Are You Working On A State Construction Project?

Over the years, I’ve heard state projects referred to as “county,” “public” or “government” projects. It’s all the same. Any project commissioned by a city, state, county, public board or body or other governmental entity is typically a state construction project.  This includes projects commissioned by public school boards, which is a popular type of public work.

This sounds simple, but it’s surprising how many folks are either confused or wrong about whether a project is a state or private work.

Here are some frequently made mistakes:

• Schools:  Schools at every level (elementary, high school, university) can be either state or private, and you may sometimes be unsure.  Go to the school’s website and read the about section.  If the school is operated by a school district or board of education, it’s likely a state project.
• Native Land: Doing construction work on native land can be tricky, because native land has sovereignty rights, and it’s neither federal nor state nor private property.  Many folks confuse native land projects for state projects, but they are not state projects.  Check out this blog post to learn more about your lien rights on native territory.
• Hospitals, Community Centers, and other Quasi-Public Places: Understand what a “quasi public” place is by taking a look at this definition on the Merriam-Webster website:  ‘essentially public (as in services rendered) although under private ownership or control.” Hospitals, community centers, and other similar establishments are usually privately owned properties, which makes it a private project and not a state project.
• Parks:  State parks are typically state projects because they are state owned.  This is the case even when the parks are managed by private managing companies – which is common.  So, while you may be hired by a private property management company, the project itself is state because it’s still state land and under state control.

A Mistake In Identifying The Project Type Can Be Costly

Properly identifying a construction project as either private, federal or state is a critical step to preseving and enforcing your lien or bond claim rights. A mistake in your understanding of a project’s nature can send you down the wrong path of protection, which can leave you with no protection at all.

Over the coming two weeks, we’ll be discussing how to file bond claims and how to protect your rights to file a bond claim. You’ll realize from reading these posts that bond claim laws are just as convoluted, and contain just as many nuances as mechanic lien claims against private projects.

If you’re sending the notices and making the claims under one set of laws when you should be working under a different set, you will have sent and filed all the wrong documents.  Unfortuantely, the law has little to no tolerance for this type of mistake, and that can leave you without lien rights at all.

While determining your project type may seem like a simple affair, there are layers of complexities here. Do some research into who is commissioning the project and who owns the property, and make sure you know the type of project you’re working.

The result has meant tons of public work for contractors, who benefit both from Davis-Bacon wages and bonded work, which virtually ensures payment!

Zlien has taken the time to ensure that its clients know the basics of filing and preserving lien rights on the public job. A recent article describes your rights under the Miller Act, a federal series of laws which govern contracts for construction over the amount of $100,000.00.

But, did you also know that each state has what is called a “Little Miller Act.” These collections of laws mirror the purpose and structure of the Miller Act, namely providing rules for payment, security and claims on the public project.

For instance, did you know that every state or locally managed construction contract issued in Louisiana for a total of no less than $100,000.00, requires a performance and payment bond and demands that you file a sworn statement of your unpaid claim within 45 days of completion? (See La. R.S. 38:2241, et seq.) We’ve have reported on this before.

How about the great state of Washington (our home), which requires that a contractor provide 60 day notice of its right to a lien against a public contract’s retainage? (RCW 60.28, et seq.) Failing to timely file could result in forfeiture to timely payment, and your right to proceed in an action against the contractor’s bond.

Its important that contractors understand that it takes more than simple contractual compliance to ensure payment. Having a qualified lien management company on hand makes it all that much easier to feel secured on the jobsite!

Zlien’s $395 flat fee services includes tracking down and obtaining copies of the prime contractor’s bond, noticing the surety and prime contractor, and filing with the appropriate state or federal agency, your claim. Remember that our services also include all mailing and delivery confirmation.

Also, remember that in many cases, suppliers, second-tier subcontractors, and equipment lessors, may be required to issue preliminary notices of the materials they sell or lease, or the work that they will perform on a public project. Zlien’s $35 flat fee notices can save you!

Using Zlien’s Lien Pilot, you could greatly benefit from tracking deadlines and lien obligations. Please be sure to check out Lien Pilot and keep up with ConstructionLienBlog.com, for more information on how to protect your business.