California Construction Law 2023, Continued

In our last blog post we outlined several new California bills affecting construction law. In Part 2, we cover additional bills and notable court decisions that also potentially affect contractors in the state.

Part 2:

SB991 Progressive Design-Build: Local Agencies Water Projects: Authorizes local agencies, defined as any city, county, city and county, or special district authorized by law to provide for the production, storage, supply, treatment, or distribution of any water from any source, to use the progressive design-build process for up to 15 public works projects in excess of $5,000,000 for each project, similar to the progressive design-build process authorized for use by the Director of General Services, until January 1, 2029.

AB1932 Public Contracts: Construction Manager At-Risk Contracts: Extends existing law until January 1, 2029, which authorizes a county or public entity to utilize construction manager at-risk construction contracts for the erection, construction, alteration, repair, or improvement of any infrastructure, owned or leased by the county (subject to certain requirements, including that the method may only be used for projects that are in excess of $1 million), with the approval of the board of supervisors or the governing body of the public entity.

AB2173 Public Contracts: Payment: Indefinitely extends existing law, which authorizes the retention proceeds withheld from any payment by an awarding entity from the original contractor, by the original contractor from any subcontractor, and by a subcontractor from any subcontractor, to exceed 5% on specific projects. This requires that the director of the applicable department has made, or the governing body of the public entity or designated official of the public entity has approved, a finding prior to the bid that the project is substantially complex and requires a higher retention, and that the department or public entity includes both this finding and the actual retention amount in the bid documents.

Kim v. TWA Construction, Inc.: In this case, the 6th District Court of Appeals of California concluded that a licensed contractor is barred from seeking compensation for work performed by an unlicensed subcontractor by Business and Professions Code Section 7031, resolving previous uncertainty on the issue.

Cell-Crete Corporation v. Federal Insurance Company: In this case, the 4th District Court of Appeals of California clarified that prevailing payment bond sureties are entitled to recover attorneys’ fees incurred in defending against claims against the payment bond, even if those attorneys’ fees were borne by their principals pursuant to a defense and indemnity agreement.

If you’re uncertain of the potential impact of new legislation or court decisions on your business, Ghassemian Law Group can help. Our construction law experts give you the personalized attention of a small firm with the experience and expertise of a large firm. To find out how we can help you avoid legal trouble before it starts and protect your rights, contact us here today.