Provides relative to payments under contract by public entities. (gov sig) (OR NO IMPACT See Note)

Senate Bill 235 amends Louisiana Revised Statutes 38:2191 to strengthen the payment rights of contractors on public works projects and restrict the ability of public entities to withhold disputed amounts. The bill adds a new provision prohibiting public entities from withholding liquidated damages that are contested by the contractor from any payments or monies otherwise owed, provided that such payment does not prejudice the public entity's right to later assert its claim for liquidated damages. The bill also establishes that the provisions governing payments under public contracts cannot be waived by contract terms. Additionally, the legislation expands the remedy available through mandamus proceedings by explicitly providing that contractors can compel payment of attorney fees and accumulated interest in addition to the contract amounts due, while simultaneously excluding the public entity's liquidated damages claims from the scope of mandamus proceedings.

The practical effect of this legislation is to provide contractors with greater financial protection and faster payment on public works contracts across Louisiana. Contractors will now receive timely payment of amounts otherwise owed even when a public entity disputes liquidated damages, eliminating the public entity's ability to use disputed liquidated damages as a device to withhold compensation for work performed. This change particularly benefits construction companies and subcontractors working on state, local, and other public projects who previously faced delays in receiving full payment when a public entity raised liquidated damages disputes. Public entities remain protected by retaining the right to pursue their liquidated damages claims through separate proceedings and maintaining control over the timing and prosecution of those claims outside the mandamus context.

This bill operates within the statutory framework of Louisiana public contract law established in Title 38 of the Louisiana Revised Statutes, which governs public works contracts and procurement by state and local governmental entities. The legislation builds upon existing law that already requires public entities to make progressive stage payments within forty-five days of receiving certified payment requests and final payments within forty-five days of receiving clear lien certificates, with existing provisions for interest at 0.5% accumulated daily up to 15% and attorney fees for non-payment. By modifying section 2191 and cross-referencing section 2248, the bill coordinates with other provisions of public contract law while establishing an important principle that statutory payment protections cannot be circumvented through contractual waiver. The mandamus remedy, a longstanding equitable remedy in Louisiana law, remains available but is refined to ensure contractors recover the full economic benefit of prompt payment, including attorney fees and interest, while keeping the public entity's liquidated damages claims adjudicated separately.