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Texas Construction Association Is Born (from San Antonio Construction News, Oct 98)
If you are a subcontractor or supplier, you should be interested in the genesis of a new organization in Texas. The Texas Construction Association has begun operations in Austin to serve the construction subcontractors and suppliers of Texas.
The Texas Construction Association (TCA) was formed by 12 Texas trade associations. These are the American Subcontractors Association of Texas, Associated Plumbing-Heating-Cooling Contractors of Texas, Mechanical Contractors Association of Texas, National Electrical Contractors Association, SMACNA North Texas Chapter, Southwest Terrazzo Contractors Association, Texas Fence Association, Texas Fire Sprinkler Contractors Association, Texas Iron Workers Employers Association, Texas Masonry Council, Texas State Wall & Ceiling Association, and the Texas Structural Steel Institute.
In a recent interview with SA Construction News, Raymond Risk, of the American Subcontractors Association of Texas, described TCA’s mission. "The leaders of the founding organizations wanted to establish an organization that would support legislative efforts favorable to construction subcontractors and suppliers. They want TCA to encourage the political and legislative involvement of its membership as a means to better the business environment for its members."
Many subcontractors and suppliers believe that the last couple of legislative sessions have left them losing ground in the battle to maintain and advance subcontractor rights. A prime example is House Bill 740 that passed the 75th Legislature and took effective in September 1997. The bill weakened subcontractors and suppliers lien rights. "The bill was a step backward for both subcontractors and suppliers", said Risk. "There is no greater right of subcontractors and suppliers than that of being able to secure a lien to protect payment on a project. Too frequently, payment for labor and materials is held hostage by disputes between the home builder or general contractor and the owner of the property. The ability to place a valid lien using a straightforward, easy to understand procedure is a right that subs and suppliers must protect and enhance."
Besides lien law issues, Risk talked about other issues for subcontractors and suppliers. "While the TCA board has not finalized its legislative agenda, I imagine that it will include topics such as payment, indemnification, lien law reform, bond claims, and retainage. As I meet with the various trades people, these items repeatedly surface as problem areas. Many people do not realize that subcontractors and suppliers are the bankers of the construction industry because payment is so slow. With pay of 45, 60 and 90 days not uncommon, the labor and material provider must find a way to meet payroll and pay the suppliers. This is not the way a project should be financed.
"And contingent payment clauses that so many subcontractors are signing put them in the situation of not being able to stop work or file bond claims," Risk continued. "I’m certain that a lot of subcontractors are not aware of the precarious legal situation they are in. The founders of TCA want to protect the lien and payment rights of subcontractors and suppliers and to expand these rights."
Subcontractors are finding a growing use by owners and general contractors of indemnification clauses in contracts. These clauses require the subcontractors to indemnify the general contractor and owner for accidents on the project. "I don’t know of any subcontractor who minds stepping up and indemnifying someone if the subcontractor is responsible for an accident," said Risk. "However, subcontractors are being contractually required to indemnify others for actions for which the subcontractor has little or no responsibility. This is illogical, unfair, and in the long run it drives up the cost of construction in Texas."
TCA was structured to provide a broad base of input. All of the member organizations have a representative on the board of directors. New member associations can join and also become board members. TCA is also able to serve individual companies that wish to become members and advisory board membership is available to companies and associations.
By providing a vast communications network and by actively involving its membership, TCA hopes to make strides in the Texas lawmaking process. Companies or associations interested in the Texas Construction Association should contact Raymond Risk on 512-473-3773.
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