Engineers and contractors could end up holding the bag if the finances of state and local governments continue to deteriorate, risk experts warn.Government clients can be especially hard to collect from because they are unlikely to place money in escrow accounts. Private-sector protective measures, such as filing a pre-lien against assets, may not apply to public owners. Yet contractors and prime consultants may remain liable for paying subcontractors, consultants and suppliers.That was the grim assessment at the American Council of Engineering Companies' Oct. 19-22 fall conference in Las Vegas, where a panel explored ways of safeguarding against deadbeat government clients.
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.