Infrastructure projects can be complex for a number of reasons; among them are the absence of a physical address of where the job will take place, funds from Public-private partnerships (P3) and overall higher chance for something to go awry.
Scope of Work
Roads and bridges are in built in open spaces with no exact road or street name to locate them. "It is very important to understand the scope of work to make sure all the information you're gathering is correct," said Chris Ring of NACM's Secured Transaction Services. Payment bonds are extremely important because they are a type of surety bond issued to contractors which guarantee that all entities involved with the project will be paid. "The vast majority of these infrastructure bills will be public construction projects, so how to verify and obtain a copy of the bond is needed."
Another point of focus is on who will be gathering information for the job sheet. Percentages in a poll from Construction Dive showed 77% of information is collected from sales, 8% said credit and 15% said it is a combined effort with all hands on deck.
Public-private partnerships (P3s) allow the public entity to be the owner, but there is a private investment on a lender to fund the project. P3s were mentioned 42 times in the infrastructure bill meaning most projects are likely to fall under that category.
However, there is a catch. Certain states have passed legislation that says if the job is public with private investment money, general contractors are still required to post the payment bond. In states that don't have P3 legislation, the general contractor is not required to post a payment bond and do due diligence to figure out if the bond was completed. Payment bonds are not required on Federal P3 projects.
If a job information sheet is filled out incorrectly when working for a subcontractor, many issues can arise. For example, if you do not know who the general contractor is, it makes it more difficult to obtain a copy of a payment bond. If customers say they can't pay you because they haven't been paid, there is no way to verify if that information is correct without knowing who is the general contractor.
"I always like to compare a job information sheet to a credit application," Ring added. "They're two distinct documents but the job information sheet acts a lot like a credit application because by gathering the information needed to complete a job information sheet, you're doing your due diligence to correctly identify the parties who will help you get paid." A job information sheet serves a similar function to a credit application in that if you can't verify the information for the job information sheet, you will be unable to verify who is ultimately responsible for payment.
To learn more about this topic, be sure to register for our upcoming webinar in February.
-Kendall Payton, NACM editorial associate
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