Proposed California Legislation to Waive Payment Bonds on Small Los Angeles Unified School District Projects

A California Senate Bill proposes a new approach for the Los Angeles Unified School District to manage projects of less than $1 million in value. The proposed legislation would waive the payment bond requirement for public work contracts with small businesses or microbusinesses on Los Angeles Unified School District projects of less than $1 million. Instead, small businesses and microbusinesses would be required to enroll in a proposed self-insurance program run by the Los Angeles Unified School District. Bonds are an important security mechanism for subcontractors and suppliers to public construction projects and therefore this legislation should be of great concern to all subcontractors and suppliers who work on public work projects in California. The American Subcontractors Association has notified the L.A. School District of its opposition to the proposed legislation.

Attorney Michael J. DuPont