Governor Brown recently approved Assembly Bill 164 on August 13, 2013 which ensures that “P3” construction projects are completed and all interested persons receive payment.
P3 (Public-private partnerships, also known as Alternative Financing and Procurement) projects typically involve governmental entities that seek out private investors or developers to pull resources together to construct a building, road, etc. on public property.
Unfortunately, those same governmental entities may literally have “sticks in the air” when a private investor/developer decides to pull out and the laborers and suppliers are left unpaid. AB 164 now requires private entities leasing public property to provide payment and performance bonds like any other public works project. If a private entity on a P3 project goes out of business, or doesn’t pay up, the payment and performance bonds will trigger.