Virginia Capitol Connections Winter 2022

Virginia Capitol Connections, Winter 2022 23 The Alliance for Construction Excellence which includes the major specialty trade associations in the Commonwealth is serious about getting its members out of the business of financing construction. The American Subcontractors of Metro Washington (ASAMW) initiated this movement at its annual retreat this year when the ASAMW Board set the following goal: “To improve payment to all subcontractors by getting Minority and Women Certified Business Enterprises paid by the 10th of the month following a proper invoice…Work is taking place on this initiative in the District of Columbia now and the intent is to pursue this in the Commonwealth of Virginia at the same time. Since the beginning subcontractors have been ignored in their right for payment for work completed and this is a major impediment to small minority and women businesses seeking to become successful. Privity of contract is the legal concept used by those who wish to keep things as they are, but wary subcontractors know that the construction owner has the most influence on construction payments and privity of contract is one way of passing the buck. Government agencies in the Commonwealth are planning billions of dollars of construction over the next few years and they hope to have small women and minority companies bid on the work. However, ASAMW contends these companies will not thrive unless the payment process is improved so that small construction Virginia Construction Subcontractors Want to Stop Financing Construction BY IKE CASEY subcontractors are not forced to finance the construction process. Subcontractors in construction expend considerable resources to bid and obtain a project. After award, they are then expected to order material, put labor and management on the job, begin work and then wait 45 to 90 days for payment. Change orders and retainage further complicate getting paid for work completed. ASAMW subcontractors have been fighting for prompt payment for almost sixty years, but feel the time has come to expose this inequity and do something about it. Many governments, including Virginia have enacted laws requiring the general contractor to pay all subcontractors within seven days after receiving payment from the owner. Most politicians point to that law as the answer to prompt payment to subcontractors, but ASAMW has discovered the hold-up is usually with the owner or lending institution. That is why ASAMW and its advocacy partner, the Alliance for Construction Excellence (ACE) will seek solutions with government agencies to enable minority and women business enterprises to get paid for work completed on the 10th of the month following invoice and to thrive. Ike Casey, Executive Director, ASA of Metro Washington.V