Bill Would Protect Oklahoma Subcontractors from Getting Stiffed by Developers

By Francis-Smith, Janice | THE JOURNAL RECORD, February 23, 2009 | Go to article overview

Bill Would Protect Oklahoma Subcontractors from Getting Stiffed by Developers


Francis-Smith, Janice, THE JOURNAL RECORD


It happens to every subcontractor eventually, but some have worse experiences than others, said David Knox of Oklahoma City's Knox Glass. A subcontractor may invest a substantial amount of work and materials in a project without receiving any payment for months - perhaps without even receiving word regarding when payment might be expected.

Even if the subcontractor or general contractor suspects the developer has run out of money and is unable to pay for the finished project, the contractors cannot stop work for fear of being sued.

"At that point, you're just pouring cash out the door and not getting paid for it," said Knox, who also serves as president of the Oklahoma chapter of the American Subcontractors Association. "We're trying to stop the bleeding."

Contractors and subcontractors suffer if a developer has failed to "do his due diligence" and accurately determine if they have enough to finish a job before they hire a contractor, said state Sen. Harry Coates, R-Seminole.

"If you're a subcontractor and you haven't been paid, you don't want to throw good money after bad," said Coates. "But a contractor that hasn't been paid can't just walk off the job - that's breach of contract."

The Subcontractors Association requested the language proposed in Senate Bill 1012, by Coates. The Private Construction Progress Payment Act may undergo some changes before the end of the legislative session, said the association's lobbyist James Walker, but the intent is to provide some protections for contractors and subcontractors working on projects that exceed 60 days. …

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