Georgia Transportation Builder - Fall/Winter 2011 - (Page 13)

Protect the Bottom Line contracts) and O.C.G.A. § 13-10-60 (for state contracts). Defending, preserving payment on a Georgia public project By Bob Chambers, Gregg Joy and Fritz Hain, Smith, Currie & Hancock, LLP R eceiving payment for work performed or materials provided is paramount to a healthy bottom line. Conversely, contractors that pay twice for labor and materials will not survive long. Georgia law protects contractors, subcontractors, suppliers and mechanics performing work or providing materials on public projects by requiring local public bodies and state agencies to obtain a payment bond for all construction contracts in excess of $100,000. But bond claimants and contractors must precisely follow the statutory requirements to preserve a payment bond claim or defend against paying twice. The protection provided by a payment bond cuts both ways. The statutory process is designed to protect contractors from surprise non-payment claims by parties with whom the contractor has no direct contract. Often, the contactor may be unaware that these entities or persons worked on the project. The law also provides downstream parties with an additional layer of protection if they are not paid on a public project, the likelihood of which increases during times of financial uncertainty. The Georgia payment bond laws are found at O.C.G.A. § 36-91-90 (for local government Notice of Commencement The most impor tant step that a contractor can take to limit and defend against payment bond claims is to timely file and post a Notice of Commencement on a public project, which is similar to the notice required under Georgia’s lien statutes. It must contain: 1. The name, address and telephone number of the contractor; 2. The name and location of the public works project being constructed or a general descr ipt ion of the improvements; 3. The name and address of the state, county, municipal corporation, or any public board or body thereof which is doing the public work; 4. The name and address of the payment bond surety; and 5. The name and address of the holder of any security deposit provided in lieu of a payment bond. The contractor should carefully provide all required information, including correct legal names, as failure to do so may invalidate the Notice of Commencement. The notice must be filed with the superior court clerk of the county in which the project is located within 15 days after the contractor physically commences work. To bolster its defenses, the owner or contractor should also post the Notice of Commencement in a conspicuous location on the jobsite within the 15-day filing period. Failure to file the Notice of Commencement eliminates a contractor’s first line of defense against a future bond claim. If notice is not filed, a bond claimant is no longer required to provide an “up front” Notice to Contractor to preserve its claim. A contractor also must provide a copy of the Notice of Commencement within 10 calendar days to any person that requests it in writing. If a copy is not provided, the person making the request may preserve its claim without providing a Notice to Contractor. Notice to Contractor In order to assert a payment bond claim, an unpaid supplier or subcontractor should start with the bond itself. If a copy of the bond cannot be obtained from the contractor, the claimant can request a copy from the public agency overseeing the project through an Open Records Act request. Once obtained, the FALL/WINTER 2011 GEORGIA TRANSPORTATION BUILDER | 13

Table of Contents for the Digital Edition of Georgia Transportation Builder - Fall/Winter 2011

President’s Message
Commissioner’s Message
Connecting the Banks
Done Fast, Done Right Matthews completes I-75 paving ahead of schedule
A Bridge to Somewhere
Protect The Bottom Line
Safety Stand Down Week
Index to Advertisers

Georgia Transportation Builder - Fall/Winter 2011