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Legislative Track Record
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ASM Legislative Track Record

A Proven History of Legislative Success
   

Through legal action and strong legislative advocacy, ASM has helped protect the rights of subcontractors on public and private work for over 60 years. Today, ASM is widely recognized as THE voice of subcontractors on Beacon Hill.

ASM has an impressive track record of passing legislation favorable to subcontractors, and defeating bills harmful to the industry. Below is a brief chronology of our major legislative successes.

 

5% Retainage Law, 2014

In August 2014, the Massachusetts Legislature enacted c.276 of the Acts of 2014, An Act Relative to Fair Retainage Payments in Private Construction," commonly known as the 5% Retainage Law.   More than four years in the making, the law represents a major victory for the construction industry in the face of strong opposition, and shows the power of collective action.   A compromise negotiated between the Associated General Contractors and the Associated Subcontractors of Massachusetts, the law takes a ground-breaking approach that is fair to all parties, and may serve as a model for other states.

A natural extension of the 2010 Prompt Pay Law, the new law reduces the hold-back for retainage to no more than 5%, and sets up a clear process and timeline for establishing substantial completion, closing out the project, and releasing retainage funds.   The new close-out process sets a new standard for the industry, not only speeding the payment of retainage to contractors and subcontractors but also accelerating the final completion of the work and submission of all “deliverables” – which is much to the benefit of project owners as well. 
The law took effect November 6, 2014 for all contracts signed after that date, and like Prompt Pay, applies to all projects over $3 Million in total project value, except residential projects of 1-4 units.

Massachusetts is now the 30th state to address the problems of retainage in the private sector by statute – but only the 10th to cap retainage at 5% on private work.   It was an extraordinary achievement!

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Unemployment Insurance Reform, 2014

In June 2014, the Massachusetts House and Senate approved a compromise Minimum Wage and Unemployment Insurance (UI) Reform Bill that represents a huge victory for ASM and the construction industry. 

Earlier in the year, the House and Senate had passed very different bills, with the Senate proposing changes to the UI system that would have hit many contractors with a catastrophic 36% increase in UI taxes in 2015.   At the urging of ASM and a coalition of major construction industry associations, the House took a more moderate approach.  In the final bill that emerged from conference, the House plan was adopted in its entirety – a testament to our effective advocacy for fair treatment of all businesses on matters of tax policy.

Specifically, the compromise S.2195 provides:

  • An increase in the UI taxable wage base of just $1,000, to $15,000 (rather than increasing to $21,000 as originally proposed);
  • A new expanded but moderate rate scale;
  • New rates remain in effect for three years, through 2017;
  • For the first three years (2015-17),  new Schedule C applies, where the rate tops out at 11.3%, which is lower than the rate in effect in 2014, before the change.
  • Taxes will be based on a three-year look back at payroll (instead of just one year), starting in 2018.

Read a copy of S.2195 here.  See Sections 52 and 72 for more specifics.



Prompt Pay Law, 2010


In August, 2010 Massachusetts became the 33rd state to adopt a "Prompt Pay Law" for private construction, with the passage of c.293 of the Acts of 2010. The most significant construction legislation in more than a decade, the law was a major victory for ASM and the subcontractors of Massachusetts, and the result of a five-year effort by ASM to address serious payment problems in the industry, which put businesses at risk.

The law, codified as M.G.L. c.149, section 29E, took effect November 8, 2010 and applies to all prime contracts with a value of $3 million or more, except 1-4 unit residential projects.  It also applies to all parties to a contract, from owners to sub-subcontractors and material suppliers. 

The goal of the law is simple: to "keep the payment process moving” so that funds flow as they should on construction projects, and prompt payment becomes routine business practice.

The law sets reasonable, "not to exceed” time periods for approval (or rejection) and payment of progress billings; and sets up a similar process for acting on change orders. It provides due process for rejections, and the right to initiate dispute resolution after 60 days. It also eliminates the use of condition-precedent or "pay if paid” provisions, except in two very narrow circumstances; and as a last resort, it allows for the right to stop work for nonpayment.

The Prompt Pay Law represents major change for the construction industry, that was long past due, and we are proud of our role in making it happen.

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Public Construction Reform, 2004


Overview


For years, there were calls for construction reform in Massachusetts, and for years, ASM opposed it, because it did little more than target the filed sub-bid law and eliminate competitive bidding for subcontractors.

But 2004 was different. ASM was part of a 20-member Special Commission of all interested parties (public agencies, legislators and construction industry leaders) who worked over several months to achieve consensus on proposed changes. The result was a true reform package designed to improve all aspects of the construction process — including design, contractor selection and project oversight — while also preserving the best features of the existing law.

Chapter 193 of the Acts of 2004 called for improved designer selection procedures, experienced project managers on all municipal projects over $1.5 million, DCAM certification of subcontractors, pre-qualification of both general contractors and subcontractors on all projects over $10 million, increase in the thresholds that trigger filed sub bidding, authorization to use alternative methods on projects over $5 million, and more.

The reform package easily won the support of the Legislature and the governor and was signed into law on July 19, 2004, bringing the first major changes to public construction in nearly 50 years. ASM is proud of our role in making those reforms possible.

Construction Management at Risk legislation, 2004

In 1997, ASM worked cooperatively with the state's chief building agency, the Division of Capital Asset Management (DCAM), to craft the innovative procurement method used successfully for the state's largest public building project ever: the Boston Convention and Exhibition Center. The procurement method, which combined a CM at Risk process with prequalification of subcontractors and award to the lowest bidder, in turn served as a model for legislation ASM negotiated in 2002 with DCAM for use on courthouse construction.

Against this background, ASM in 2003 forged a team with the Associated General Contractors and Boston Society of Architects to develop comprehensive legislation that would authorize the use of CM at Risk on appropriate large-scale public building projects, and standardize the procedures across all public agencies. In 2004, the ASM/AGC/BSA CM at Risk legislation became the centerpiece of the Construction Reform package proposed by the Legislature's Special Construction Commission.

Under CM at Risk (M.G.L. c.149A), the CM is selected on quality as well as price, comes in early to ensure design plans are good, and is held responsible for costs that exceed a guaranteed maximum price. Trade contractors in the filed sub bid trades are pre-qualified to bid, contracts are awarded to the lowest bidder, and subcontractors enjoy the same contract and payment protections as under current law.

The CM at Risk legislation represents the first statewide authorization of "alternative methods” on public buildings in the Commonwealth, and became available on January 1, 2005.



Preservation of Filed Sub Bid Law, 1990-2004, prior to Construction Reform

Since 1954, Massachusetts' Filed Sub Bid law has allowed qualified subcontractors in 18 trades to compete directly for contracts on public building projects, in a fair and open process that is free of corruption and gets the best deal for taxpayers. The law has a proven record of producing high-quality public buildings that are the equal of any in the country, at the lowest possible price.

For more than a decade, the Filed Sub Bid law came under attack from those who claimed — without evidence — that the law adds significantly to the time and cost of public construction. Between 1990 and 2000, ASM defeated five successive attempts by the governor to either repeal the Filed Sub Bid law outright, or pass "reforms” that were little more than a repeal in disguise. In addition, ASM stopped numerous bills seeking special exemption from the law for state and municipal projects, and in 2002, ASM persuaded the Legislature to stop approving "home rule petitions” seeking exemptions for school construction. On the final round of school exemptions in 2002, ASM won amendments to protect the rights of subcontractors on the exempted projects.

In 2003, the state's fiscal crisis once again prompted calls to "reform” the public construction laws as a way to save money and provide "relief” to cash-strapped municipalities. Bills were filed to curtail competitive bidding and allow the use of design/build. Thanks to opposition from ASM, the bills were set aside while the Legislature formed a Special Commission to review the construction laws and recommend improvements.

ASM was named to the Special Commission to represent subcontractors, and over the course of six months, helped to craft historic legislation that represents reform in the true sense of the word, preserving the best of the existing system (including the filed sub bid) while bringing needed improvements that benefit contractors and public agencies alike.



Public Prompt Pay Law, 1998

In 1998, ASM, AGC and CIM won passage of a "Prompt Pay” law which speeds payment on public projects by requiring state agencies to pay contractors in 30 days instead of 45, on both Ch. 149 building projects and Ch. 30 road and bridge work.



Lien Law Reform, 1996 and 2002

In 1996, ASM and a coalition of industry groups won sweeping reforms to the 100-year-old Massachusetts Lien Law, after a seven-year effort. The new law expanded the scope of lien protection; covered more types of projects; and extended the time limit for claiming a mechanics lien, giving better payment protection to contractors and suppliers on private work. In 2002, ASM won passage of a major correction to the law, to extend the filing deadlines on projects where there is a lien bond in place, and prevent subcontractors from losing lien rights prematurely

Despite broad support for the 1996 reforms, bills are filed in every session to amend the Lien Law and wipe out thehard-won payment protections for subcontractors. Thanks to aggressive opposition from ASM and our industry allies, the bills never see the light of day, and subcontractors' new lien rights remain intact.



Early Victories


In the early years of the association, ASM won significant changes to the public bidding laws that form the basis of the current law:
  • 1954: In response to ASM advocacy efforts, the Legislature changed the public bidding law to provide for sub-bids from 17 separate trades.
  • 1954: ASM helped pass the "direct payment” law, allowing subcontractors to seek payment directly from awarding authorities when general contractors fail to pay.
  • 1956: ASM persuaded the legislature to amend the bid law to allow subcontractors to submit bids to the awarding authority for public opening, instead of directly to general contractors.
  • 1960: ASM succeeded in getting a new law passed requiring general contractors to use the simple, two-page form of subcontract that is still in use today.

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