Shan Davis & Associates Recovers $838,000 From Payment Bonds in Construction Disputes

Since November 2011, Shan Davis & Associates has recovered $838,000 for two of its clients from payment bonds issued on two public works construction projects in Clark County, Nevada. The general contractors on both projects, the Laughlin Greenway Trail Park and the Flamingo/Boulder Highway, ceased paying subcontractors and material suppliers for the work they performed, and materials and equipment they supplied. General contractors are required to post payment bonds on public works projects to ensure that subcontractors and material suppliers get paid in the event a dispute arises during construction, or the general contractor goes insolvent. Unlike private construction projects, subcontractors and material suppliers cannot file mechanic’s liens against property owned by the government to collect payments for the labor and materials they have supplied. On public works projects, it is important for subcontractors and material suppliers to understand their rights to payment against the bond. When making a claim against a payment bond, time is of the essence, and failure to make a timely, correct claim could result in a waiver of the subcontractor or material supplier’s right to payment under the bond.

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