Public-Private Partnerships: When Will Reality Meet the Promise?
October 09, 2018 —
Richard Fechner, GHD - Engineering News-RecordThe promise of public-private partnerships (P3s) seems irresistible. The $4.5-trillion that the American Society of Civil Engineers says the U.S. must spend on at-risk infrastructure by 2025 is a backlog beyond the collective means of local, state and federal governments to fund and deliver.
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Richard Fechner, GHD, ENRENR may be contacted at
ENR.com@bnpmedia.com
Contractor Suffolk's Hospital Project Is on Critical List After Steward Health Care Bankruptcy
January 14, 2025 —
Richard Korman - Engineering News-RecordBefore it was hit by troubles that now threaten to kill it, a new hospital being built by Suffolk Construction in Norwood, Mass., was shaping up as a tale of recovery. The existing hospital on the site had been forced to shut most local operations since a devastating rainfall and flood in 2020.
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Richard Korman, ENR
When Customers Don’t Pay: What Can a Construction Business Do
June 06, 2022 —
Patrick Hogan – Handle.comLate payments are not unusual in construction. From general contractors to subs and material suppliers, every construction project participant has dealt with delayed payments as part of business. However, there’s the issue of clients who refuse to pay. Not late--just no payment. For businesses big and small, a client who refuses to pay can make a significant impact financially and operationally. Many construction transactions are made on trust, and when a client doesn’t pay, some contractors and suppliers may make poor decisions. Yet, to get out of a project going sideways--with payment in hand or lessons learned--you need to be smart and proceed with your business interest in mind.
Why is the customer not paying?
This is where it begins. You must first identify the reasons why a customer refuses to pay. Were they unsatisfied with the quality of work? Do they feel that what was delivered was not aligned with what’s contractually obligated? Do they feel like the work was rushed or the materials used inferior? Was the job finished later than agreed? All these are possibilities that need to be investigated.
If the customer has not volunteered any of this information, it’s best to personally visit the project or set a meeting with the customer to discuss issues in person. If the problems the customer has raised are valid, plan how to resolve them right away. Suppose, after the discussion, you’ve determined that the customer demands things beyond what’s contractually obligated, and you cannot resolve them without incurring unreasonable time and costs. In that case, you might have a delinquent customer in your hands.
Let the customer know your decision. If you’ve decided to proceed and fix the issues they’ve raised, send the invoice for the unpaid work immediately upon commencing the remedial work. Of course, there is no guarantee that addressing their concerns will result in swift payment, so exercise your best judgment. If you think you’ve exhausted all the cordial means to get them to pay as the contract requires, you might need to consider your legal options.
A legal option to recover payments: Filing a mechanics lien
State laws protect construction providers like contractors and material suppliers from non-payment through lien laws. Mechanics liens work by placing a hold on the property where the work or materials were provided as a security in case of non-payment. Mechanics liens can result in a sale of the property where the lien is attached, and the proceeds will be used to pay unpaid vendors.
When a client fails to pay after a good-faith pursuit to resolve the payment issue, filing a mechanics lien becomes the smartest next move. However, note that to file a mechanics lien, you must have fulfilled the requirements of lien laws specific to the state where the project is located. For many states, the main requirement is sending a preliminary or pre-lien notice to secure your right to file liens. It’s only good business practice to
file preliminary notices for every project you work on. It’s not an indication of distrust in the client’s ability to pay–and that is mentioned in the wording of many statutory statements included in preliminary notices. It’s just industry standard to file prelim notices.
Filing a mechanics lien includes a period where the client still has the opportunity to pay arrears before the lien is enforced. Suppose the client fails to pay in this period. You are now allowed to enforce the mechanics lien through a lawsuit. This is a complex process, but it presents itself as the last resort to recover payments. As long as all your documents are in check, you’ve filed the necessary notices in the time and manner required by law, and you’ve fulfilled your contractual obligations to the client, a ruling in your favor is the likely outcome.
Promoting timely payments
It’s in your best interest to promote timely payments from your customers. While construction contracts are primarily reliant on trust, there are many things you can do to encourage and facilitate timely payments from your clients. Here are some ideas:
- Use detailed contracts and progress billing
- Vet clients through background research, credit history, references, and public financial records
- Send regular on-time invoices
- Ensure your invoices are aligned with the formats used by your client’s payables department
- Provide multiple payment methods
- File the necessary preliminary notices throughout the project
In the case of construction payments, the adage prevention is better than cure applies. There are many reasons why payments get delayed or skipped, some malicious, some not. It’s in your best interest to ensure that you are doing everything from your end to promote timely payments and that you’re fully protected by rights granted to construction businesses by law.
About the Author:
Patrick Hogan is the CEO of
Handle.com, where they build software that helps contractors and material suppliers with lien management and payment compliance. The biggest names in construction use Handle on a daily basis to save time and money while improving efficiency.
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Effective Zoning Reform Isn’t as Simple as It Seems
July 03, 2022 —
Yonah Freemark & Lydia Lo - BloombergThe Biden Administration’s Housing Supply Action Plan, unveiled last week, aims to help close America’s shortfall of almost 4 million housing units and subdue the nation’s skyrocketing home prices. At the top of its list of action items is a promise to provide federal grants as a reward to communities that alter land-use policies to promote density, an approach the administration is already piloting.
But identifying the land-use policies that most effectively add housing is harder than it seems. Mounting evidence indicates that one-off reforms such as eliminating single-family-only zoning aren’t adequate. To make meaningful progress in building homes, municipalities have to do more.
The Biden plan doesn’t detail how it will determine which types of policies will make a community eligible for these federal grants. But to meet the administration’s housing goals, we recommend it require that local governments seeking grants both show that their zoning changes are actually producing additional housing units, and also that their reforms include the full array of land-use policies that affect housing affordability.
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Bloomberg
Consider Arbitration Provision in Homebuilder’s Warranty and Purchase-and-Sale Agreement
November 18, 2024 —
David Adelstein - Florida Construction Legal UpdatesWhen you enter into a contract with a homebuilder, particularly a tract homebuilder, please consider two things when it comes to dispute resolution: (1) your purchase-and-sale agreement likely contains an arbitration provision, and (2) your limited warranty agreement you get in connection with closing likely also reinforces the arbitration provision, especially with warranty claims governed by the limited warranty agreement. This dispute resolution is important because it means the homebuilder wants disputes resolved through the arbitration process and NOT through the litigation process (where the nature of disputes and allegations are public).
Look, there are pros and cons with arbitration, no different than litigation. Arbitrating a dispute is not necessarily a bad thing, and with certain disputes, ideal. There is no right to appeal in arbitration, but the dispute should resolve itself quicker than litigation, and you’ll have more control over the decision maker, i.e., the arbitrator.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Calling the Shots
May 03, 2021 —
Construction ExecutiveAs of 2019, women accounted for 10% of the total construction workforce. That’s 1.2 million women in the field, sculpting the built environment and calling the shots. A smaller percentage of the industry’s population does not mean less ability to achieve success. According to The National Association of Women in Construction, 44% of women in construction serve in a professional and management capacity.
As the pandemic lingers on, sourcing qualified candidates is becoming more difficult, and finding nuanced methods of retaining valuable employees remains at the forefront of modern business. One estimate cites a loss of 600,000 women from the overall U.S. workforce in September 2020.
However, data suggest that construction employment for women has remained steady, compared with struggling sectors such as retail and hospitality. Plus, salary disparities are becoming less prominent in the construction sector where, according to NAWIC, women earn 99.1% of what men make, and the female population has seen steady growth since 2012.
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Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Reminder About the Upcoming Mechanic’s Lien Form Change
August 26, 2019 —
Christopher G. Hill - Construction Law MusingsAs July 1, 2019 approaches with its inevitable changes to the Virginia Code, I wanted to remind you once again that the statutory form for a Virginia mechanic’s lien will change as of that date.
HB2409 passed both houses of the General Assembly and has been signed by the Governor. This bill reconciled the language found in Virginia Code Sec. 43-4 with the various forms for general contractor, subcontractor and sub-subcontractor/supplier forms found in later sections of the code. As you will see if you download the .pdf of the bill as signed, this involved some tweaks to 43-4 and some updates to the mechanic’s lien forms that are in the code. The recent Desai case from the Virginia Supreme Court made it clear that such action was necessary.
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The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Contractors Prepare for a Strong 2021 Despite Unpredictability
April 05, 2021 —
Kenny Ingram - Construction ExecutiveA recent IFS study found many construction and engineering companies are reimagining their business models to ensure a secure future, using the pandemic-induced lull in business to prepare themselves to get back to operations on a strong footing.
The research shows 70% of businesses have increased or maintained digital transformation spend, despite the COVID-19 pandemic. In the infrastructure, engineering and construction sectors the figure is more than 75%.
There are many challenges the industry will face in the new year following the unpredictability of 2020, but there are also many opportunities. Despite the uncertainties that lay ahead, here are the few trends predicted to impact the sector 2021 and beyond.
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Kenny Ingram, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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