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AB 626 Case Study

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On January 1, 2017, California ordered new enactment, AB 626 signed by Governor Brown. This act institutionalizes the cases procedures for all public work contracts every single open work contracts, and executes critical changes to the way claims are handled. Before the act came into existence, there were problems regarding the payment timings and also the payment amount. This new law was imposed instead of amending the previous one to have better clarification of rules and regulations which the owners and workers are required to adhere to. These provisions are mandatory for the public entities (Sedgwick LLP, 2016). Public works service providers are required to put forward claims to the public owners by certified mail or registered mail, with …show more content…

This adds new Public Contract Code, under section 9204. This law requires all the state and local contractors, who have entered into public contracts on or after 1st January, 2017, to submit new procedural requirements for claims on any public work project (Smithcurrie, 2017). This bill was mainly passed because of United Contractor’s support and it was sponsored by David Chiu, the Assemblyman. It has been enacted for the betterment of all the citizens and the workers of construction industry of California. This policy was developed and also implemented by the State government. The Department of Transportation, Department of Corrections and Rehabilitation, Military Department, Department of General Services, Department of Parks and Recreation, Department of Water Resources and the High-Speed Rail Authority are not to be included in the “public entity”. The “public work project” refers to building, repair, alteration, erection, improvement of any public structure, construction and other similar work ((Murai, 2017). The claim herein is defined as a “separate demand by contractor sent by a registered or certified mail”. This section would become ineffective after 31st December, 2019 unless it is renewed. Instead of making amendments, the government declared this law as it has new schemes to resolve several issues. AB 626 provides mandatory three step documentation, informal resolution or dispute resolution procedures which is be followed by public bodies in

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