Assembly Bill No. 393–Assemblyman Goldwater

 

March 17, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Revises provisions governing payments on public works. (BDR 28‑996)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to public works; providing that the contract price for a public work may be increased or decreased during the term of the contract as a result of change orders; prohibiting a public body from making a deduction from the contract price or withholding payment from contractors in excess of retainage in certain circumstances; revising the provisions prescribing the amount that may be withheld from the progress payments made to contractors on public works; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 338 of NRS is hereby amended by adding

1-2  thereto a new section to read as follows:

1-3  1.  The contract price for a public work may be increased or

1-4  decreased during the term of the contract as a result of change

1-5  orders approved by the public body and its officers or agents

1-6  awarding the contract.

1-7  2.  Except as otherwise provided in NRS 338.515 and 338.525,

1-8  a public body and its officers or agents awarding a contract for a

1-9  public work shall not:

1-10      (a) Make a deduction from the contract price; or

1-11      (b) Withhold payment from the contractor in excess of

1-12  retainage.

2-1  Sec. 2.  NRS 338.400 is hereby amended to read as follows:

2-2  338.400  As used in NRS 338.400 to 338.645, inclusive, and

2-3  section 1 of this act, unless the context otherwise requires, the

2-4  words and terms defined in NRS 338.405 to 338.450, inclusive,

2-5  have the meanings ascribed to them in those sections.

2-6  Sec. 3.  NRS 338.515 is hereby amended to read as follows:

2-7  338.515  1.  Except as otherwise provided in NRS 338.525, a

2-8  public body and its officers or agents awarding a contract for a

2-9  public work shall pay or cause to be paid to a contractor the progress

2-10  payments due under the contract within 30 days after the date the

2-11  public body receives the progress bill or within a shorter period if

2-12  the provisions of the contract so provide. [Not more than 90 percent

2-13  of the amount of any progress payment may be paid until 50 percent

2-14  of the work required by the contract has been performed. Thereafter

2-15  the public body may pay any of the remaining progress payments

2-16  without withholding additional retainage if, in the opinion of the

2-17  public body, satisfactory progress is being made in the work.] The

2-18  public body shall pay the entire amount of the progress payment

2-19  for the work as completed until 95 percent of the entire contract

2-20  price has been paid, or until the final $50,000 of the contract price

2-21  is due, whichever is less. Except as otherwise provided in

2-22  subsection 2, the remaining portion of the contract price must be

2-23  retained by the public body until the entire contract is completed

2-24  satisfactorily and accepted by the public body.

2-25      2.  If the work in progress is being performed on a satisfactory

2-26  basis, the public body may reduce the amount retained pursuant to

2-27  subsection 1 if the public body finds that sufficient reasons exist

2-28  for additional payment and has obtained written approval from

2-29  every surety furnishing bonds for the work. Any remaining money

2-30  must be retained by the public body until the entire contract is

2-31  completed satisfactorily and accepted by the public body.

2-32      3.  Except as otherwise provided in NRS 338.525, a public

2-33  body shall identify in the contract and pay or cause to be paid to a

2-34  contractor the actual cost of the supplies, materials and equipment

2-35  that:

2-36      (a) Are identified in the contract;

2-37      (b) Have been delivered and stored at a location, and in the time

2-38  and manner, specified in a contract by the contractor or a

2-39  subcontractor or supplier for use in the construction, repair or

2-40  reconstruction of the public work; and

2-41      (c) Are in short supply or were specially made for the public

2-42  work,

2-43  within 30 days after the public body receives a progress bill from

2-44  the contractor for those supplies, materials or equipment.

3-1  [3.] 4. A public body shall pay or cause to be paid to the

3-2  contractor at the end of each quarter interest for the quarter on any

3-3  amount withheld by the public body pursuant to NRS 338.400 to

3-4  338.645, inclusive, at a rate equal to the rate quoted by at least three

3-5  financial institutions as the highest rate paid on a certificate of

3-6  deposit whose duration is approximately 90 days on the first day of

3-7  the quarter. If the amount due to a contractor pursuant to this

3-8  subsection for any quarter is less than $500, the public body may

3-9  hold the interest until:

3-10      (a) The end of a subsequent quarter after which the amount of

3-11  interest due is $500 or more;

3-12      (b) The end of the fourth consecutive quarter for which no

3-13  interest has been paid to the contractor; or

3-14      (c) The amount withheld under the contract is due pursuant to

3-15  NRS 338.520,

3-16  whichever occurs first.

3-17      [4.] 5. If the Labor Commissioner has reason to believe that an

3-18  employee has a valid and enforceable claim for wages against a

3-19  contractor, he may require the public body to withhold from any

3-20  payment due the contractor under this section and pay the Labor

3-21  Commissioner instead, an amount equal to the amount claimed by

3-22  the employee. This amount must be paid to the employee if the

3-23  claim is resolved in his favor, otherwise it must be returned to the

3-24  public body for payment to the contractor.

3-25      Sec. 4.  NRS 338.530 is hereby amended to read as follows:

3-26      338.530  1.  If a public body receives:

3-27      (a) A progress bill or retainage bill, fails to give a contractor a

3-28  written notice of any withholding in the manner set forth in

3-29  subsection 2 of NRS 338.525, and does not pay the contractor

3-30  within 30 days after receiving the progress bill or retainage bill; or

3-31      (b) A contractor’s written notice of the correction of a condition

3-32  set forth pursuant to subsection 2 of NRS 338.525 as the reason for

3-33  the withholding, signed by an authorized agent of the contractor,

3-34  and fails to:

3-35          (1) Pay the amount of the progress payment or retainage

3-36  payment that was withheld from the contractor within 30 days after

3-37  the public body receives the next progress bill or retainage bill; or

3-38          (2) Object to the scope and manner of the correction, within

3-39  30 days after the public body receives the notice of correction, in a

3-40  written statement that sets forth the reason for the objection and is

3-41  signed by an authorized agent of the public body,

3-42  the public body shall pay to the contractor, in addition to the entire

3-43  amount of the progress bill or retainage bill or any unpaid portion

3-44  thereof, interest from the 30th day on the amount delayed, at a rate

4-1  equal to the amount provided for in subsection [3] 4 of NRS

4-2  338.515, until payment is made to the contractor.

4-3  2.  If the public body objects pursuant to subparagraph (2) of

4-4  paragraph (b) of subsection 1, it shall pay to the contractor an

4-5  amount equal to the value of the corrections to which the public

4-6  body does not object.

 

4-7  H