Reed Smith Client Alerts

The 2018 Pennsylvania legislative term may bring about significant changes to the Pennsylvania Contractor and Subcontractor Payment Act (CASPA). Two bills currently pending in the Pennsylvania House of Representatives and Senate may expand CASPA’s protections and affect the rights of parties involved in payment disputes over construction projects.

Authors: Ericson P. Kimbel Jorge Rojas

Type: Client Alerts

In 1994, the Pennsylvania legislature passed the Contractor and Subcontractor Payment Act (CASPA) with the intent to offer protections to contractors and subcontractors against payment delays in connection with construction projects. However, despite CASPA’s protective nature, many believe that CASPA lacks the enforcement tools to fully protect parties from whom payments are being withheld. On May 18, 2017, a group of legislators led by Rep. David S. Maloney from Berks County, introduced House Bill 1387 (HB 1387) to add additional protections to CASPA. Specifically, HB 1387 seeks to add the following provisions:

  • A contractor or subcontractor may not contractually waive CASPA rights.
  • Parties must provide written notice of a deficiency item within seven (7) calendar days upon receipt of an invoice, or risk waiving the right to withhold payment for the deficiency, thereby requiring payment of the invoice in full.
  • If withholding for a deficiency item, payment for all non-deficient work must still be timely made.