contrast is an estimate of fees and is refundable when the job is complete if any amount remains unearned.


  • Whether You Should Give Your Business Attorney an Interest in Your business.

    You should be suspicious of any lawyer who offers to take an ownership interest in your business in lieu of a fee.  Giving your attorney an interest in your business creates a potential conflict of interest.  When attorneys interests are conflicted they can no longer fully serve your interests.  You should keep the blue sky value of your business for yourself.


What Can a Business Attorney do for Me?

Business Attorney Documents
From Negotiable Instruments to the Sale of your Business — a Business Attorney can help

Most Lawyers Are Not Business Attorneys

Most lawyers address criminal and family matters. Someone who does “non-business” matters is probably not the best fit for your business. Business owners need an attorney with the skills in contracts, organizations, real estate, taxes, personnel and collections.

1. Business Attorneys focus on Contracts.

You will need a lawyer that speaks the language of business and can quickly understand your business.  They should regularly prepare standard form contracts for you to use with customers, clients and suppliers.  They should review contracts that other people will want you to sign. Continue reading “What Can a Business Attorney do for Me?”

Alaska Administrative Hearings

Alaskan Crude Corporation v. Alaska Oil and Gas Conservation Commission

Alaska Supreme Court S-14148

August 30, 2013

There was only one Alaska Supreme Court decision this week.  It involved an appeal from an administrative hearing decision back in 2006.  The short take on the opinion is:  You can’t avoid oil spill response regulations by calling your oil well a gas well.  If we just left things there, than most business people wouldn’t learn anything useful for their own business.  How many of us actually have an old oil well that we might want to consider changing to a gas well.  I’ve previously written on administrative hearings here.

Continue reading “Alaska Administrative Hearings”

IRA Beneficiary Designation Mistakes

August 17, 2013

IRA Beneficiary Designation Mistakes

Americans held over $18 Trillion in IRA and other retirement assets. Retirement assets are protected from judgment execution in most states and grow tax deferred or tax free.  Putting money in has been a very wise decision. You still need to address your beneficiary designation issues to keep from losing all that value. Continue reading “IRA Beneficiary Designation Mistakes”

Alaska Wrestles with Veil Piercing

In an Alaska Supreme Court opinion issued on Friday, August 17th, the court wrestled with corporate veil piercing issues and their interplay with bankruptcy law.  Only corporations are normally liable for their debts.  The officers, shareholders and directors aren’t liable for corporate debts.  This concept of limited corporate liability is referred to as a veil.  Veil piercing refers to a court’s decision to disregard the veil and hold people behind the veil liable.   In a split decision the court ruled that the jury award for damages against the officer, shareholder and directors would stand.

The Claim

An employee sued a  corporation and its president for back wages in superior court. The corporation filed for Chapter 11 bankruptcy the very next day. The bankruptcy court discharged the corporation’s debts.  The superior court dismissed the corporation, but  allowed the employee to proceed to trial  against the president on a veil-piercing theory. A jury found that the corporation was a mere instrumentality of the president, and that the president owed the former employee wages under a bonus agreement. Continue reading “Alaska Wrestles with Veil Piercing”

Alaska Online Workman Compensation Coverage Checker

Workers’ Compensation Requirements for Employer
Requirements for Employers

The Alaska Workers’ Compensation Act requires each employer having one or more employees in Alaska to get workers’ compensation insurance, unless the employer has been approved as a self insurer. Determining employee status is accomplished utilizing the relative-nature-of-the-work-test as set out in Alaska Regulation 8 AAC 45.890.

There are few exceptions to those who must be covered under a workers’ compensation policy. Generally speaking, those include: sole proprietors in a sole proprietorship; general partners in a partnership; executive officers in a nonprofit corporation, members in a member managed limited liability company, part-time baby-sitters, cleaning persons (non-commercial), harvest help and similar part-time/transient help, sports officials for amateur events, contract entertainers, commercial fishers, taxicab drivers whose compensation is by contractual arrangement, a participant in the Alaska temporary assistance program, and professional hockey team players and coaches if those persons are covered under a health care insurance plan. In addition, executive officers in a for-profit corporation may exempt themselves by filing an Executive Officer Waiver with the department.

Businesses get Insurance coverage from commercial insurance carriers. Employers should contact their insurance agent or broker to buy a workers’ compensation policy. Businesses unable to get coverage from an insurance company, may buy insurance through Alaska’s Assigned Risk Pool.  The National Council on Compensation Insurance (NCCI) administers Alaska Pools. Alaska does not have workers’ compensation group pools. Once an employer has coverage, they must give proof of workers’ comp insurance to the Division of Workers’ Compensation on form 07-6119 (usually submitted by the insurance company). There are huge civil and criminal penalties that apply to an employer who fails to keep up coverage and/or fail to pay compensation.

The the employer’s payroll, type of business risk (classification assignment), and the employer’s loss history determine the cost for coverage. If an employer believes that their premium is too high, or that their business is improperly classified, they can request arbitration from the NCCI, and the Alaska Review and Advisory Committee.

Alaska Online Workman Compensation Coverage Checker

So, who wants to know if a given employer has worker’s compensation coverage.  Employees want to know, because if they are hurt they would like insurance to pay for the hospital bills.  Property owners hiring contractors want to know because they are liable for injured workers if the contractor fails to insure his workers.  General contractors want to know because they hire subcontractors and need to know they are hiring insured workers.  Business owners want to know if their leased employees are actually covered by the employee leasing company.  Business owners also want to know that their competitors carry insurance — because they want to make sure the competition is paying their fair share of injured worker claims.  Alaska provides the following checker here:

Alaska Employer Workman Compensation Coverage Verification

This link takes you off site.  When clicking on the coverage verification link above, you will be leaving our site and going to an external web site not maintained by us or the Alaska Department of Labor.  This is the same site the Alaska Department of Labor would presently uses for verification.  The list does not include self insured businesses nor those employers for which coverage is provided on a statutory basis.  The site requires cookies and javascript to be enabled in order for it to function correctly.

If you are an employer and have been served with a Failure to Insure for Workers’ Compenstion Liablity, a discovery demand and give us a call at 907-375-9226.





Alaska Applies Single Occurrence Clause

Friday, August !7, 2013

USAA v. Neary, 

Supreme Court Nos. S-14580/14600

The Backdrop

In a single occurrence, a child fired a single shot from a revolver belonging to his parents, killing a friend and seriously wounding another. The victims parents sued the child, his parents, and their insurance company.

The insurance policy provided a $300,000 limit for “Each Occurrence” of “Personal Liability.” The trial court multiplied the limits by the number of insured and ruled that the policy afforded $900,000 of coverage.   The trial court explained that the child and his parents were each entitled to a separate per-occurrence policy limit.

Continue reading “Alaska Applies Single Occurrence Clause”

Alaska Paves Way for More Employment Discrimination Claims

Yesterday the Alaska Supreme Court issued opinion

Employment Discrimination Claims
Hall Sign

No. 6809 S-14762 Kennedy v. Municipality of Anchorage.  The case concerned employment discrimination claims.  The opinion’s focus was discovery issues, jury instructions, evidence and argument on Mental Anguish Damages.  Employment discrimination victims are entitled to compensation for mental anguish, among other things.

Employment Discrimination Claims — Recovering Mental Anguish Damages

Mental anguish on the other hand is fairly ephemeral.  Just how much is a bad day worth? How do you quantify embarrassment?  What evidence may an employer force the employee to give them to test whether the employee: is faking a bad day; having a bad day from some other reason; or, has a preexisting bad day condition.

Employment Discrimination Claims — Discovery Scope

The general rule on discovery is:  you get to seek not just admissible evidence; but, also those things that will lead to admissible evidence.  Many states simply adopted the rule that when a person makes a mental anguish claim, the defendant gets to look at their mental health medical records.  Many of the decisions underlying the original rule arise from tort claims and not employment.  The torts of intentional or negligent infliction of emotional distress also provide for compensation.  For the claimant to recover the claimant must suffer severe emotional distress.  As a bright line rule courts adopted severe distress required medical treatment.  Statutory discrimination claims were created in part to lower the evidentiary standard for damage recovery.

Alaska Rejects Automatic Disclosure in Employment Discrimination Claims

Alaska rejected the automatic disclosure rule and paved the way for “garden variety” emotional distress claims in employment discrimination claims.  In Alaska, Employees can now assert embarrassment and bad day claims without automatically exposing their mental health medical records to their employer, juries and the public.  The employee can choose to limit exposing their medical records by carefully limiting their claim and the testimony that they give.  These non severe “garden variety” claims will be compensated in Alaska employment discrimination claims.  Alternatively, the employee can claim severe mental damages and waive your privilege to keep your medical records confidential.

To discuss which may be a better choice for you give us a call at 907-375-9277.


Clayton Walker, JD

Alaska Law Offices, Inc.