AWI e-briefs - 12/02/2010 (Plain Text Version)

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State Scene

Construction Performance and Payment Is a 'Two-Way Street,' ASA Report States

Operating in the harshest economic conditions for the construction industry in decades, subcontractors across the country focused in 2010 on securing reforms that support the critical lifeline of their businesses — cash flow.

According to The ASA Report: The Policy Environment in the States, subcontractors from Arizona to Massachusetts succeeded in convincing legislators to adopt reforms that ensure prompt and full payment for the work they perform, the American Subcontractors Association (ASA) reported.

The ASA Report: The Policy Environment in the States is available on the ASA Web site, www.asaonline.com. This annual report evaluates the public policy environment on the state level of government as it relates to construction contractors. The 14-page report is commonly referred to as the "ASA report card." The 2010 report demonstrates that subcontractors are succeeding in convincing legislators that payment and performance really are connected by a "two-way street."

ASA is contacting the media, legislators and others across the country to share the results of The ASA Report. ASA’s campaign warns subcontractors of weaknesses in their state laws, provides advocacy information to help change laws, and educates subcontractors about the need to remain vigilant when negotiating contracts in a harsh public policy environment.

ASA’s report scores and grades each state in seven policy areas and uses the results to calculate an overall score, grade and rank for each state. Taking into account both laws and judicial decisions, the report scores: (1) Prompt payment protections; (2) Treatment of pay-if-paid clauses; (3) Mechanic’s lien protections; (4) Payment bond protections; (5) Retainage limitations; (6) Anti-indemnity protections, including limits on "additional insured" endorsements; and (7) Anti-"bid shopping" measures.

Beginning in 2009, ASA added "extra credit" for states that have taken the initiative to regulate controlled insurance programs. These non-standard insurance programs can have hidden risks for subcontractors.  [Return to top]