As of Jan. 1, 2023, pay-if-paid clauses are unenforceable, regardless of whether a surety/payment bond claim is involved. This is only for subcontracts created on/after 1/1/23.
Also for subcontracts created on/after 1/1/23, the prime must specifically identify and notify the sub of withholding as underlined below.
Per Va Code 11-4.6(C), for any withholding, the prime “shall notify the subcontractor, in writing, of his intention to withhold all or a part of the subcontractor’s payment with the reason for nonpayment, specifically identifying the contractual noncompliance, the dollar amount being withheld, and the lower-tier subcontractor responsible for the contractual noncompliance.”
Per Va Code 2.2-4354(1), (SB 550) Requires construction contracts awarded by state or local government agencies “as well as certain private construction contracts in which there is at least one general contractor and one subcontractor” to include a payment clause that obligates the contractors to be liable for the entire amount owed to any subcontractor with which it contracts. The bill provides that “a contractor shall not be liable for amounts otherwise reducible due to the subcontractor’s noncompliance with the terms of the contract; however, the contractor must notify the subcontractor in writing of the contractor’s intent to withhold all or a part of the subcontractor’s payment with the reason for such nonpayment.”
The legislature has not yet, but is working, to reconcile the specificity required by one code section that the other section more broadly outlines.
E-mail Signature Not Enough to Certify a Claim
Construction project professionals routinely send e-mails with “signatures,” which typically include the sender’s typewritten name, title, contact information, and/or company logo. But, this sort of e-mail “signature” is not enough to certify a claim to the Government.
Government Contractors: Ask for a “Sum Certain” in Your Claim
If your Claim includes an item for damages with an amount “TBD,” you could lose the entire Claim.
Contractors: Be Aware When Contracting with Virginia Public Agencies
Without a valid contract, a Virginia public entity has no duty to to pay for any of your work.
Constructive Acceleration
Contractors know that time is money. So, the point is clear when expressly told to “Speed Up! Go Faster!”
But, what do you […]
Construction Contracts & Whodunit
Imagine reading a crime novel and just when you think you figured out whodunit, a plot twist suggests a different culprit. In construction contracting, finding the right answer can be a difficult task when
Trick or Treat in Government Contract Claims
Without a request for a contracting officer’s final decision, claimants may seek treats, but get tricked instead.
Owner Nonpayment is No Defense to Miller Act Claim
As if you needed confirmation that the Federal Miller Act is a powerful tool for unpaid subcontractors, this is it. Even when a Prime ordered and accepted the Sub’s work, but didn’t have to pay under the Subcontract, the Subcontractor still. . . .
Trust, but Verify
Rely at your own risk upon a Contracting Officer’s statements when statutes or contract provisions may conflict.
Payment for Verbal Changes When a Writing was “Required”
Even if your agreement can only be modified by a writing, you may still have a good argument to be paid for extra work.
