By Bruce Jervis
If one is not at the top of the payment chain, things can be precarious. A prime contractor receives payment directly from the project owner. Subcontractors are dependent on the prime to pass those project funds through as compensation for the subs’ contributions to the project. Prime contractors are not always quick to do so.
Two recent cases illustrate the payment vulnerability of subcontractors. In the first case, the prime contractor filed for bankruptcy, leaving its subcontractor unpaid. The sub argued the debt was not dischargeable in bankruptcy because the prime contractor held the project funds in trust for its subcontractors and suppliers. The subcontractor lost that argument. While the prime contractor had contractual and statutory duties to pay its subs, the prime did not hold the project funds in trust. The prime could discharge the payment obligation in bankruptcy. ... Read more.
Featured in this Week’s Construction Claims Advisor:
- Waiver of Payment Bond Rights Ruled Unenforceable
- Contractor Funds for Sub Not Held in Trust – Debt Dischargeable
- Task Orders Were Not Separate Contracts
By Steve Rizer
New York has adopted a state law that will provide a tax incentive to builders and homeowners who construct energy-efficient green buildings. The measure (S. 1462D/Chapter 188) authorizes a local government or school district to provide a real property tax exemption for new construction or improvements made after the end of this year that meet Leadership in Energy and Environmental Design (LEED) certification standards for green buildings. In addition to New York’s recent action, ConstructionPro Week has profiled moves that 13 other state governments (plus the District of Columbia) recently have taken to address green buildings within their jurisdictions. ... Read more.
By Steve Rizer
More than three-quarters of professionals responding to FMI Corp.’s new Productivity Survey reported having seen some level of productivity enhancement as a result of their lean initiatives. Only 4 percent of respondents indicated that such initiatives led to a slight decline in productivity, while the remaining survey participants (19 percent) responded that productivity levels remained “about the same.” Results from FMI’s 2012 Productivity Survey are included in a new white paper from the Raleigh, N.C.-based company entitled “The Science of Efficiency and Productivity: Construction 2.0 in the New Normal,” which additionally examines building information modeling (BIM) and prefabrication/modularization. ... Read more.