by: Mark A. Cobb
We are pleased that the President has signed H.R. 4348 which is called the “Moving Ahead for Progress in the 21st Century Act’’ or ‘‘MAP–21’’. This highly anticipated, $105 billion transportation legislation gives US DOT officials an opportunity to address inadequate payment assurances for subcontractors.
According to online sources, President Obama stated, “This bill will keep thousands of construction workers on the job rebuilding our nation’s infrastructure.” The new law creates an opportunity for DOT to address the lack of payment assurances for subcontractors on transportation projects financed by public-private partnerships. Under the law, the Secretary of Transportation will, within 18 months, “develop standard public-private partnership transaction model contracts for the most popular types of public-private partnerships [‘P3s’]” and “encourage States, public transportation agencies, and other public officials to use the model contracts as a base template when developing their own public-private partnership agreements for the development, financing, construction, and operation of transportation facilities.”
Currently, subcontractors working on projects financed by P3s lack traditional payment assurances such as Mechanics and Materialmen’s liens and payment bond rights; it is hoped that this new legislation will result in better protection for materialmen and subcontractors working on our highways and P3 projects.
This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.