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
Codes and Standards | Apr 6, 2022
ABC and AFSP form partnership on mental health and suicide prevention in construction
Associated Builders and Contractors and the American Foundation for Suicide Prevention recently formed a partnership to address mental health and suicide prevention in the U.S. construction industry.
Codes and Standards | Apr 5, 2022
New York City chooses 20 firms for architectural design services on future public building projects
The New York City Department of Design and Construction (DDC) has contracted with 20 firms to provide architectural design services for the city’s future public buildings projects under the latest round of DDC’s Project Excellence Program.
Codes and Standards | Apr 4, 2022
Construction of industrial space continues robust growth
Construction and development of new industrial space in the U.S. remains robust, with all signs pointing to another big year in this market segment
Legislation | Apr 1, 2022
American Bird Conservancy doubles capacity to test bird-friendly glass
American Bird Conservancy (ABC), working with Washington College in Maryland, says it has doubled its capacity to test and rate glass and other materials for their ability to deter bird collisions.
Legislation | Mar 31, 2022
Bill in Washington State would fund seismic retrofits in schools
A bill recently passed by the Washington State Senate could unleash hundreds of millions of dollars for school seismic retrofits over several years.
Legislation | Mar 30, 2022
Wisconsin legislators expand the scope of interior design in the state
Legislators in Wisconsin passed a bill, quickly signed into law by the governor, that codifies holistic interior design legislation and significantly expands the scope of interior design in the state.
Legislation | Mar 28, 2022
LEED Platinum office tower faces millions in fines due to New York’s Local Law 97
One Bryant Park, also known as the Bank of America Tower, in Manhattan faces an estimated $2.4 million in annual fines when New York City’s York’s Local Law 97 goes into effect.
Codes and Standards | Mar 24, 2022
New York senate moves to speed up fossil fuel ban in new buildings
Lawmakers in the New York State Senate are backing a proposal to ban fossil fuels in new building construction three years sooner than a plan proposed by Gov. Kathy Hochul.
Codes and Standards | Mar 23, 2022
High office vacancies have cities rethinking downtown zoning
As record-high office vacancies persist in U.S. urban areas, cities are rethinking zoning policy.
Codes and Standards | Mar 22, 2022
Dept. of Energy awards $32 million for next-generation building retrofits
The U.S. Dept. of Energy has awarded a total of $32 million for more than 30 next-generation building retrofit projects that will dramatically improve affordable housing technologies, according to a DOE news release.
