Provides that public entities are liable for interest due for failure to pay progressive stage or final payments on public contracts under certain conditions. (8/1/18) (EN SEE FISC NOTE LF EX See Note)
The implementation of SB 94 is expected to enhance accountability among public entities regarding their financial obligations to contractors. By imposing penalties for failure to meet payment deadlines, the bill aims to ensure that contractors and subcontractors receive timely compensation for their work, thereby promoting fair business practices in public contract management. This change could potentially streamline operations in public contracting, reducing disputes over late payments and fostering a more trusting relationship between contractors and government agencies.
Senate Bill 94 addresses the liability of public entities in relation to payments due for public contracts. Specifically, the bill amends R.S. 38:2191(B) to require public entities to make progressive stage payments within 45 days upon receiving a certified request for payment. If such payments are not made without reasonable cause, the entity becomes liable for reasonable attorney fees and interest, calculated at a daily rate, capped at 15%. The same provisions apply to final payments after the formal acceptance of the work, contingent upon the receipt of a clear lien certificate by the public entity.
Overall, the sentiment surrounding SB 94 appears to be positive, particularly among contractors and entities engaged in public works. Advocates of the bill argue that it serves to protect the rights of contractors and ensures that they do not suffer financially due to bureaucratic delays in payment processing. However, some concerns have been raised about the implications of strict deadlines and penalties for public entities, as there may be situations where delays are unavoidable due to extenuating circumstances beyond their control.
Notwithstanding the advantages presented by SB 94, some members of the legislature have voiced concerns regarding the balance between accountability and flexibility for public entities. Opponents of the bill worry that while it aims to protect contractors, the rigid timelines and financial repercussions could hinder public entities, especially smaller ones, from managing their budgets effectively. The bill's provisions may also lead to increased legal disputes if contractors feel they are unfairly denied timely payments, thereby attracting scrutiny over its practical application in various public contracting situations.