| Connect Follow us on Twitter Like us on Facebook
About | Subscribe | Advertise


Paint and Coatings Industry News

Main News Page

49 States Graded ‘F’ for Contractor Policies

Friday, January 16, 2009

Comment | More

Anti-contractor public policies gave 49 states and the District of Columbia failing grades in the American Subcontractors’ Association biennial report card. New Mexico was the only state to notch a passing grade—a B—in the rankings, which evaluates the public policy environment for construction specialty trade contractors and suppliers in 2007 and 2008.

ASA’s biennial report tracks and researched changes in:

  • Prompt payment protections
  • Treatment of pay-if-paid clauses
  • Mechanic’s lien protections
  • Payment bond protections
  • Retainage limitations
  • Anti-indemnity protections, including limits on “additional insured” endorsements
  • Anti-“bid shopping” measures.

ASA limited the scope of the evaluation to state laws and court decisions in these policy areas.

This annual report evaluates the public policy environment on the state level as it relates to construction subcontractors. ASA defines that environment as the combined result of laws and judicial decisions relating to assurance of prompt payment of subcontractors when they have properly performed their work, equitable risk allocation, the integrity of the bidding process, and other policies.

The “Background” section spells out the specific policies evaluated by ASA. New Mexico remains the only state receiving a passing grade in The ASA Report despite significant strides elsewhere. Four states (California, Kansas, New York, and South Carolina) are within five points of a passing score. The policy environment in the states with failing grades covers wide ground, with scores ranging from 59 percent (e.g., Kansas and New York) to 13 percent (Wyoming).

Above all, the 2008 report reflects a growing understanding of sophisticated risk transfer issues, with legislators and courts taking new steps to limit how contracts or insurance for construction/design services may allocate liabilities.

Kansas led the way with legislation that closed the “additional insured” loophole, giving that state a score of 100 percent for this issue. The “additional insured” loophole permits risk-shifting through insurance not otherwise allowed by contract.

New York’s courts effectively banned a party from insuring others against work-related injuries that it had no part in causing.

California took on contractual indemnity, giving subcontractors new legislation to challenge excessive shifting of the costs associated with residential construction defects.

Alaska took important first steps by establishing proportional liability for construction-related service providers.

Awareness of the harmful effects of retainage continues to grow. Maryland enacted a 5 percent limit on retainage, including retainage held from subcontractors, on private construction when payment and performance security is in place. Iowa now requires that interest be paid if retainage is not released within 30 days of substantial completion.

California legislators are “testing the waters” of reform in a significant way, banning retainage on CalTrans projects for five years and limiting retainage (including retainage held from subcontractors) to 5 percent on design-build projects in a large number of counties, cities and school districts.

There was isolated, but sometimes significant, progress on other issues:

  • The Nevada Supreme Court served up a major win for subcontractors when it declared pay-if-paid against public policy with very limited exceptions, bumping that state from 42nd to 25th place overall.
  • A new Arizona law made construction owners responsible for amounts over the penal sum after bonding off mechanic’s liens.

A number of policy changes did not result in score changes, but were significant in other ways, such as New York’s Wicks Law reform. Payment assurance, onerous subcontracts, risk transfer issues and bid shopping continue to be significant and problematic public policy issues for subcontractors and suppliers.

Research showed great variation among the states in the level of protection and support they offer to subcontractors and suppliers, and scoring was complex. For example, mechanic’s lien laws vary in how many tiers of construction can claim liens, the construction owner’s liability, whether lien rights can be contractually waived, and notice and filing requirements.

For more information, visit


Tagged categories: Construction

Comment Join the Conversation:

Sign in to our community to add your comments.

SSPC: The Society for Protective Coatings

Join SSPC and Enhance
Your Career !

CS Unitec
Work Cleaner and Safer

CS Unitec’s Vibro-Lo low-vibration scalers offer high performance for greater productivity & improved operator comfort. Optional dust shroud.

Best Floor Coatings with Maximum Durability

Coat CONCRETE or WOOD flooring for wheel and foot traffic, chemical resistance, weather-proofing, indoors and outside. Variety of textures for beauty, resilience and safety.

Commercial Sand Blasting & Painting Ltd.
Reliable Service & Superior Workmanship

We’re ready to meet any of your protective coating and lining needs. We can work on your site or in our facilities, with large shops (60,000 sq ft), 40 acres of yard space, and cranes and forklifts on site.

Abrasives Inc.
See the difference immediately Black Magic®

Quality blast abrasive goes farther. Use Black Magic® The Tough Stuff coal slag. Cleaner, consistent, less dust. Order yours today!
Abrasives Inc. 800-584-7524

AGC Chemicals
I-65 Arch Bridge Gets a Facelift with LUMIFLON®FEVE Coating

LUMIFLON based coatings can last up to 30 years without fading, offering a low-maintenance solution that retains color and gloss and can be field-applied.

Blastox/The TDJ Group, Inc.
Blastox - One Step
Lead Abatement

Don't waste $$ on added labor steps with other methods. Don't mix, meter or apply at the job-site. Avoid strict hazardous waste rules.
Let your painters paint!

Sidewinder/Persyst Enterprises, Inc.
The Sidewinder Model M2 Solvent Recycler

Combat the rising cost of gunwash, thinners, acetone & more while drastically reducing waste disposal coat.

Advanced Recycling Systems

Recycling Machines, Dust Collectors, Rapid Deployment units are time-tested and approved for the rugged industrial environment. Contact ARS today!

Graco Inc.
Graco M680 Mortar Pump

Compact and portable. Great for concrete resurfacing and repairs. Handles mortars, cementitious and filled materials.
Call 877-844-7226 or

Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us

© Copyright 2000-2015, Technology Publishing / PaintSquare, All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail