Got a Public Contract?: Be Sure to Preserve Your Rights to Payment

Over the past two years, the construction industry has seen a boom in public works. This is due to lower construction costs, influx of federal stimulus funds and lower financing rates for local governments.

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

Express Lien 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!

Express Lien’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. Express Lien’s $35 flat fee notices can save you!

Using Express Lien’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.

California Freezes Funds for Public Projects

The San Diego Union-Tribune reports that with the state nearly broke, California has frozen nearly $4 billion worth of loans for public building projects.    The unprecedented move is expected to halt construction all over the state – and inevitably, leave contractors, subcontractors and suppliers bickering with one another about outstanding payments and work.

With an estimated more than 200,000 works affected by the funding freeze, it’s likely that even California laborers will find themselves with claims for unpaid wages.

If you and your company are working on a public project affected by this spending freeze, you will want to file a Stop Notice to preserve your rights to Get Paid for work performed.

A full list of affected projects is available here:  http://www.signonsandiego.com/news/state/images/081217pmib_impact.pdf

Filing Your Public Works Lien!

As a contractor, you will inevitably walk down both the private and public path to jobs. Most contractors will generally become involved in privately-funded projects, such as commercial malls, stores, and offices, and residential condominiums, apartments and homes. But there are a select few of you who will lock down that all important public bid job. Getting paid on those jobs has never been more easy!

Public bid jobs are referred to in many states as “public works.” Public works are a great way to find well-managed and supervised work. These jobs are bid out to the best contractor based upon a statewide public bid law. Once awarded, the general contractor is required to obtain bonding, practically ensuring that you, as a contractor on the job, will get paid.

Express Lien files privileges against Public Works for its clients! Some things that you need to know before considering filing a lien include: what is a public lien? who is responsible for my claim? and how do we file the lien? Of course, we are here to answer your questions:

What is a Public Lien?

Public “liens” are not liens at all. In fact, you as a contractor cannot “lien” public land. A public works project is generally determined by the owner of the land where the work is performed. If the land is owned by a government agency, entity, or section, you will have to file a Public Works statement.

The statement filed upon Public Works is not a “lien,” but instead a sworn statement of the amount due under the contract with your contracting partner. The sworn statement is filed against the project in the local records and sent to all interested parties.

Who is responsible for your claim?

In the majority of states, each of the contracting parties up the ladder to the initiating government-affiliate, is responsible for your claim. Typically, Express Lien will search to find the contracting government agency, the prime contractor and the bonding agent who acts as surety on the project.

As a contractor, the law will provide you with a legal remedy against the owner, surety and other contractors, if in fact you are not paid.

How do we do it?!?

By fax, internet or phone, we can get your public lien filing accomplished. Because your personal contract is unlikely to include the information necessary for the filing of a privilege, we ask that you attempt to collect all of the prime contractor’s contract and the bonding information, in order to save time.

Here is what you need to provide:

(1) Your company/personal contact information.

(2) A copy of your contract to perform the work (puchase order or work orders are fine)

(3) Name and Address of Owner/Government Agency

(4) Name and Address of any contractors above you – i.e. those who have subcontracted the work you performed downward, starting at the prime contractor.

(5) Relevant dates when your work began and ended.

(6) Copy of the Prime Contract and Bond.

(7) Copy of any Certificates of Substantial or Final Completion.

Remember that some states require that you Statement be filed within a short period afer substnatial completion. Please make sure that you get your claims filed immediately to prevent any delays in the research system. Some states work under a short time frame for considereing Sworn Statements. In most areas, the statement must be filed within 30-60 days from filing of a Ceritificate of Substantial or Final Completion.

What if I cannot obtain a copy of the Bond?

We are able to utilize online databases, public records, and couriers to pull documents at an additional fee. If we are unable to locate surety information, we will file the Statement against a default surety until the name is located.

Express Lien, LLC will obtain the relevant data, file your statement an send out notices to each of the intetested parties in the contract. You will never need to worry again about not getting paid! Public works collection projects are much more likely to be paid! So take a step and protect your business today.