Oregon Construction Law : Oregon Construction Lawyer & Attorney : Davis Wright Tremaine Law Firm : Serving Portland, Salem, Eugene, Beaverton

As originally published in the Daily Journal of Commerce

Authored by: Marcus Eyth

Lots of people in the construction industry have been talking about public-private partnerships recently. But many folks aren’t really sure what a PPP is, don’t understand the players and their roles, and may not recognize the risks and potential benefits.

PPPs have been used in the U.S. for more than 225 years in various forms, and include wildly successful and famous projects such as the Erie Canal, the Holland Tunnel, Grand Central Terminal, the Brooklyn Bridge, the New York subway and the Boston subway.

Fundamentally, PPPs consist of a contractual relationship between a public agency and a private entity (usually referred to as a “concessionaire”) with a purpose of delivering a service or facility for the use of the general public. Stated differently, the agency and the private entity jointly supply money to build, operate and maintain a public project, with both sides sharing the risks and rewards of project delivery.

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A couple of weeks ago I blogged about the Oregon False Claims Act,  a bill that made its way through the house and the senate and was on its way to the governor's desk for signature.

The large number of inquiries I have received about the bill speaks volumes about the impact this law will have on contsruction contractors and how seriously folks in the industry need to take this piece of legislation.

Indeed, the governor signed the bill.  So Oregon now has a state version of the Federal False Claims Act.  

The law goes into effect January 1, 2010 and can be found at OR Laws Chapter 292.

So contractors (and subcontractors) that do public procurement work beware....

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Construction contractors working on Oregon procurement projects beware (including general contractors, subcontractors and suppliers).  Oregon is on the verge of passing the state equivalent of the federal False Claims Act (31 USC 3729).

The Oregon bill essentially mimics the federal act, penalizing contractors who "knowingly" present false claims to the government.  This includes construction contractors who "exaggerate" their percentage completion on payment applications.  What qualifies as "knowing" has been debated ad nauseam in federal government contracts case law where Oregon courts will look for guidance as needed.

Note that "no harm, no foul" does not apply because a contractor triggers the violation upon submission of a problematic payment application.  No payment need be received from the agency.

Penalties are not as severe as under federal law ... yet.  The bill addresses civil liability only.  That means company executives won't go to jail, but fines of $10,000 per violation (for example, for each pay app) can add up quickly.

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