SB 529 Modifies the Missouri Public Prompt Payment Act and the law relating to public works projects
Sponsor: Wallingford
LR Number: 4629S.02T Fiscal Note available
Committee: Commerce, Consumer Protection, Energy and the Environment
Last Action: 6/20/2014 - Signed by Governor Journal Page: S1864-1865
Title: SCS SB 529 Calendar Position:
Effective Date: August 28, 2014
House Handler: Korman

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Current Bill Summary

SCS/SB 529 - This act modifies the Missouri Public Prompt Payment Act and the law relating to public works projects.

Under current law, all public works contracts made by a political subdivision for a public works project must provide for prompt payment to the contractor. This act provides that the contracts must also provide for prompt payment of any professional engineer, architect, landscape architect, or land surveyor.

Currently, a public owner may retain 5% of the value of a public works contract or up to 10% if it is determined by the public owner and the architect or engineer determine that a higher rate is required to ensure performance.

This act provides that a public owner may retain up to 10% if the contractor is not required to obtain a bond because the contract is not estimated to exceed $50,000.

Under current law, retainage may be adjusted prior to completion when work is proceeding satisfactorily and retainage is paid after substantial completion of the contract or per contract terms. In such cases, 200% of the value of the remaining work is withheld until completion. This act provides that 150% of the value is withheld until completion.

Under current law, the public owner must pay the retainage after substantial completion of the work, or as provided per contract, to the contractor for state highway road or bridge projects administered by the State Highways and Transportation Commission. This act requires the owner to pay at least 98% of the retainage to the contractor and for the contractor to pay subcontractors and suppliers after substantial completion or as provided per contract.

This act also provides that, if the owner determines the work is not substantially completed, the owner must provide a written explanation within 14 calendar days to the contractor. The contractor is then required to provide the notice to any subcontractor or suppliers responsible. If the explanation is not given by the public body, the public body must pay at least 98% of the retainage within 30 calendar days.

Currently, contractors must pay subcontractors and suppliers when they receive payment less any retention not to exceed 10%. This act lowers the retention to 5%.

Current law provides that when the public owner does not release full payment due because there are specific areas of work or materials the owner is rejecting, the subcontractors or suppliers involved are not paid for the rejected work. This act specifies that the subcontractors or suppliers are not paid provided the owner gives a written explanation as to why the work or supplies were rejected.

This act requires the public owner to include any withheld retainage with final payment of moneys owed to the contractor within 30 days of the due date. In addition, this act requires the public owner to pay any professional engineer, architect, landscape architect, or land surveyor the amount due within 30 days after receiving an invoice. If full payment is not made, the contracting agency must pay 1.5% interest per month it remains unpaid.

Currently, contractors on public works projects are obligated to require contractors to furnish a bond when the estimated cost of the project exceeds $25,000. This act changes that amount to $50,000.

This act is similar to SB 383 (2013), SB 862 (2012), HB 641 (2013), SB 383 (2013), and SCS/HCS/HB 161 (2013).