Construction—USA—Q&A guide
Construction—USA—Q&A guide

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Construction—USA—Q&A guide
  • 1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?
  • 2. Must foreign designers and contractors be licensed locally to work and, if so, what are the consequences of working without a licence?
  • 3. Do local laws provide any advantage to domestic contractors in competition with foreign contractors?
  • 4. What legal protections exist to ensure fair and open competition to secure contracts with public entities, and to prevent bid rigging or other anticompetitive behaviour?
  • 5. If a contractor has illegally obtained the award of a contract, for example by bribery, will the contract be enforceable? Are bribe-givers and bribe-takers prosecuted and, if so, what are the penalties they face? Are facilitation payments allowable under local law?
  • 6. Under local law, must employees of the project team members report suspicion or knowledge of bribery of government employees and, if so, what are the penalties for failure to report?
  • 7. Is the making of political contributions part of doing business? If so, are there laws that restrict the ability of contractors or design professionals to work for public agencies because of their financial support for political candidates or parties?
  • 8. Is a construction manager or other construction professional acting as a public entity’s representative or agent on a project (and its employees) subject to the same anti-corruption and compliance as government employees?
  • 9. Are there any other important legal issues that may present obstacles to a foreign contractor attempting to do business in your jurisdiction?
  • More...

Construction—USA—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to construction rights in USA published as part of the Lexology Getting the Deal Through series by Law Business Research (published: August 2020).

Authors: Peckar & Abramson PC—Michael S Zicherman; Robert S Peckar

1. If a foreign designer or contractor wanted to set up an operation to pursue the local market, what are the key concerns they should consider before taking such a step?

Few legal concerns arise simply because a company establishing a US operation is foreign. Rather, the primary concerns facing foreign contractors are more of a practical nature, including the following:

  1. determining whether or not to operate as a union or merit shop (non-union) operation;

  2. obtaining sufficient bonding capacity with a qualified surety;

  3. finding qualified domestic executives and supervisors to ensure the cultural transition to US industry practices;

  4. locating qualified legal counsel and becoming conversant with important legal considerations that regularly challenge and affect contractors;

  5. establishing relationships with local trade subcontractors; and

  6. establishing, with the guidance of counsel, an appropriate programme to ensure compliance with US laws and regulations that apply to the contractor

Many foreign contractors have entered the US market successfully, employing different models to establish their operations. Two models have worked well for European contractors: purchasing a domestic operation and pursuing business through that operation, and establishing joint ventures with domestic companies. These

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