ASA Manual Helps Subcontractors Navigate ‘Retainage Laws in the 50 States’

ALEXANDRIA, VA. (April 1, 2013) — The American Subcontractors Association unveiled a legislative work kit containing model state legislation to address the lack of payment assurances for construction subcontractors on projects financed by public-private partnerships. As P3 projects have become more popular, state legislatures have enacted legislation giving states and localities increasing latitude to negotiate P3 agreements, including more “vertical” construction projects. Unfortunately for subcontractors, often neither the P3 agreements nor existing law provides adequate payment assurances to subcontractors.

“Deprived of the clear payment bond protections of the state’s ‘Little Miller Act,’ a subcontractor or supplier working on a P3 project is unlikely to have any payment protections, unless those protections are specified in the authorizing legislation relating to P3s or a provision in the solicitation and award documents relating to a specific P3 project,” the kit explains. “Lien laws available for payment protection on private construction will be foreclosed, given that the public work being furnished by the P3 is for current public use, if not ultimately public property.”

ASA’s P3 legislative work kit provides subcontractors with guidance and model provisions to extend the protections of the state’s “Little Miller Act” to construction contracts awarded by a P3. “This means forcefully advocating for such a provision when the state legislature is initially shaping its legislation creating authority for P3s generally or a P3 for a specific project,” the kit explains. “It also means seeking the opportunity to amend an existing law that lacks payment protections for subcontractors or suppliers or affords inadequate payment protections.”

The kit also includes a model provision subcontractors can seek to have included in bid documents on P3 projects to secure payment assurances when a statutory solution is not possible. The kit is available to ASA members in the Government Advocacy section under the “ASA Chapter Toolbox” on the ASA Web site.

Founded in 1966, ASA amplifies the voice of, and leads, trade contractors to improve the business environment for the construction industry and to serve as a steward for the community. ASA’s vision is to be the united voice dedicated to improving the business environment in the construction industry. The ideals and beliefs of ASA are ethical and equitable business practices, quality construction, a safe and healthy work environment, and integrity and membership diversity.