Volume 35, Number 8, August 2000
Legislative Success: Prompt Pay Law and Retainage Limitation Bills Pass
Subcontractors in several states made headlines recently as they were successful in getting lawmakers to pass important legislation affecting them. For example, the American Subcontractors Association (ASA) of Baltimore Inc. and the D.C. Metropolitan Subcontractors Association achieved legislative victory in Marylands 2000 General Assembly session.
A retainage limitation bill was passed by the Maryland House and approved by the Senate. If signed by the governor it will limit retainage on all state projects to no more than 5 percent. According to ASA, it would also require that retainage for subcontractors and subcontracts be capped at no more than the amount held by the state and entitle contractors on state projects to have all retainage placed in interest-bearing escrow accounts.
In addition, the Maryland House and Senate also approved another bill, which stated contingent payment clauses in subcontracts for public construction in Maryland will not prevent a claimants recovery against a payment bond even if the prime contractor has not been paid.
In Arizona, ten years of campaigning for prompt payment laws recently ended with Gov. Jane Dee Hull signing the Contractors Bill of Rights into legislation (S.B. 1549). According to ASA, the law was modeled after a Contractors Bill of Rights written by Richard Usher, ASA of Greater Phoenix (ASAGP) government relations committee chairman, of Usher & Hill Insurance & Surety in Phoenix.
S.B. 1549 is the most significant construction payment legislation since federal prompt payment for subcontractors, said Usher.
In Massachusetts, legislative leaders have bypassed a construction reform bill,
opposed by the Associated Subcontractors of Massachusetts. According to ASA, this move
represents a subcontractor victory, as the budget version of construction reform includes
none of the provisions of the original bill that subcontractors opposed. The budget bill,
which was passed by the House and is now in the Senate, includes provisions to improve
certification and bonding of
ASA of California (ASAC), is supporting A.B. 2298, a bill that would return shop classes and other hands-on training to Californias high school curriculum. The bill would require the states board of education, in consultation with the Industrial and Technological Education Advisory Board, to adopt a curriculum for industrial and technological education by January 1, 2001.
ASA Offers AGC Design-Build Forms Addendum
The American Subcontractors Association (ASA) of Alexandria, Va., has published the Addendum to Standard Form of Agreement between Design-Build and Subcontractor AGC 450/455 (1999).
The addendum was developed due to concerns regarding the family of design-build forms published by the Associated General Contractors of America (AGC), according to ASA, and can be attached to either the AGC Form 450 or Form 455.
The addendum can be downloaded from http://www.asaonline.com/asaAddendum.htm or a copy may be obtained by fax or mail by contacting ASAs government relations department at 703/684-3450, ext. 336.
Flour City Takes On First European Project
Flour City International of Johnson City, Tenn., announced it has been awarded a $1.8 million contract to provide a custom curtainwall project for the Heights, a residential structure in Stratford, a London borough.
In the terms of the contract, Flour City will be providing 34,000-square-feet of custom curtainwall, with engineering and design work already underway. The project should be completed by years end, according to Flour City president Edward M. Boyle.
This is the first project to be awarded to our European operations, which we established in London in 1999, said chief executive officer John W. Tang. We expect significant additional projects and a strong future in the European marketplace.
AFL-CIO Questions Temp Agencies Supplying Construction Labor
Temporary employment agencies across the country are finding a lucrative business providing non-union contractors with skilled construction workers. As reported in the April 24, 2000 issue of Engineering News Record (ENR), the building and construction trades department (BCTD) of the AFL-CIO believes there are more than 450 such temp agencies providing about 250,000 workers daily in almost every construction trade. The unions worry that these agencies provide an image of hassle-free daily labor. However, according to one agency owner, unions actually contributed to the need for such agencies because union workers on the out-of-work lists must find non-union jobs to tide them over until union jobs open up. The BCTD believes some temp agencies may be discriminating against union applicants, and also that non-union contractors may use temp agencies as a way to avoid hiring union members.
Subcontractors Bring in a Victory in New York
After a shopping mall project owner in the Bronx, N.Y., stopped paying the general contractor, the general contractor ceased payment to the three subcontractors. However, a 1995 case, won by the American Subcontractors Association (ASA), banned contingent payment clauses in New York as a violation of public policy.
The subcontractors fought back, filing for payment under the payment bond. The New York Supreme Court sided with the subcontractors in the case, referred to as Blandford Land Clearing Corp. et al v. National Union Fire Insurance Company of Pittsburgh, Pa., stating, Based upon an analysis of the various contracts as well as considerations of the public policy, this court concludes that the insurer is liable to the subcontractors in its payment bond.
The June issue of USGlass (see June issue, page 53, Illuminating Possibilities), incorrectly stated that the San Diego Convention Center, Phase II included skylights by Metcoe Skylights Specialties Inc. Phase II of the convention center will be done by Tower Glass Inc. The featured convention center photo, in the article and on the cover, illustrates Phase I, made with Metcoe skylights.
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