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Getting Paid: On Time

Getting Paid: On Time. A Guide To Mechanics’ Lien and Bond Claims and The Prompt Payment Act. Speaker: Jim Sterr IDOT. Topics . Do Your Homework Lien and Bond Claims Liens Against Public Funds (770 ILCS 60/23c) Bond Claims (30 ILCS 550/0.01) Prompt Payment Act (30 ILCS 540/7).

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Getting Paid: On Time

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  1. Getting Paid: On Time A Guide To Mechanics’ Lien and Bond Claims and The Prompt Payment Act Speaker: Jim Sterr IDOT

  2. Topics Do Your Homework Lien and Bond Claims Liens Against Public Funds (770 ILCS 60/23c) Bond Claims (30 ILCS 550/0.01) Prompt Payment Act (30 ILCS 540/7)

  3. Do Your Homework Properly identify the IDOT contract number and the contractor’s job or project number Have a written contract (with contractor) in place before you start work Stay current on submission of payrolls, material certifications, etc. and keep copies Befriend the resident engineer/technician – always remember your contract is with the prime contractor

  4. Topics Do Your Homework Lien and Bond Claims Liens Against Public Funds (770 ILCS 60/23c) Bond Claims (30 ILCS 550/0.01) Prompt Payment Act (30 ILCS 540/7)

  5. Lien and Bond Claims An unpaid Subcontractor or Supplier may file a claim against the bond and a lien against Layered protection Seek legal advice

  6. Topics • Do Your Homework • Lien and Bond Claims • Liens Against Public Funds (770 ILCS 60/23c) • Bond Claims (30 ILCS 550/0.01) • Prompt Payment Act (30 ILCS 540/7)

  7. A Notice of Claim for Lien on Public Funds: • Must contain a sworn statement and/or be notarized • Must identify the contract and specify the unpaid items and the dollar amount claimed for each • Must be served on the Secretary of Transportation, the Prime Contractor and Subcontractor (if applicable) by hand delivery or certified mail (with return receipt requested, delivery to addressee only) • Will cause the withholding of the claimed amount from the Prime Contractor for ninety (90) days, but does not force IDOT to pay the lien claimant

  8. Continued… • Liens against public funds apply only to monies that become due the contractor after the lien is filed • If you wait to file a lien until the contract is almost complete, there may be insufficient funds available to cover all liens • No contract retainage • Any funds available will be shared among all lien holders

  9. Continued… • Must file suit within ninety (90) days if not paid • Must provide copy of suit to Department within ten (10) days

  10. Topics • Do Your Homework • Lien and Bond Claims • Liens Against Public Funds (770 ILCS 60/23c) • Bond Claims (30 ILCS 550/0.01) • Prompt Payment Act (30 ILCS 540/7)

  11. A Bond Claim • The Public Construction Bond Act (30 ILCS 550/0.01 et. seq.) provides in part: “Every person furnishing materials or performing labor, either as an individual or as a subcontractor for any contractor… where bond shall be executed as provided in this Act, shall have the right to sue on such bond … for his use and benefit…”.

  12. A Bond Claim • Does not cause IDOT to withhold payment from the Contractor • Preserves claimant’s right to sue under bond • Must be filed within 180 days from the last date of furnishing work or materials on the job • Must be served in writing on the Secretary of Transportation, with copies to the Prime Contractor, Subcontractor and Bonding Company • May need to be followed up by a lawsuit

  13. Topics • Do Your Homework • Lien and Bond Claims • Liens Against Public Funds (770 ILCS 60/23c) • Bond Claims (30 ILCS 550/0.01) • Prompt Payment Act (30 ILCS 540/7)

  14. Prompt Payment Act • Contractor must pay subcontractor/suppliers within 15 days of receiving payment • Does not guarantee payment for rejected work or when payrolls and certifications have not been submitted • After 15 days- interest at 2% per month • Administrative hearing is an immediate option • Seek legal advice before seeking an administrative hearing

  15. The End

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