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Small & Emerging Contractors


What's New: Public-Private Partnerships (P3s)

Georgia P3 Bill Includes SFAA Amendments

Monday, January 27, 2014  

Georgia SB 255 was introduced late last session for consideration in 2014. The bill would authorize the use of public private partnerships (P3s) for public infrastructure. A qualifying project under the legislation must be located on real property owned or leased by a public entity and would include any improvements to such property and airport projects, port projects and energy conservation or other measures to reduce the operating costs of a public facility. SB 255 was the subject of an interim study commission in Georgia, which recommended that the bill be passed in 2014.

SFAA and AIA worked with the bill sponsor and the chair of the study commission to explain the value of bonding the construction portions of P3s. As originally drafted, the bill did not contain all the necessary cross references to the Georgia Code provisions regarding state and local bond thresholds. AIA recently obtained a copy of SB 255 as amended and to be considered this week in the Senate Transportation Committee. Under the bill, the P3 agreement must require bonding in compliance with the Little Miller Act. The bonding provision now in SB 225 is as follows:

(7) Delivery of maintenance, performance and payment bonds, letters of credit, or other form of security acceptable to the responsible public entity in connection with the development or operation of the qualifying project, and in the forms and amounts required Code Sections 13-10-40, 13-10-41, and 13-10-60, or for local government projects, Article 3 of Chapter 91 of Title 36 for those components of the qualifying project that involve construction;

In addition, the cross references that SFAA requested also have been included in the provisions regarding material default so that if the private investor defaults and the public entity takes control of the P3 project, the public owner gets all the rights and remedies under the bonds. SFAA believed that a specific reference to the bonding requirements in the Georgia Code also was necessary in this provision to clarify that the subcontractors, suppliers and workers that can file a payment bond claim on the general contractor’s bond should have the same rights when the contractor goes into default. The default, however, should not expand the class of persons that can make claims on the payment bond.

The bill has been corrected to include all the correct cross references from the Georgia Code that require public works projects to be bonded.

View PDF version (or visit Government Relations / Public-Private Partnerships (P3s) - Public)

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