Expanding into Evergreen Territory

With a celebration and networking gathering at Trenchers in Seattle, ASA’s newest chapter got off to an energetic start. The American Subcontractors Association promotes and protects the rights and interests of subcontractors and suppliers by building strength in the community through education, legislation, networking and professional growth. And now we’re doing it in Washington! Thanks to Rob Scott of Scott Coatings for stepping up as President of this chapter. But he’s got lots of support from around the state: ASA members from Division 9 Flooring, Holmberg Mechanical, Patriot Fire Protection, ST Fabrication, Corona Steel, and DTG Recycle are all making sure this chapter gets the foundation it needs to grow!

ASA’s new Washington chapter was instrumental in sending a support letter to the House and Senate Labor Committees in Washington regarding legislation (HB 1524/SB 5528) that would extend the 5% retainage cap for all public construction projects to private construction projects, along with extending the use of retainage bonds in lieu of retainage for all public construction projects to all private construction projects.

Retainage is often 10-15% for a construction project and this high retainage limits a subcontractor’s ability to take on new projects, pay high wages to current employees, hire new employees, buy equipment and maintain cash flow. High retainage means subcontractors must often borrow money for operating costs and it gives general contractors significant negotiating leverage over subcontractors. Fair retainage and the ability to bond helps smaller subcontractors and women-and-minority- owned subcontractors better compete for projectsand grow their businesses.

Senate Bill 5528 passed a concurrence vote in the state Senate in April, 48-0 with one Senator being excused. The bill will take effect 90 days from the end of the session, which was April 23rd. So, July 23rd will be the effective date. The legislation will extend the 5% retainage cap for all public construction projects to private construction projects, along with extending the use of retainage bonds in lieu of retainage for all public construction projects to all private construction projects.

Bonding provides subcontractors with improved cash flow, the ability to compete for additional contracts and more high-wage jobs. In other states, fair retainage caps and bonding have lowered construction costs (about 1-1.5% cost reduction based on a decrease in retainage from a 10% to a 5% cap). 14 other states have instituted similar 5% (or less) caps on retainage for private contracts. Last year, Colorado accomplished this legislative endeavor and our ASA Chapter in that state championed it.

The U.S. Small Business Administration (SBA) 2023

8(a) Graduate of the Year is Jesse Cherian, president and CEO of Jabez Holdings Inc (dba ST Fabrication) in Orting, Washington. ST Fabrication is a structural and miscellaneous steel fabricator providing steel for projects across the Pacific Northwest Region.