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Bill Requiring Prompt Payment of Undisputed Claims Passed by Legislature

The Legislature has passed and the Governor is expected to sign an AGC-supported bill requiring the prompt payment of undisputed claims on public construction projects.

HB 1195 is a bill that was requested by the Capital Projects Advisory Review Board (CPARB) after the matter was originally brought to CPARB for discussion by AGC members. AGC and CPARB member Vince Campanella of Lydig Construction was instrumental in the development of the bill as Chairman of the task force which negotiated the bills language. The bill was further supported at both CPARB and in the Legislature by the significant actions of Dan Absher President of Absher Construction Company and John Ahlers Partner with Ahlers & Cressman PLLC who each served on the same taskforce and took the extra step to testify in support of the bill during legislative committee hearings.

AGC Legislative Council Van Collins noted that the bill HB 1195 would not have passed but for the leadership and commitment of AGC members. He further stated that the bill reflects a practice that is already customary for the Department of General Administration because it saves money. Unfortunately though under current law owners can refuse to issue change orders arguing that the whole claim is in dispute even if 99 percent of it is actually undisputed Collins said. At a minimum contractors are put in the position of financing a public works project while awaiting payment. At worst contractors are leveraged and strong-armed to accept change orders that are less than which contractors are entitled.

Collins added that the legislation promotes fairness in contracting. It simply requires public owners to issue a change order for any claim by a contractor for undisputed additional work within 30 days of completion of that work he said. Any disputed portions are left to normal resolution processes. This keeps projects moving forward and helps prompt payment of subcontractors and material suppliers.

For more information contact Van Collins at 360-352-5000.

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