PaintSquare.com
      | 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 www.asaonline.com.

   

Tagged categories: Construction

Comment Join the Conversation:

Sign in to our community to add your comments.

Armorthane
Corrosion Coatings for Protection and Repair

Buy POLYURETHANE or POLYUREA coatings and spray surfaces for years of proven chemical resistance, water- and weather-proofing, and structural improvements.


CS Unitec
Surface Prep & Material Removal

CS Unitec’s Floor Planers remove coatings & corrosion from concrete & metal surfaces. Produce keyed profiles for waterproofing applications. info@csunitec.com


GMA Garnet USA
GMA Garnet™
Natural Abrasives

- Superior cleaning
  performance
- Even Profile
- Low Dust
- Cost-Effective
- Environmentally friendly
- Recyclable up to 5 times
Tel : +1 832 243 9300


Carboline Company
Hydrocarbon Fire & Jet Fire Protection

Pyroclad X1 is the latest breakthrough in epoxy based intumescent fireproofing technology


Modern Safety Techniques
Modern Safety Techniques

See our Low Temperature Catalyst for your CO removal needs. Help to provide your workers with safe, comfortable breathing air!


Safway Services
Suspended Access Made Easy With QuikDeck™

The smart choice for suspended access, QuikDeck’s interchangeable, lightweight components make them easy to set up and reassemble when you need to move.


Commercial Sandblasting & 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.


HoldTight Solutions Inc.
NO FLASH RUST -
NO CONTAMINANTS

Our HoldTight®102 salt remover & flash rush inhibitor prevents flash rust by removing surface contaminants.
Contact us for your nearest distributor. (800) 319.8802 sales@holdtight.com


Bullard

The Next Generation
of Blasting

• Lightest
• Coolest
• Most Comfortable
• Most Dependable

 
 
 
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 PaintSquare.com   |   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 webmaster@paintsquare.com