Specialty Trade Associations Council (STAC)

The ASAC coordinates the activities of the STAC (Specialty Trade Associations Council).  STAC  is a group of independent trade associations:

• American Subcontractors Association of the Carolinas

• American Fire Sprinkler Association of the Carolinas

• Carolinas Roofing & Sheet Metal Contractors Association

• Mechanical Contractors Association of SC

• Metrolina Wall & Ceiling Association

• NC Association of Electrical Contractors

• NC Heating & AC Contractors Association

• Painting & Decorating Contractors of America

• Steel Erectors Association of America

• Waterproofing Contractors Association Inc.

Chair:  Tommy Parker, Parker Marine Contracting, Charleston, SC

Vice Chair NC:  Robert Roberson, David Allen Company, Raleigh, NC

Vice Chair SC:  Timmy McLaughlin, Austin Construction, Summerville SC

Secretary/Treasurer:  Linda Burkett, ASAC

Asst. Treasurer:  Dottie Nagle, CRSMCA

The purpose of STAC is to identify problem areas within the industry which might properly be affected by legislative or political action and to pursue such action for the common betterment of its members.

The implementation of the above purpose is pursued through voluntary action of individual member associations, as well as through lobbyists, acting on behalf of the member associations, in accordance with accepted procedural guidelines.  Such actions may consist of the following:

1. Investigation and research directed towards the development of legislation and governmental programs.

2. Education of legislators, public officials and political candidates about specialty contractor problems.

3. Direct communication with legislative, governmental and quasi governmental officials at any level of government.  

4. Influencing the electoral and political appointment process through education, and by making recommendations to its individual members regarding campaign activities and political contributions.  

5. Education of specialty contractors about legislation and the political process.  

6. Coordination with other industry groups regarding legislation and political affairs.  

7. Filing a friend-of-court briefs and similar court documents toward the end of achieving favorable court decisions.

Following is a summary of some of the more important statutory enactments and changes which STAC, with the help of other associations, has spearheaded in SOUTH CAROLINA.

RETAINAGE REFORM - SC 365 - Amended existing section of SC Consolidated Procurement Code regarding withholding of retainage on state construction contracts  and subcontracts from 5% to 3.5%.

BID LISTING ON STATE WORK (SC Code 11-35-3020 (2) (b)) - The subcontractors successfully lobbied a major package of protections in connection with the passage of the Consolidated Procurement Code in 1981.  The most important was bid listing.  A prime contractor on state work is required to list each subcontractor who will perform work of a value over three percent of the estimated cost of construction as determined by the project architect.  The contracting agency will identify by specialty, in the bid documents, the subcontractors required to be listed.  

ELIMINATION OF RETENTION ON STATE WORK (SC Code 11-35-3030 (4)) - Also in context of the Procurement Code, retention reform was achieved.  Retention on state work is limited to 5% and must be released on a line-item basis.  A prime contractor must promptly pass such released retention on to his subcontractors.  

STATE DISPUTE PROCEDURES AVAILABLE TO SUBCONTRACTORS/SUPPLIERS (SC Code 11-35-4210 (1)) - Under the SC Procurement Code, a subcontractor/supplier who is “aggrieved in connection with a bid award of solicitation,” may lodge a bid protect.  In addition, a subcontractor/supplier may apply to the Chief Procurement Officer for Construction (State Engineer) for “resolution of a contract controversy,” when the applicant is the “real party in interest.”  These provisions are unique to South Carolina.  

INTEREST AND ATTORNEY’S FEES RECOVERABLE WHERE PAYMENT CLAIM UNREASONABLY DENIED (SC Code 27-1-15)) - STAC successfully achieved the passage in 1986 of a statute of inestimable significance.  A subcontractor or supplier who places by certified mail a claim for payment for services or materials incorporated into the work, may recover interest and attorney’s fees if the claim is not properly investigated, and, if valid, paid within 45 days of the demand.  

CONTRACT CLAUSES TRANSPORTING DISPUTES BEYOND STATE BOUNDARIES FOR RESOLUTION ARE UNENFORCEABLE SC Code 15-48-10 et seq.) - Many of the subcontract forms commonly used in South Carolina by out-of-state general contractors require that the subcontractor go back to the general contractor's home state to resolve a payment dispute.  Under a statute introduced through the efforts of STAC in the late 80’s, such clauses are no longer enforceable, and subcontractors may sue or seek arbitration as otherwise provided by South Carolina law and the Rules of Arbitration.  

LIENS OF SUBCONTRACTORS AND SUPPLIERS ON CONTRACT PRICE (SC Code 29-7-10 et seq.) - At the instance of the subcontracting industry working through STAC, this statute was amended in 1991 to provide that a prime contractor may not withhold funds from a subcontractor on one project for alleged deficiencies on another project.  To withhold money on the same project, the prime contractor must declare such withholding in its payment application to the owner and provide a copy to the affected subcontractor.  The fines chargeable for diversion of money from a construction job were increased.  Importantly, the amendment rendered lien waivers unenforceable except to the extent of payments actually made.  

MECHANIC’S LIENS (SC Code 29-5-10 et seq.) -In the early 90’s, the AGC filed an amendment to the Mechanics Lien Statute which would practically destroyed the lien rights of lower-tier subcontractors and suppliers.  The subcontractors came forward and extensive hearings and negotiations took place resulting in the institution of a system where a lower tier provider perpetuates its lien rights by sending to the general contractor a notice of furnishing of labor and materials.  

THE SOUTH CAROLINA PROMPT PAY ACT (SC Code 29-6-10 et seq.) - STAC fought the AGC over prompt pay in North Carolina for five years.  When the same bill was introduced in this state, the AGC decided to cooperate and a joint effort produced a statute helpful to the entire industry.  This law requires prompt payment to contractors, subcontractors and suppliers, and provides for interest penalties when payment is delayed.  The general contractor must pay the subcontractor within seven days from the time the general contractor receives payment from the owner.  The subcontractors and suppliers within seven days of receipt by the subcontractor of those funds.  

THE SUBCONTRACTOR SUPPLIER’S PAYMENT PROTECTION ACT - “The Subcontractors and Suppliers Payment Protection Act” was ratified in May of 2000.  The Act renders pay-if-paid provisions unenforceable, requires that payment bonds be used on all public projects in South Carolina, and prohibits the issuance of payment bonds in South Carolina by other than licensed insurance companies with a minimum Best rating of A- or B+ depending on the circumstances.  Moreover, no subcontract clause will henceforth be enforceable which neutralizes any form of payment protection created by statute or imposed by the project owner.  

Provided by: Daniel T. Brailsford, Esq. of the Columbia South Carolina law firm of Robinson, McFadden and Moore.  Mr. Brailsford  has been active in construction law for twenty years, representing the Subcontractors, Materialmen, and Equipment Systems subcommittee of the ABA Forum on Construction.  He is General Counsel to the American Subcontractors Association of the Carolinas and the Mechanical Contractors Association of South Carolina and serves as legislative counsel to STAC.  He can be reached at 803 -227-1107 or by e-mail at dan@robinsonlaw.com.