What is the goal of the government being more strict on construction they own? Are they liable if something goes wrong?
1 reply
Dec 13, 2019
Government projects will generally face much more regulation than projects that are privately owned. Each relevant regulation may have a different cause or purpose.
But, the underlying cause for most of these regulations is to ensure that government funds put toward construction projects aren't wasted. And, on top of that, additional formality stems from warding off improper business relationships between the government and private businesses.
Here are a few relevant examples:
- Payment bonds are required on public projects because a private business cannot place a mechanics lien on publicly owned property.
- Performance bonds are required to ensure that contractors perform the work they've agreed to do, and ward off bidders who may not be able to undertake the project.
- Bid bonds are required in order to ensure that only serious bidders apply, relieving some of the administrative burden from those who review bids.
- Prevailing wage laws are in place to ensure local workers don't get undercut and aren't shouldered out of competing for local jobs.
- Certified payrolls are required to ensure prevailing wage compliance and to help thwart fraud and waste on publicly owned projects.