A new North Carolina law (Ch. SL 2013-401) authorizing the use of public-private partnerships and design-build on non-transportation public work in the state includes payment assurances for construction subcontractors and suppliers. The new law, which becomes effective on Sept. 22, 30 days after North Carolina Gov. Pat McCrory (R) signed the legislation (HB 857) on Aug. 23, 2013, requires payment bonds in the amount of 100 percent of the "total anticipated amount of the construction contracts to be entered into between the private developer and the contractors." North Carolina joins a growing list of states that have enacted laws to help assure that subcontractors and suppliers will be paid for work they perform and services they provide on construction components of projects financed through P3s. Depending on how a construction project funded by both public and private sources is structured, the project may be exempt from both payment bond requirements and mechanic's liens, leaving subcontractors and suppliers without payment assurances. In April, ASA unveiled a legislative work kit containing model state legislation to help ASA chapters address the lack of payment assurances for subcontractors working on P3 projects. The legislative work kit is available in the Government Advocacy section of the ASA Chapter Toolbox. ASA is also leading efforts before Congress to ensure that subcontractors and suppliers have the same payment rights on federal projects financed through P3s as they do on more traditional federal projects.
Source: ASA Today, the weekly news bulletin of the American Subcontractors Association