Here is a brief update regarding several legislative issues that are likely to arise in the next session in 2015.
By:
Steven B. Kaplan, Esq.
Michelson, Kane, Royster & Barger, P.C.
Currently, the maximum retainage that can be withheld on State projects administered through DCS and UCONN is 10% (per Conn. Gen. Stat. section 49-41b). For several years, through administrative policy, DCS had been withholding 7% and then reducing retainage to 3.5%, or lower, as projects neared completion. Recently, however, DCS has withheld 10% retainage on several design build projects (ongoing CCSU dormitory project). The agency, through its legal counsel, reports that the practice of withholding lower levels of retainage will continue on non-design build projects. CSA will probably seek legislative action soon to implement 5% retainage for all state projects, including DCS and UCONN. (By statute, CDOT is at 2 ½% and municipal and private construction projects are at 5%.)
In the last legislative session, per Special Public Act 14-18, the Legislature directed the Commissioner of DAS to establish a working group known as the "Construction Contracting and Bidding Transparency Group." The purpose of the group is to study state construction contracting and subcontracting processes, and issue a report to the Legislature by January 2015. This study committee was established primarily in response to legislative proposals that sought changes to the bid listing requirements for DCS projects. Currently, under Conn. Gen. Stat. section 4b-93, all general bids for State construction contracts exceeding twenty-five thousand dollars are required to list the subcontractors (and their prices) who will be performing the Masonry, Electrical, Mechanical, and HVAC work, and also to use a standard, simple and "clean" subcontract form (per Conn. Gen. Stat. section 4b-96). Proposals submitted in the last legislative session sought to expand the requisite bid listing categories to as many as twenty or more subcontractor categories. A number of individuals representing contractor and subcontractor interests sit on this committee, and are seeking a modest and reasonable expansion of the bid listing categories, as well as broadening the requirements to use a clean subcontract form on all state projects. The study committee's final report is sure to provide the basis for legislative proposals on this subject next year.
- Statute of Limitations on State Projects:
By now, everyone is aware that in the case of State of Connecticut v. Lombardo Brothers Mason Contractors, Inc., et al, 307 Conn. 412 ( 012), the Connecticut Supreme Court held that there was no statute of limitations that precluded the State from bringing an action against contractors, subcontractors, or design professionals, or their sureties and insurance carriers, at any time after the completion of a state project. (In the Lombardo case, the State sued all contractors, subcontractors, design professionals, and their sureties and insurance carriers regarding problems with the UCONN Law School project some twelve years after its final completion.) The Supreme Court's decision was based on the doctrine of sovereign immunity (one cannot sue the State without its permission), as well as the legal theory of nullum tempus - that there is no time limit by which the king can bring a legal action against its subjects.
Predictably, the construction and design professional community have been seeking to change this result through legislation that imposes reasonable statute of limitations on the State for bringing such actions (i.e., ten-twelve years). Such a proposal failed in the last session, but is expected to be aggressively pursued again in the upcoming legislative session.
Steven B. Kaplan, Esq.
Michelson, Kane, Royster & Barger, P.C.
10 Columbus Boulevard
Hartford, CT 06106
Tel: 860-522-1243
Fax: 860-548-0194
