Archive for the ‘Miller Act Claims’ Category

Your Mechanics Lien Resource Treasure Trove

Mechanics Liens used to be a cornerstone topic on this blog; meaning I would write an article about filings, foreclosing and/or litigating a mechanics lien quite frequently. In fact, over the years I sort of consider myself a “lien guy.”  Insofar as construction law goes, mechanic lien and state or federal bond claims has sort of become my thing.

So, where has all of the mechanic lien posts gone?!

If you’re a reader of this blog but not my other blog – The Construction Lien Blog – you may be wondering.  But as you can gather from the blog’s title, a few years ago I created a separate blog focused on lien issues across the country, and post very regularly there on the topic.

As I exhaust the subject on that blog, and don’t to duplicate postings from there over here, most of my mechanic lien and bond claim talk is done on the Construction Lien Blog.  So, if you’re interest in lien laws (and if you are a construction participant or construction law person, lien laws are super important), I recommend you take a look at this other blog.

To give you a more direct path to relevant information, here are the articles posted on the construction lien laws in the states where Wolfe Law Group practices.

Also, be sure to check out these other resources providing through the lien and notice preparation and management company I founded in 2007, Zlien:

Posted in:     Around The Web, From The Experts, Mechanics Lien, Miller Act Claims, State Bond Claims  /  Tags: , , , , , , ,   /   2 Comments

New Orleans Declares Felons Not Responsible Bidders on Public Projects and Washington Contemplating Similar Rule

Mike Purdy’s Public Contracting Blog is so awesome, he got to this unique story that touts a legal link between Seattle, WA and New Orleans, LA before I could.    Before getting to the article, let me comment that if your company does public contracting work anywhere in the nation, Mike Purdy’s blog is going to consistently feed you very relevant information on the topic.   I highly recommend you check it out, and subscribe to his feed.

With that said, what article am I talking about?

Well, if you’re from the New Orleans area you likely remember the spat between former Mayor Ray Nagin and the city council about whether convicted felons are considered “responsible bidders” on city contracts.    After the fight, the vote, the veto, and the veto override, an ordinance (Ordinance Calendar No. 27,892) was adopted designed to stop the city from awarding contracts or grants to folks convicted of felonies in the previous 5 years.

Defining “Responsible Bidder”

What is a “responsible bidder?”   Nearly every state and city’s public bid laws use the term, allowing government entities to award contracts only to “responsible bidders.”    This interesting question of just what makes a bidder “responsible” was squarely in dispute between the New Orleans mayor and city council.

In the mayor’s veto message, he wrote that “under Louisiana law, responsibility [refers to] likely contractor performance, not the conviction history of a contractor’s principals, members and/or officers.”

Council-member Stacey Head lead the fight against the mayor for the council, arguing that responsibility does refer to the qualifications of the bidder him/her/itself, and not simply whether the contractor is likely to perform.    In her veto-override press release, she quotes the Louisiana Attorney General and Louisiana Supreme Court on the subject.

The AG states that “responsibility refers to the character or quality of the bidder – whether it is an entity with which you are safe doing business.”   Understanding Public Bid Law, Michael J. Vallan, Assistant Attorney General, February 20, 2008.

The Supreme Court allows an municipality to look at “financial ability, skill, integrity, business judgment, experience, reputation…and other similar factors bearing on the bidder’s ability to successfully perform the contract.”  Louisiana Associated General Contractors v. Calcasieu Parish School Board, 586 So.2d 1354 (La 1991).

Ordinance Cal. No. 27-892

So, what does this ordinance say?   Simplly, it prohibits the city from contracting with certain felons.   Here is the precise language:

[Prohibits City from contracting with] any person, corporation, or entity, whose principal(s), member(s), and/or officer(s) have within the preceding five years been convicted of, or pled guilty to, a felony under state or federal statutes for embezzlement, theft of public funds, bribery, falsification or destruction of public records.

The ordinance does not cast a terribly wide net, and so it’s surprising that this caused any controversy at all.    The City is not restricted from contracting with any felons, only those who committed a felony that has some sort of public-corruption element.

Responsible Bidder Criteria Important in Washington and Elsewhere

New Orleans is not the only place examining the criteria of a “responsible bidder” in public bid law.  As Mike Purdy points out in his post, bidder responsibility is a hot topic in Washington, where a task force was created by the Capital Projects Advisory Review Board (CPARB) to “address concerns by contractors of how public agencies are using responsibility criteria.”

tThe CPARB has released Guidelines on Bidder Responsibility (check them out, and the CPARB page here).   The criteria guidelines released by CPARB are much broader than the New Orleans ordinance, requiring consideration of things like delinquent state taxes, on-going lawsuits and the like.

One difference between the “Guidelines” and the “ordinance” is, of course, that the New Orleans ordinance actually prohibits a class of persons from being considered a responsible bidder, while the guidelines only offers suggestions as to what municipalities should consider when selecting a responsible bidder.    Will Washington take the next step and mandate the elimination of certain bidders?   Mike Purdy points out that they have the power:

Under RCW 39.04.350, a public agency in Washington State could establish Supplemental Bidder Responsibility Criteria similar to the New Orleans measure on not contracting with firms whose owners are convicted felons.   The Task Force on Bidder Responsibility will hold its second meeting on May 20, 2010.

Posted in:     Louisiana, Miller Act Claims, Regulations, State Bond Claims, Washington  /  Tags: , , , , , , , ,   /   Leave a comment

The Difference Between Public and Private Projects

When it comes to filing mechanics liens and collecting money owed to your company, there is a world of difference between private and public construction projects. And it’s very important to know the difference between the two.

Why Does It Matter?

Before explaining what distinguishes these projects from one another, let me talk a little about why it matters.

If unpaid on a private project, the laws in most states allow you to file a “mechanics lien” against the property. This gives your company an actual interest in the real estate your labor or materials improved. The lien must be filed within a particular period of time, and if the lien is not paid, you’re required to “foreclose” upon the lien to obtain payment, which could result in the property being sold at auction to obtain the funds to payoff your claim.

If unpaid on a public project, there is a much different experience.

Generally, your company is not able to file a “mechanics lien” against a public project because most states (and the federal government) prohibit any party from gaining an interest in public property. As a result, most public construction projects may only proceed if a “payment bond” is issued. In the event of non-payment on a public job, rather than file a lien the unpaid party will file a “claim” against the bond. Instead of foreclosing on the property, the claimant will “foreclose” – so to speak – against the lien, eventually resulting in payment.

What is the Difference Between Public and Private Projects?

Easy.

99 times out of a 100, a project is private when owned by a private person or entity, and is public when owned by the government.

When the government is the United States or a federal agency, the applicable rules are found within the “Miller Act.” We’ve written a good deal about Miller Act rules and claims here at the Construction Lien Blog. When the government is the state or a state agency, the applicable rules are usually found within a “Little Miller Act” statute. These vary state-by-state, a great resource on little miller acts across the country is linked below (and here).

Be very careful when performing work on a private school (i.e. private university) or for a non-profit agency, and even large public corporations. We sometimes think of these types of organizations as “public” agencies, but that does not necessarily render them a “public construction project.” Usually, such a designation is reserved for land and projects owned by the federal or state government. If you’re unsure, it’s a good idea to ask, or to hire an attorney to research the question.

GREAT Resources for Public Lien Laws and Public Contracting Issues

Here are two great resources for folks looking to learn a little more about public contracting in general, and about bond / lien claims against public projects.

1) Mike Purdy’s Public Contracting Blog: Mike Purdy is a retired public contracting consultant out of Seattle, WA. His frequently updated blog addresses public contracting questions and laws across the country.

2) Law Office of David Bransdorfer Miller Act Summaries: This website, offered by a New York law firm, provides summaries of the Miller Act, and each state’s version of the Miller Act. It’s a great place to start researching the applicable public contracting claim / lien laws in your state.

This article was originally posted on Express Lien’s topic-specific Construction Lien Blog.

Posted in:     Filing Requirements, Miller Act Claims, State Bond Claims  /  Tags: , , ,   /   4 Comments

Step-By-Step Guide to Filing Miller Act Claims at Avvo.com

In today’s economic climate, even contractors who typically work on private projects are testing the waters with federal and state construction works.  And unfortunately, these newcomers are finding themselves a bit lost in procedures when it comes time to get paid.

In the event a federal project (or GC on a federal project) goes sour, contractors and materials suppliers must turn to the Miller Act as a remedy.

We talk about Miller Act Claims on this blog here and there, but there are some other great resources out there on the topic.  Take a look at the Miller Act conversations on the Construction Lien Blog or the Federal Construction Contracting Blog for example.

In addition to these resources, I’ve just published a Legal Guide on Avvo.com titled “How to File A Mechanics Lien.”

It breaks down the process in four steps, easy on the eyes:

  1. Determine if you have the right to file a claim
  2. Send Miller Act Notice to the prime contractor within 90 days from last furnishing labor/materials
  3. Sent Notice to the surety (optional)
  4. File Suit Against the Bond within 1 year from last furnishing labor/materials

Take a look at it over on Avvo.com by clicking here.

Posted in:     Miller Act Claims  /  Tags: , ,   /   Leave a comment

Chart Explaining Miller Act Claim Rights and Deadlines

We spend so much time talking about Mechanic Liens we sometimes overlook the equivalent tool available to contractors and suppliers on federal projects – claims under the Miller Act.

The good news about the Miller Act’s requirements is that they are the same across the country.   As such, contractors on federal projects need only be familiar with one set of rules.   The bad news, however, is that the requirements are often misstated.

To make things easy, we created this chart.

This article was originally posted on Express Lien’s topic-specific Construction Lien Blog.

Posted in:     Miller Act Claims  /  Tags:   /   2 Comments