A recent ruling by the Pennsylvania Supreme Court puts limits on a state law meant to ensure that contractors and subcontractors receive prompt payment for their work.
The court ruled that the state’s Contractor and Subcontractor Payment Act (CASPA) does not apply to construction projects where the owner is a governmental entity. The case, Clipper Pipe & Service, Inc. v. Ohio Casualty Insurance Co., pertained to the construction of an addition and renovations to the Navy/Marine Corps Reserve Training Center in the Lehigh Valley.
The contractor, Contracting Systems, Inc., failed to pay a subcontractor, Clipper Pipe & Service for performance of mechanical and HVAC work, according to JD Supra Business Advisor. Clipper sued CSI and its surety, asserting claims for breach of contract and violation of CASPA. The claim likely would have allowed it to recover its attorneys’ fees and possibly a statutory penalty if the court had ruled in the subcontractor’s favor.
On public projects, contractors working in Pennsylvania must rely on the Prompt Pay Act (“PPA”), which governs the payment obligations and rights of contractors and subcontractors on public projects. That statute, however, differs from CASPA with different timing provisions for payment, a different rate of interest, and a different burden of proof associated with penalty and attorneys’ fees provisions. Notably, it is also more difficult for a party to recover attorneys’ fees and penalties under the PPA than under CASPA.
Related Stories
| Mar 1, 2012
California bill aims to cut costs for commercial building energy retrofits
A bill in the California Assembly would allow the state to pool together property owners’ energy-retrofit loans.
| Feb 23, 2012
Federal budget cuts put major building projects on hold
A plan to build the National Bio and Agro-Defense Facility in Kansas is among several major building projects in jeopardy after the Obama administration’s 2013 budget was unveiled. The budget would cut all construction spending for the facility.
| Feb 23, 2012
Federal agencies fixed on leasing LEED-certified space
The federal government is especially focused on renting LEED-certified spaces.
| Feb 23, 2012
Regulators investigating construction accident at World Trade Center
The New York Port Authority and the city’s fire and building departments are investigating an accident at the World Trade Center construction site in lower Manhattan after a crane dropped steel beams that fell about 40 stories onto the truck that delivered them.
| Feb 23, 2012
New Virginia statewide building code goes into effect March 1
After March 1, all building plans in Virginia must adhere to the 2009 code that was adopted a year ago.
| Feb 17, 2012
AGC advocates for federal procurement reform
Ensure that small business goals take into consideration actual small business capacity in relevant specialty markets.
| Feb 17, 2012
Codes not to blame for Anchorage roof collapses following heavy snows
Design or construction problems likely contributed to the collapses, according to city officials.
| Feb 17, 2012
OSHA training videos on proper respirator use available online
17 short videos to help workers learn about the proper use of respirators on the job.
| Feb 17, 2012
Union/employer collaboration on the rise aimed at exceeding OSHA safety standards
Unions have learned to help employers win contracts with bids made competitive through good safety practices.
| Feb 15, 2012
Code allowance offers retailers and commercial building owners increased energy savings and reduced construction costs
Specifying air curtains as energy-saving, cost-cutting alternatives to vestibules in 3,000-square-foot buildings and larger has been a recent trend among consulting engineers and architects.
