By Lynn Bartels, Rocky Mountain News

Contractors who have had to take out loans while waiting to get paid for a job are backing legislation aimed at changing the payment process.

The Construction Industry Recovery & Jobs Preservation Act would “enforce reasonable payment schedules for quality construction work that has been completed,” according to its backers.

“Without a new law, many smaller construction companies will simply not be able to make payroll or pay suppliers,” said Michael Gifford, executive director of the Associated General Contractors of Colorado.

Read the rest of the article here

Posted by the Denver Business Journal, Jan 22nd, 2009:

A bill being considered by Colorado legislators would enforce schedules for payment to contractors for completed construction projects.

Senate Bill 95 – sponsored by Sen. Able Tapia, D-Pueblo, and Rep. Jim Riesberg, D-Greeley – would establish prompt payment in 30-day billing cycles upon submission of invoices to property owners, but would allow an alternative billing cycle of up to 75 days.

If passed, the bill could save many small construction companies from going out of business, said Michael Gifford, executive director of the Associated General Contractors of Colorado.

“This bill is common-sense way, in today’s tough economy, to keep Colorado construction companies healthy and growing,” Gifford said in a press release.

The bill has been assigned to the Senate State, Veterans and Military Affairs Committee for consideration.

Bill would enforce prompt payment of contractors |  Denver Business Journal

New Bill Aims to Save Colorado Construction Jobs

Would Target Slow Payments That Are Hurting Companies, Threatening Jobs

(DENVER) – Preventing the loss of family-sustaining construction jobs and keeping Colorado’s construction industry competitive and growing is the aim of new legislation, backed by more than 1,000 Colorado companies employing tens of thousands of workers, that targets excessively slow payments that have plagued contractors statewide.

The Construction Industry Recovery & Jobs Preservation Act (Senate Bill 95), introduced by Sen. Abel Tapia and Rep. Jim Riesberg, would enforce reasonable payment schedules for quality construction work that has been completed.  Private and public-sector entities that take months, or years, to pay construction companies are causing contractors – especially smaller specialty contractors with only a few employees — to take out expensive loans to pay their own bills thus putting quality jobs at risk.

“Without a new law, many smaller construction companies will simply not be able to make payroll or pay suppliers,” said Michael Gifford, executive director of the Associated General Contractors of Colorado.  “This bill is common-sense way, in today’s tough economy, to keep Colorado construction companies healthy and growing.”

Gifford underscored that preventing further damage to the construction industry is critical given the major role that the industry plays in the state’s economy, employing more than 9 percent of the total private-sector workforce, which represents 5 percent of the state’s total GDP.  A recent study by Colorado State University showed that for every $1 billion in construction projects, nearly $2.5 billion is generated in the state’s economy.

The Construction Industry Recovery & Jobs Preservation Act would:

• Establish a consistent set of rules to ensure a reasonable payment timetable.
• Establish prompt payment in 30-day billing cycles upon submission of invoices
• Allow an alternative billing cycle of up to 75 days
• Authorize retainage of payment to ensure that work is properly completed, and set standards and time lines for the required release of retainage. Release of retainage is not a waiver of claims.
• Focus solely on commercial construction and would not affect residential projects.
  

The bill has earned the endorsement of Building Jobs4Colorado, a broad and diverse coalition of more than 1,000 companies working in the construction industry that employ tens of thousands of workers across the state.

“To retain quality jobs held by skilled workers, we need a law with teeth that will ensure that the damage caused by painfully slow payments will no longer be tolerated,” said David Davia, executive director of the Colorado Association of Mechanical and Plumbing Contractors.  “These companies and their workers play by the rules, and we expect those entities that hire us to pay their bills on time.  Anything less isn’t fair to tens of thousands of hard-working Coloradans.”