President signs surface transportation law including P3 provision

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President Obama signed the federal surface transportation legislation (H.R. 4348), ending a series of short-term reauthorizations and giving U.S. DOT officials an unprecedented opportunity to address inadequate payment assurances for subcontractors identified by the American Subcontractors Association.

 “This bill will keep thousands of construction workers on the job rebuilding our nation’s infrastructure,” the President said as he signed the $105 billion, two-year reauthorization bill at a White House ceremony. The new law creates an opportunity for DOT to address the lack of payment assurances for subcontractors on transportation projects financed by public-private partnerships.

Under the law, the Secretary of Transportation will, within 18 months, “develop standard public-private partnership transaction model contracts for the most popular types of public-private partnerships” and “encourage states, public transportation agencies, and other public officials to use the model contracts as a base template when developing their own public-private partnership agreements for the development, financing, construction, and operation of transportation facilities.” As the DOT develops standards for structuring P3s,

The ASA leadership said they will urge that those standards reflect sound practices for assuring the payment of subcontractors. Projects financed by P3s may lack traditional payment assurances like mechanic’s lien and payment bond rights, and ASA is campaigning for adoption of needed policy reforms. Read More.

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