On March 31, Gov. Ritter signed SB116 – Change Directives for Public Works Contracts. Pictured (above) at a 2pm signing ceremony are, Gov. Ritter, bill sponsors Sen. Mike Kopp (R), Rep. Joe Rice (D), and Rep. Kevin Priola (R), AGC/C Legislative Committee Chairman Bud Starker (Starker Construction); Craig Clark (Dynalectric Company of Colorado); Dale Heter (Mortenson Construction); AGC Executive Director Michael Gifford, and AGC Government Relations Director Dennis Jakubowski. Also pictured from the BuidldingJobs4Colorado Coalition are Helga Grunerud, Hispanic Contractors of Colorado; Jenn Penn, BJ4C Coalition lobbyist; Tom Keating, SMACNA; and Mark Latimer, ABCRMC Executive Director.

The Building Jobs4Colorado Coalition would like thank the bill sponsors – Sen. Kopp, Rep. Rice and Rep. Priola for their leadership in addressing this important issue for contractors.

Denver Business Journal – by Ed Sealover

Colorado Gov. Bill Ritter signed several business-related bills into law Wednesday.

Those bills include:

• Senate Bill 31, sponsored by Sen. Mark Scheffel, R-Castle Rock, which excludes tax-increment financing from being used for gambling-related facilities in tourism enterprise zones.

• Senate Bill 112, sponsored by Sen. Mike Kopp, R-Littleton, which lets businesses use deductible programs to help reduce workers’ compensation insurance rates and requires the state commissioner of insurance to publicize aggregate loss and payroll data used in workers’ compensation rate making.

If companies can save money through deductible programs, they can spend more creating jobs, Kopp said.

• Senate Bill 116, also sponsored by Kopp, which requires public entities to reimburse contractors on an ongoing basis if change orders are made to contracts rather than to wait until a change order agreement can be reached.

The bill is particularly important at a time when construction industry unemployment hovers around 27 percent, said Michael Gifford, executive director of the Associated General Contractors of Colorado.

You can view the article here.

FOR IMMEDIATE RELEASE (3/31/10)

Contact: Jenn Penn 720.937.2148

www.buildingjobs4colorado.com

Governor Bill Ritter to Sign SB10-116 Public Contracting Jobs Protection Act

(Denver) – Governor Bill Ritter Jr. is expected to sign SB10-116 – Public Contracting Jobs Protection Act – by Senator Mike Kopp and Representatives Joe Rice and Kevin Priola on Wednesday, March 31, 2010.

SB10-116 – Public Contracting Jobs Protection Act is a bipartisan legislative effort supported by a large coalition of construction organizations known as the Building Jobs4Colorado Coalition.

The Building Jobs4Colorado coalition, a broad coalition of construction industry owners, general contractors, sub-contractors and sub-sub contractors across Colorado that represents more than 1,500 companies and tens of thousands of Colorado citizens, has proudly supported SB10-116 throughout the legislative process.  The Building Jobs4Colorado Coalition commends Governor Bill Ritter for his leadership in signing SB116 into Colorado law in effort to save jobs in the construction industry.

“With national unemployment in the construction industry hovering around 27%”, said Michael Gifford, Executive Director of the Associated General Contractors of Colorado and member of the BJ4C Coalition, “the need for SB10-116 is more essential than ever before”.

“Because of stimulus dollars, public works projects are just about the only source for new jobs in the construction industry”, said Dave Davia, Executive Vice President / CEO of the Colorado Mechanical and Plumbing Contractors and member of the BJ4C Coalition.  “Current contracting practices by some local governments, for additional directed work, have the effect of delaying cash flow to construction firms during a project, making it difficult to keep workers employed.  SB10-116 will certainly assist the construction industry during these difficult financial times”.

SB10-116, the Public Contracting Jobs Protection Act requires public entities to reimburse contractors for their costs for additional directed work until a change order agreement can be reached.  Current practices require contractors to pay upfront labor and materials costs for any additional work until a change order agreement can be reached which sometimes takes many months.  SB10-116 will ensure contractors are paid on a timely basis for change directive work, creating a great stimulus for the Colorado economy and keeping Colorado workers employed.

FOR IMMEDIATE RELEASE (1/30/2010)

Contact: Jenn Penn – 720-937-2148

www.buildingjobs4colorado.com

Public Contracting Jobs Protection Act (SB10-116) Introduced in the Colorado Senate

(Denver) – Senator Mike Kopp and Representatives Joe Rice and Kevin Priola introduced SB10-116 – the Public Contracting Jobs Protection Act – on January 28, 2010.

The Building Jobs4Colorado coalition, a broad coalition of construction industry owners, general contractors, sub-contractors and sub-sub contractors across Colorado that represents more than 1,500 companies and tens of thousands of Colorado citizens, proudly supports SB10-116 and commends Senator Kopp and Representatives Rice and Priola for their leadership on the effort to save jobs in the construction industry.

“With national unemployment in the construction industry hovering around 23%”, said Michael Gifford, Executive Director of the Associated General Contractors of Colorado and member of the BJ4C Coalition, “the need for SB10-116 is more essential than ever before”.

“Because of stimulus dollars, public works projects are just about the only source for new jobs in the construction industry”, said Dave Davia, Executive Vice President / CEO of the Colorado Mechanical and Plumbing Contractors and member of the BJ4C Coalition.  “Current contracting practices by some local governments, for additional directed work, have the effect of delaying cash flow to construction firms during a project, making it difficult to keep workers employed.  SB10-116 will certainly assist the construction industry during these difficult financial times”.

SB10-116, the Public Contracting Jobs Protection Act will require public entities to reimburse contractors for their costs for additional directed work until a change order agreement can be reached.  Current practices require contractors to pay upfront labor and materials costs for any additional work until a change order agreement can be reached which sometimes takes many months.  SB10-116 will ensure contractors are paid on a timely basis for change directive work, creating a great stimulus for the Colorado economy and keeping Colorado workers employed.

By Lynn Bartels , The Denver Post

A Pueblo lawmaker who said small businesses are going under because they aren’t being paid on time on Friday killed his own proposal to try to fix the problem.

Democratic Sen. Abel Tapia said he didn’t have the votes to pass the measure, although at one time he thought he did.

“Everybody agrees there’s a problem with contractors getting paid, but the lobbyists for the cities, the lobbyists for the counties and the lobbyists for the utilities really put pressure on their lawmakers not to support this bill,” he said.

Senate Bill 95 would have required that invoices be paid within 30 days, or within 25 days if a subcontractor is involved. Owners, contractors and subcontractors would have had to pay at least 12 percent interest on unpaid invoices.

Tapia told the Senate that many businesses are going at least 90 days without being paid, which impacts their lines of credit and bond ratings.

Tapia said he could have saved his bill by watering it down so much that it was almost irrelevant. He said he didn’t want to see that happen.

Sen. Chris Romer, D-Denver, said he couldn’t support the measure because it amounted to micromanaging contracts. But he said he thinks there should be a “Municipal Hall of Shame” for governments that delay payments to contractors.

Sen. Rollie Heath, D-Boulder, agreed late payments are a huge problem for businesses but also said he couldn’t support the bill.

He said he got a flood of letters from subcontractors who said the bill “didn’t accomplish what it said it would.”

In other action, the Senate gave initial approval to a bill critics call “marriage light.” Senate Bill 1260 allows adults in a relationship outside marriage to file beneficiary agreements with county clerks, a boon for those who can’t afford lawyers for wills, power of attorney and other documents, said the sponsor, Sen. Jennifer Veiga, D-Denver.\

This article can be found in the Denver Post here

FOR IMMEDIATE RELEASE (3/20/09)

Contact: Sean Duffy – 303-534-4399

www.buildingjobs4colorado.com

Study Details Major Hit on Jobs, Small Business In Colorado’s Construction Sector

(DENVER) – Stressing that more work is needed to overcome opposition from cities, counties, special districts and quasi-governmental entities that have burdened Colorado contractors with excessively slow payments, supporters of reform legislation have asked legislation to be laid over until the next legislative session, effectively killing SB95 for the 2009 Legislative Session.

The Construction Industry Recovery & Jobs Preservation Act (Senate Bill 95), sponsored by Sen. Abel Tapia and Rep. Jim Riesberg, would create a common-sense statutory framework to ensure that contractors are paid promptly.   The bill is backed by a major statewide coalition – Building Jobs4Colorado (www.buildingjobs4colorado.com) – that includes more than 1,500 employers representing 40,000 Colorado workers.

Construction companies pay their employees, taxes and suppliers promptly, regardless of how long it takes for the company itself to get paid.  It is not uncommon for construction companies to take out loans to float material and payroll costs while waiting to get paid, which on average takes 52 to 90 days depending on where the contractor is in the payment chain.  SB95 was seeking the same remedies that public agencies enjoy today — to be paid for properly performed work in a timely manner.  Public utilities, for example, have the legal right to turn off service if a customer doesn’t pay on time, yet contractors do not have similar remedies in the marketplace.  SB95 would provide a framework for fairness in construction payment cycles.

“The Colorado construction industry is dedicated to working towards a solution to this long standing issue that continues to threaten small business and construction jobs in the state” said Dave Davia, executive director of the Colorado Association of Mechanical and Plumbing Contractors. “We will continue to apply pressure to cities, counties, special districts and quasi-governmental entities until fair and prompt pay standards are achieved.”

Davia said action on the legislation is urgently needed and that the coalition will continue to stress the economic risk to jobs and the economy that stems from inaction.

A study from Colorado State University detailed the broad damage done when local governments and other entities take months to pay contractors’ bills that should be resolved within 30 days.  The result of this ongoing problem is that projects, particularly those funded by taxpayers, lose buying power because of sharply higher interest costs and/or contractors have significantly lower profits from their completed jobs.

By CHARLES ASHBY
CHIEFTAIN DENVER BUREAU

DENVER – Sen. Abel Tapia wants to make sure contractors get paid in a timely manner so they continue to stay in business – and continue to employ workers in these troubled economic times.

That’s why the Pueblo Democrat has introduced a bill to require property owners to promptly pay contractors for projects they’ve completed that cost more than $100,000.

And now a new Colorado State University study argues that the measure, SB95, is not only a good idea, it’s necessary to help keep construction jobs in the state.

The study, “Getting Your Money’s Worth: The Importance of Prompt Payment for the Construction Industry,” show how some contractors are unable to continue to employ workers because they’re waiting for thousands of dollars in money owed them by local governments and other property owners.

“The delay in receiving payments negatively impacts contractors’ bonding capacity, and their ability to secure future work, jeopardizing not only the contractors’ future, but also the future of their employees and their employees’ families,” the study says. Tapia said he’s carrying the bill through the Senate first – it’s already cleared its first committee and awaits a hearing in another – because his House sponsor, Rep. Jim Riesberg, D-Greeley, has tried to get it through the House for the past two years with no success.

Tapia, who’s in the process of selling his own engineering firm to his son, said it’s not uncommon for governments to wait four months or longer for them to pay their construction bills, and even make that a stipulation in construction contracts.

But he said contractors’s banks won’t consider money owed to the business as

collateral in loan applications if it is more than 90 days old, causing

contractors to not get the credit they need to move on to new construction

projects.

“My point of view from a small contractor, a small firm, in this year, in this time frame right now, you are forcing contractors that absolutely need their jobs for survival into a financial situation that could lead them to bankruptcy,” Tapia said. “In this business environment, the typical argument that, ‘If you don’t want to wait that long, don’t sign the contract’ isn’t valid because you won’t get any work at all.”

Tapia’s bill calls for prompt payments with 75 days after a final inspection is approved. He said that should be sufficient for property owners to know if the work was done properly.

He said local governments routinely try to put off those payments because they accrue more interest in their accounts.

The measure is pending before the Senate Appropriations Committee, which Tapia chairs, because the Colorado Department of Transportation and the University of Colorado say they need to hire additional workers to comply with the measure.

Tapia, however, said he doesn’t believe that’s true partly because no other state agency has made that claim.

The original article can be found on the Pueblo Chieftain website.

By David Milstead, Rocky Mountain News

Why was David Morrill, of Aurora’s Concrete Frame Associates, testifying at the Capitol about “prompt pay” legislation for contractors?

Try $7.6 million in unpaid work, out of $27.7 million in annual revenue, at the end of his last fiscal year in September.
“The current system simply does not work,” he said. “It does not pay us on time.”

He was not alone: Gary Meggison, of construction giant Weitz, said his company had $23.4 million in receivables over 31 days past their due date at Feb. 2. The firm did $285 million in business in Colorado last year, he said.

Tales like that helped sway the Senate State, Veterans, & Military Affairs Committee to send a prompt-payment bill to Appropriations on a 3-2 vote (three Democrats, two Republicans) – albeit unenthusiastically.

In doing so, the committee backed a group of general contractors and building-trades groups over a stream of public and private-sector opponents. Representatives of the Colorado Municipal League, the state’s special districts, the city of Denver and Qwest all testified against the bill.

Their message: The bill interferes with private contracts, requires a rewrite of all their legal documents, imposes new mandates on the construction industry and removes important tools for ensuring that subcontractors’ work is properly done.

Yet, they did not deny that contractors and subcontractors have ballooning receivables. “The government entities came in with their white hats, but as the other side started testifying, the hats turned a shade of gray,” said Sen. Bob Bacon, D-Fort Collins.

Not testifying, however, was one of the groups the bill was supposed to benefit: The Colorado chapter of the American Subcontractors Association.

Executive Director Debra Miller said last week that her group is withholding support for the bill because it still allowed payment terms that were too lengthy and gave contractors too much power over “retainage,” a contract provision that holds payments back until the work is deemed satisfactory.

Said Bacon, before voting in favor: “I still need to investigate whether this is prompt pay for small contractors and subcontractors.”

WHAT’S NEXT

* After passage by the Senate State, Veterans, & Military Affairs Committee, SB 09-095 heads to the Senate Appropriations Committee.

This article can be found on the Rocky Mt. News here

By Michael Gifford, posted in the Denver Post (Op-Ed):

Jump-starting Colorado’s sluggish economy through a strong focus on long-overdue public infrastructure projects is a promising priority.

From President Obama, to Governor Ritter to Mayor Hickenlooper, leaders at every level are making public projects and the thousands of jobs they will create a pillar of economic recovery plans. We applaud these efforts.

But there is a warning sign for these leaders, and for taxpayers. Without basic reforms in how government and private-sector developers pay for construction services, the result will be lost jobs and higher project costs due to slow payment to the contractors who perform the work.

It’s a serious and lingering problem. In the late 1990′s and early in this decade, contractors enjoyed getting paid, on average, within 30 to 35 days. Today that number has soared to between 52 and 90 days, depending on the contractor.

Up until now, contractors have compensated for the slow payment by raising their prices, and borrowing from banks so they could pay their employees on time while waiting for the cash to come in. But in the current economic climate, many small businesses can no longer borrow.

The result is that as Colorado gets ready to accelerate building, there will be no money left in the till to pay employees. The much hoped for increase in jobs may not come to pass.

The Associated General Contractors of Colorado (AGC) recently met with state and local leaders to express our enthusiasm for including infrastructure projects in their economic recovery plans.

We also said that it’s vital to maximize the “bang for the buck” coming out of these projects, and, without a solid promise of prompt payment, a lot of the economic potential may never be realized.

The risks of maintaining the status quo are real and substantial – and not limited to higher costs. These projects need the broadest pool of available subcontractors to ensure quality, particularly when we’re talking about transportation and building projects large and small.

Plus, our economy counts on a strong and vibrant construction industry, since we employ about 9 percent of the total private-sector workforce, with over 160,000 jobs.

A recent economic impact study showed that the construction industry generates nearly $2.5 billion for Colorado’s economy, and a $1 billion increase in construction spending in Colorado will bring 24,000 high-paying jobs to the state.

The solution is not difficult. Our industry is seeking passage of a pro-jobs bill in the Legislature that will require prompt payment for construction services performed.

It’s a common-sense measure that demands nothing more from government and our other customers than any vendor requires from average Coloradans.

Follow the terms of the contracts they have signed and pay their bills on time within a basic, established framework.

We would prefer not to have to seek this help from the Legislature, but the lack of regulation we’re suffering from today is hurting our businesses and our workers.

Our political leaders are exactly right to focus on infrastructure projects as a central way to boost Colorado’s economy. Many business leaders recognize that we have built our way out of the last few recessions.

As they begin to move from a good idea to the itty-gritty details of implementation, ensuring prompt payment for the home-grown businesses that are eager to work on these projects must be a central priority.

We know that taxpayers and our economy can benefit from these projects, and to ensure that goal, contractors need a fair shake. Nothing more; nothing less.

_______________________________________________________________________________

Michael Gifford is executive director of AGC of Colorado, a trade association representing more than 300 contractors, subcontractors, suppliers and others that complete 70 percent of commercial building in the state. EDITOR’S NOTE: This is an online-only column and has not been edited.

Click here for the article on the Denver Post.