Category Archives: News

Public Construction: Interest Rates for Late Payment

By on November 11, 2022

Recently, the Massachusetts Appeals Court confirmed the propriety of a strict interpretation of the Prompt Payment Act, M.G.L. c. 149, § 29E (the “PPA”). The PPA enforces strict timelines for payments on private construction projects with original contract prices of $3,000,000 or more. But what does this mean for public construction projects? In short, nothing. The payment schedules for public works and public building construction continue to be directed by M.G.L. c. 30, §§ 39F, 39G, and 39K. Contractors and subcontractors should refer to these statutes in their entirety prior to embarking on legal action.

Payment of Subcontractors

M.G.L. c. 30, § 39F operates somewhat similarly to a pay-when-paid clause. The statute dictates that subcontractors should be paid for their work once the general contractor has received payment from the awarding authority for said work. The statutory language requires payments to be made “[f]orthwith after the general contractor receives payment… for the labor performed and the materials furnished by that subcontractor.” If the general contractor receives payment from the awarding authority and fails to make timely payments to subcontractors, the awarding authority is tasked with taking “reasonable steps to compel” the general contractor. However, this rarely happens in practice because the most common source for payment delays is the awarding authority itself. In such cases, subcontractors have two paths forward:

(1) wait until the general contractors have restored the project’s cash flow while earning interest on the outstanding balance; and/or

(2) continue performance through to substantial completion and make a demand for direct payment upon the awarding authority.

The latter encourages construction to continue by allowing subcontractors that have reached substantial completion to circumvent the general contractor and make a demand for direct payment from the awarding authority. This is allowed because §39F requires general contractors to pay subcontractors their retainage “[n]ot later than the sixty-fifth day after each subcontractor substantially completes his work in accordance with the plans and specifications.” If a subcontractor has still not received payment “within seventy days after the subcontractor has substantially completed the subcontract work” then the “subcontractor may demand direct payment of that balance from the awarding authority.” This effectively offers subcontractors two sources of recovering payment by placing pressure upon both the general contractor and awarding authority to pay outstanding invoices and retainage. 

Payment of General Contractors

The payment of general contractors is dictated by M.G.L. c. 30, §§ 39G and 39K. Specifically, §39G controls the payment of general contractors working on “public ways, including bridges and other highway structures, sewers and, water mains, airports and other public works,” while §39K controls the payment of general contractors working on “any public building.” The statutory language involving payment is nearly identical in both §39G and §39K as they both require awarding authorities to pay general contractors “[w]ithin fifteen days… after receipt from the contractor… of a periodic estimate requesting payment of the amount due for the preceding month.” Retention is due “within sixty-five days” after substantial completion. If an awarding authority fails to pay its general contractor according to this statutory schedule, the general contractor may pursue interest on all late payments.

Entitlement to Interest for Late Payments

It is in the public’s interest that the government pays general contractors in a timely manner throughout construction because being assured of payment is part of what allows the public to procure construction work at the lowest price. In the event of delayed payment, M.G.L. c. 30, §§ 39G and 39K grant contractors a statutory right to interest on all late payments. Under §39G and §39K, daily interest is applied “at the rate of three percentage points above the rediscount rate then charged by the Federal Reserve Bank of Boston commencing on the first day after said payment is due and continuing until the payment is delivered or mailed to the contractor.” After receiving this payment, the statute obligates general contractors to “pay each subcontractor a portion of any such interest paid in accordance with the amount due each subcontractor.” This automatic award of interest acts to ensure general contractors, and in turn, their subcontractors, are fairly compensated for the delays of the awarding authority. This interest should be automatically added to each and every late payment by the individual tasked with making payments on behalf of the awarding authority.

Failure to Pay Interest on Late Payments

M.G.L. c. 30, §§ 39G and 39K obligate awarding authorities within the Commonwealth to automatically add interest to all late payments on a construction contract. Should the awarding authority fail to do so, the general contractor should remind them of this statutory obligation which, if not followed, constitutes a breach of contract. This reminder serves as a simple yet powerful tool as it puts the awarding authority on notice of its breach of contract. Once a party is informed that it has breached a contract, it must take steps to cure said breach. If the awarding authority fails to make the statutory interest payments, contractors may pursue breach of contract damages under M.G.L. c. 231, § 6C.

M.G.L. c. 231, § 6C entitles parties to interest payments on damages stemming from a breach of contract. This statute can be highly persuasive to awarding authorities because it entitles the prevailing party to an interest rate of “twelve per cent per annum from the date of the breach.” This rate is often significantly higher than that offered by M.G.L. c. 30, §§ 39G and 39K which, as of November 3, 2022, was a mere 4.00%. Courts have found that M.G.L. c. 231, § 6C prevails over M.G.L. c. 30, §§ 39G and 39K. Therefore, should a general contractor pursue litigation, the awarding authority is exposed to a higher statutory interest rate. Consequently, a firm request for interest can be sufficient to encourage awarding authorities to cut a check and to get payments moving again on a project.

David Travers named as one of the Best Lawyers in America 2023

By on August 18, 2022

Strang, Scott & Giroux, LLP is pleased to announce that Partner David Travers has been named one of the Best Lawyers in America 2023 in the Construction Law practice area. Mr. Travers works with Owners, general contractors, and specialty subcontractors across the country to deliver successful projects and, when necessary, resolve disputes.

To learn more, please visit Mr. Travers’ Best Lawyers profile here.

Strang Scott is Hiring – Associate Lawyer

By on December 13, 2021

Boston office of a growing regional construction-focused boutique law firm seeks a full-time mid-level attorney.  Preference will be given to candidates with significant construction law and litigation experience, including experience in contract drafting and dispute resolution. The candidate must have admission to the Massachusetts Bar. Candidates also admitted to the New Hampshire Bar are preferred.  Candidates must have top academic credentials, excellent writing, negotiation, and communication skills.   Flexible work arrangements and scheduling are available.

To apply, please submit cover letter and resume to cstrang@strangscott.com.

Strang Scott Attorneys Selected as Super Lawyers 2021

By on October 20, 2021

Strang Scott is honored to announce the listing of both Christopher Strang and David Travers as listed in the 2021 Massachusetts edition of Super Lawyers. Mr. Strang is being recognized for his outstanding work in construction litigation for the thirteenth consecutive year, Mr. Travers is receiving the honor for the ninth consecutive year. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

Strang Scott Announces New Partner

By on February 24, 2021

Strang Scott is proud to welcome David Travers to the firm as a Partner.  Mr. Travers’ practice is focused primarily on the construction and development industries, further expanding Strang Scott’s construction expertise and reach. He counsels clients in the project-facing and business issues that construction companies and developers confront in the course of their work. Outside of the construction industry, Mr. Travers represents distributors, manufacturers, restaurant owners, condominium associations, commercial landlords and tenants, and a variety of other business owners. 

“Bringing my practice to Strang Scott was a simple decision,” says Travers. “It provides both me and my clients access to top construction law talent in both Massachusetts and New Hampshire, while providing a significant value proposition that removes barriers and improves client relationships.”

Christopher Strang says, “Having David Travers join the Strang Scott team is exciting on many levels. He comes with a mastery of the construction laws our clients need, but also a firm understanding of industry practices. This helps us to grow into a more robust regional construction law firm, with many resources to advise and represent our clients.”

Mr. Travers was born and raised in Sudbury, Massachusetts. He earned his B.A. from the University of Wisconsin-Madison and his J.D. from Suffolk University Law School. 

Mr. Travers can be reached directly at 857-233-5534, ext. 203 or at dtravers@strangscott.com

Strang Scott Announces Hiring of New Associate

By on January 15, 2021

Strang Scott is pleased to welcome Mikaela Rice to the firm.  Ms. Rice is a 2020 graduate of Boston College School of Law.  While in law school, Ms. Rice worked with the Massachusetts Attorney General’s Office, a boutique litigation firm, and served as a judicial intern for the Court of Common Pleas in Philadelphia.

Ms. Rice hails from Western Connecticut, and earned an undergraduate degree with honors from Boston College, majoring in environmental geoscience. She was a three-time recipient of the Earth and Environmental Science Departmental Honors Undergraduate Research Fellowship, tutored her fellow students, and served as manager of the nationally ranked Boston College Women’s Hockey team.

At BC Law, Ms. Rice received the Curtin Public Interest Fellowship, participated in the Eagle to Eagle Mentoring Program, and earned her 3:03 certification, allowing her to act as a student practitioner of law. 

Ms. Rice plans to be active in the Boston Bar Association and construction industry groups. She will focus her practice on litigation and construction law.  She enjoys sports and exploring the outdoors, as well as volunteering for public interest activities.

BBA Appoints Strang to Chair Committee for New Lawyer Employment

By on January 5, 2021

Strang Scott is honored to announce the appointment of Christopher Strang as the chair of the Boston Bar Association’s Committee for New Lawyer Employment. This Committee is part of the Boston Bar Association’s Law School Graduate Mentoring Program, which focuses on Bar Coaching and Career Transition Coaching.

The purpose of this committee is to provide guidance to new lawyers in their job searches with advice on resume writing, interviewing, networking and understanding the current landscape of law firms and legal trends in the greater Boston area. The committee utilizes podcasts, blogs and interactive online panels and networking events in order to provide useful content to assist new lawyers navigating a job search during the pandemic. Each new lawyer is also provided an experienced attorney as a personal mentor to more directly address specific needs.

Mr. Strang is passionate about mentoring law students and new attorneys. He has served as a mentor to hundreds of law students and recent graduates over the years and has spoken on dozens of panels advising new lawyers on how to find employment.

Also serving on the committee are:

Jennifer Perrigo, Assistant Dean of Career Services at Boston College Law School
Carla Moynihan, Partner at Sherin & Lodgen
Michael Bamani, Vice President and Counsel at State Street Bank
Nikki Oliveira, Associate at Nutter
Carla Reeves, Associate at Goulston Storrs
 John Jay, Associate at Goodwin

Strang Scott Attorneys Selected as Super Lawyers 2020

By on October 26, 2020

Strang Scott is honored to announce the selection of Christopher Strang as a 2020 Super Lawyer by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the twelfth consecutive year, first as a Rising Star and then as a Super Lawyer. Associate Jennifer Lynn was selected as a Rising Star for the second time. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

Strang Scott Celebrates 10th Anniversary

By on September 14, 2020

Strang, Scott, Giroux & Young is thrilled to celebrate ten years of being in practice. Started in September, 2010, the firm got off the ground with three founding partners. It soon opened an office in Boston’s Kenmore Square, in the shadow of the city’s iconic Citgo sign. Within a year it outgrew that office and moved into a larger space in Kenmore Square. In 2015 the firm opened its New Hampshire office, and in 2018 moved the Boston office to the downtown area where it remains.

Originally focused mostly on construction law and business litigation, the firm since added practice areas in commercial leasing, commercial real estate and development. Our attorneys have been recognized for many accomplishments in the profession, including for outstanding representation of our clients, pro bono efforts and public service activities.

More than anything Strang Scott appreciates the clients, friends and colleagues who have made practicing law here such an enjoyable experience. Unfortunately the in person celebration once planned has to be postponed for now, but will remain something to look forward to for next year. Many thanks to all of our supporters, and the team looks forward to continued success and growth in the years to come.

Strang Scott is Hiring — Associate Lawyer

By on August 14, 2020

Our Boston office seeks a full-time associate for a litigation practice with emphasis on construction and business litigation. The ideal candidate will have 2+ years of litigation experience. We are looking for a self-starter and offer the opportunity to largely work from home.

Qualifications

  • Admission to the Massachusetts State Bar, admission to New Hampshire State Bar a plus.
  • Excellent research and writing skills
  • 2+ years of experience practicing in Massachusetts, preferably in construction or business litigation.

To apply, please submit cover letter and resume to bsheridan@strangscott.com.