A Houston Construction Lawyer worth their salt will tell you that government jobs can be dangerous. This is especially true if you are a subcontractor unfamiliar with performing government projects. Some of the most critical issues any subcontractor or prime contractor performing government jobs must know are: the government units protection from breach of contract claims, the statutory protection of real property owned by a government unit, and how to perfect a claim on a bond in lieu of a lien to preserve your remedies.
Bonds in Lieu of Liens & Bond Claims
The real property of the state, including the real property held in the name of state agencies and funds, and the real property of a political subdivision of the state are exempt from attachment, execution, and forced sale. A judgment lien or abstract of judgment may not be filed or perfected against the state, a unit of state government, or a political subdivision of the state on property owned by the state…
Tex. Prop. Code section 43.002. A governmental entity that makes a public work contract with a prime contractor shall require the contractor, before beginning the work, to execute to the governmental entity: (1) a performance bond if the contract is in excess of $100,000; and (2) a payment bond if: (A) the contract is in excess of $25,000, and the governmental entity is not a municipality or a joint board created under Subchapter D, Chapter 22, Transportation Code; or (B) the contract is in excess of $50,000, and the governmental entity is a municipality or a joint board created under subchapter D, Chapter 22, Transportation Code. Tex. Gov’t Code section 2253.021.
Texas statute protects the real property of Government Agencies from the attachments of liens. For this reason, prime contractors or general contractors are required to get performance and/or payment bonds in certain situations to protect its subcontractors; however, to benefit from this protection, subcontractors still must comply with the statutory requirements for perfecting their claims on the bonds.
Perfecting Bond Claims
To recover in a suit under Section 2253.073 on a payment bond for a claim for payment for public work labor performed or public work material delivered, a payment bond beneficiary must mail to the prime contractor and the surety written notice of the claim. The notice must be mailed on or before the 15th day of the third month after each month in which any of the claimed labor was performed or any of the claimed material was delivered. The notice must be accompanied by a sworn statement of account that states in substances: the amount claimed is just and correct; and all just and lawful offsets, payments, and credits known to the affiant have been allowed. Tex. Gov’t Code section 2253.041.
There are additional statutory requirements for your notice of claim on the applicable bond if you are a subcontractor and don’t have a written agreement with the prime contractor. There are even more requirements of your notice depending on the billing/pricing method used under the agreement (lump sum, unit price, etc.) and even more requirements if you are seeking payment of retainage. Furthermore, there are specific persons to which this claim on a bond notice must be sent to perfect your claim. See Tex. Gov’t Code section 2253.048. The references to the statutes above are some of the statutory requirements covering perfecting a bond claim. The statutes cited herein are by no means an exhaustive list of the statutes governing government jobs or perfecting claims on bonds.
A subcontractor or prime contractor that is not accustom to performing construction services or providing goods for a government unit may never know that mine field they are walking into when it comes to preserving your remedies at law. The Texas legislature has constructed a gauntlet in order to prevent or hinder subcontractors or prime contractors from pursuing a government unit for breach of a construction contract or encumbering any assets of the government unity to induce it to pay. As such, we recommend that you reach out to the Houston Construction Lawyers at the Spencer Law Firm before you begin your project to be sure you are protected and know what to do before issues arise.
For information on bidding opportunities, visit some of the following pages: https://www.txdot.gov/business/letting-bids/bidopps.html and https://tpwd.texas.gov/business/bidops/current_bid_opportunities/
Contact a Houston Construction Lawyer
If you begin to have problems under your construction contract, you should immediately contact Loren M. King, a Houston Construction Lawyer who is familiar with construction law, rules and regulations and may be able to assist you with any and all construction related disputes or problems. You should act immediately as construction law is highly regulated and has quick deadlines that general contractors and subcontractors must comply with or order to preserve their rights and remedies.