Troubling procurement-related legislation is effectively dead for the year after each failed to advance out of the House Appropriations Committee.
HB 1667 (Kilgore) and SB 1369 (Norment) attempted to amend the Virginia Public Procurement Act to significantly limit the timeframe during which a public body could bring an action on a construction contract or against a surety on a performance bond. Specifically, the bills prohibit legal action on any construction contract unless such action (1) is brought within five years of completion of the work; (2) in the case of latent defects, is brought within five years of discovery of a latent defect but not more than 10 years from completion of the work; or (3) in the case of a warranty in such a construction contract, is brought no more than one year after the expiration of such warranty.
These bills represent a sweeping change to the status quo, and given their effect on the Public Procurement Act, would affect everyone from state agencies, and in particular the Department of General Services (DGS), to institutions of higher education, and from county governments to local school boards.
While SB 1369 initially fared well on the Senate side, the bill met the same fate as HB 1667 on the House side and failed to advance out of the House Appropriations Committee’s General Government and Capital Outlay Subcommittee.
While these two bills have effectively been killed for the year in their legislative forms, the idea will likely survive the 2019 General Assembly session via the budget. The House included in their budget bill language that requires DGS, with oversight from the Joint Legislative Audit and Review Commission (JLARC), to review the statute of limitations policy on state contracts for construction services. Language also requires DGS to consult with governmental bodies and representatives from the private sector construction community. DGS will report its finding and recommendations before the next session so we can address this issue properly.
VACo will continue to monitor this issue and looks forward to participating in the DGS-led study being conducted later this year.
VACo Contacts: Chris McDonald, Esq. and Phyllis Errico, Esq., CAE