16-1903. Public construction contracts; payment provisions; provisions against public policy, void, unenforceable; failure to pay.
16-1903
16-1903. Public construction contracts; payment
provisions; provisions against public policy, void, unenforceable; failure to
pay.
(a) Subject to the provisions of subsections (b), (c),
(d), (e), (f), (g), (h) and K.S.A. 16-1904 and 16-1905, and amendments
thereto, all owners, contractors and subcontractors, who enter into a contract
for public
construction after the effective date of this act, shall make all
payments pursuant to the terms of the contract.
(b) The following provisions in a contract for public
construction shall be against public policy and shall be void and
unenforceable:
(1) A provision that purports to waive, release or
extinguish the right to resolve disputes through litigation in
court or substantive or procedural rights in connection with such
litigation except that a contract may require
nonbinding alternative
dispute resolution as a prerequisite to litigation;
(2) a provision that purports to waive, release or
extinguish rights to file a claim against a payment or
performance bond, except that a contract may require a contractor
or subcontractor to provide a waiver or release of such rights as a condition
for payment, but only to the extent of the amount of
payment received; and
(3) a provision that purports to waive, release or
extinguish rights of subrogation for losses or claims covered or
paid by liability or workers compensation insurance except that a
contract may require waiver of subrogation for losses or claims
paid by a consolidated or wrap-up insurance program, owners and
contractors protective liability insurance, or project management
protective liability insurance or a builder's risk policy.
(c) All contracts for public construction shall provide that payment of
amounts due a contractor from an owner, except retainage, shall be made within
30 days after the owner receives a timely, properly completed, undisputed
request for payment
according to terms of the contract, unless extenuating circumstances exist
which would
preclude approval of payment within 30 days. If such extenuating circumstances
exist, then payment shall be made within 45 days after the owner receives such
payment request.
(d) The architect or engineer of record or agent of the owner shall review,
approve and forward
undisputed requests for payment to the owner within seven business days of
receipt from the contractor.
(e) If the owner fails to pay a contractor within the time period set forth
in subsection (c), the owner shall pay interest computed at the rate of 18% per
annum on the undisputed amount to the contractor beginning on the day following
the end of the time period set forth in subsection (d).
(f) A contractor shall pay its subcontractors any amounts due within seven
business days of receipt of payment from the owner, including payment of
retainage, if retainage is released by the owner, if the subcontractor has
provided a timely, properly completed and undisputed request for payment to the
contractor.
(g) If the contractor fails to pay a subcontractor within seven business
days, the contractor shall pay interest to the subcontractor beginning on the
eighth business day after receipt of payment by the contractor, computed at the
rate of 18% per annum on the undisputed amount.
(h) The provisions of subsection (g) shall also apply to all payments from
subcontractors to their subcontractors.
History: L. 2007, ch. 163, § 3; July 1.