Initiative Targets California Publicly Funded Construction Projects

Publicly funded construction sites in California must comply with workers' compensation requirements and labor laws, according to a California Department of Industrial Relations (DIR) Labor Enforcement Task Force (LETF) announcement.This initiative targets the proliferation of California's "'underground economy' as it pertains to public constructio...
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Your Customer’s Payment Doesn’t Match the Invoice, Now What?

It's the time you've been waiting for; the end of the order-to-cash cycle. You receive your customer's payment. But wait … the amount does not match the statement. Sound familiar? Payment overages and shortages are more common than you might think, said Paulyne VanderSloot, CCE, CICP, credit manager with Mutual Materials Co. (Bellevue, WA)."When a ...
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Common Excuses for Nonpayment and What to Do About Them

Customers that don't pay on time often provide excuses when it comes time to follow up. "We never received an invoice" was the No. 1 answer (88%) for not paying on time, according to a recent eNews poll. The second most-common excuse (78%) was "We cannot pay until our customer pays us."Other excuses included:The invoice is incorrect. (45%)The mater...
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Bankruptcy Case Highlights Importance of Perfecting Your Lien on Time

Although it is important for suppliers and subcontractors to maintain positive working relationships with their customers, they also must do their due diligence when securing their lien rights and follow appropriate state statutes, as a recent California appellate case illustrates.The Facts of the CaseIn July 2018, Philmont Management Inc. filed a ...
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Understanding the Unique Nature of Public Construction Projects

Public construction is unique in that receivables are secured by payment bonds posted by the general contractor. Public construction projects are either owned by the federal government or state governments, and with the passage of the $1.2 trillion infrastructure bill that means more of these types of projects will become a reality.Suppliers and su...
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Use Lien Waivers Wisely

Waiving lien rights on a property during the course of a project might be common, but suppliers and subcontractors must pay close attention to the language in their lien waivers to remain protected against nonpayment—especially when waiving lien rights in connection with partial payments. Before signing a lien waiver after receiving a partial payme...
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New Orders, Production and Employment Grow as Supplier Deliveries Slow Further

The November Purchasing Managers Index (PMI®) registered 61.1%, up 0.3 percentage points from October. Economic activity in the manufacturing sector grew for 18-consecutive months, according to the November Manufacturing Institute for Supply Management® (ISM®) Report On Business®. The report is based on survey responses from U.S. supply executives ...
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New York Court Case Demonstrates the Importance of Responding to Notices

Mechanic's liens provide subcontractors and suppliers with the leverage they sometimes need to get paid by general contractors and property owners. However, their strength falls and rises with the details as one subcontractor recently discovered.In the case of Janus VII LLC v. Par Plumbing Co., Inc., the property owner, Janus VII LLC, served Par Pl...
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Using UCC Filings to Secure Your Transactions

Banks are the primary user of UCC Filings, and the financial institutions incorporate many of the credit principles such as the 5 Cs of credit—capacity, capital, character, conditions and collateral–used by trade creditors. However, when banks lend on commercial loans, collateral is often the most important, said Chris Ring, of NACM Secured Transac...
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Texas Attorney Prepares Credit Professionals for Statute Changes

With changes to the Texas mechanic's lien statute taking effect Jan. 1, Katy Baird, senior associate at Andrews Myers PC (Houston, TX), provides an in depth look at how subcontractors and suppliers should protect themselves.During a recent NACM STS webinar, Texas Lien Statute: Preparing for the Changes in 2022, Baird provided a summary of the chang...
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How to Make the Most of Your Insurance Coverage During Construction Projects

Insurance coverage on supplied materials and equipment can be an effective tool to protect yourself from potential loss during a construction project. During NACM's most recent construction think tank session, Jim Untiedt, partner and construction practice leader at Acrisure Construction, LLC, describes what types of insurance policies are out ther...
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The Latest in Today’s Supply Chain Horror Story

Persisting supply chain issues are turning into a real-life horror story for many businesses across the globe. While it is not entirely clear exactly how long the nightmare will last, experts are certain it will not end anytime soon. Earlier this week, the World Trade Organization (WTO) said during the FT Africa Summit that supply chain problems ar...
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Five Ways to Lose Your Lien Rights

One of the strongest ways to secure payment rights on a construction project is through a mechanic's lien. Contractors and subcontractors often "finance" construction projects with their work, which is paid for later. And like the banks that finance projects with money and secure their capital with mortgage liens, contractors, subcontractors and su...
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Ongoing Supply-Chain Issues to Constrain US Building Product Sales

Supply chain challenges in the U.S. building products and materials sector are taking longer than expected to normalize, limiting companies' ability to fully benefit from strong end-market demand and grow sales, says Fitch Ratings. The disruption is causing production delays, which have been exacerbated by ongoing port congestion, pressuring sales ...
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Aluminum Will Continue to Get More Expensive and Here’s Why

By now, creditors are well aware of the inflation and material shortages created by ongoing supply chain issues. However, as the prices and movement of some goods begin to normalize (like lumber), others are getting much worse.The price of aluminum has increased for 16 consecutive months, more than any other commodity—partly due to product scarcity...
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Contractors Find New Ways to Cope with Elevated Lumber Prices

U.S. commercial and residential builders breathed a sigh of relief last month when softwood lumber prices dropped more than 30% after reaching an all-time high in May. Although prices still remain elevated, they have come down to a more manageable level, experts told Construction Dive. These fluctuations in the price of lumber are related to the su...
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Rebuilding Process Slow Following Hurricane Ida

Louisiana and surrounding areas are continuing to deal with the fallout from Hurricane Ida, which ripped through the southeast section of the state in late August. Contractors in particular are facing challenges, amplified by preexisting supply chain issues and labor shortages, as they return to jobsites and begin the rebuilding process.U.S. indust...
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Washington Case Law Demonstrates the Importance of Understanding Lien Deadlines

Lien statutes have long been an effective leveraging tool for credit professionals looking to collect outstanding payments on a construction project. However, as a recent court case points out, warranty work does not extend the deadline to record a lien claim.A recent case, Brashear Electric, Inc. v. Norcal Properties, LLC, before the Washington Co...
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Why Construction Creditors Must Pay Close Attention to Change Orders

Construction projects do not always go according to plans and are often prone to delays or supply changes. When one of the parties to a contract requests changes to the agreement, a written change order is an effective tool to keep track of these changes; however, they must be carefully executed to ensure payment in a timely manner.A change order s...
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Iowa Court Addresses Notice of Commencement Issues in Residential Mechanic's Lien Case

In Borst Constr., Inc. v. Finance of Am. Commercial, Inc., 2021 WL 3661426 (Iowa Ct. App. 2021), the Iowa Court of Appeals addressed the following three issues under Iowa's mechanic's lien statute in a residential construction dispute: the applicable deadline for a subcontractor to post a notice of commencement; whether work performed by a subcontr...
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