K. Claims Against Governmental Entities

• Library: SC Construction Law Desk Book (SCBar) (2013 Ed.)

K. Claims Against Governmental Entities

In the event of non-payment, subcontractors and suppliers have access to payment bond claims as well as more traditional claims for breach of contract. In addition to those claims, on certain public projects, subcontractors and suppliers may also have a claim against the contracting government entity if a required payment bond was not properly procured or maintained. In Sloan Construction Co. v. Southco Grassing, Inc.,¹⁷³ the Court allowed a subcontractor to sue the South Carolina Department of Transportation after it was unable to obtain payment from Southco on a state highway maintenance project. There, SCDOT hired Southco as the general contractor, and Southco provided SCDOT with proof of a payment bond pursuant to S.C. Code Ann. § 29-6-250. Southco subcontracted with Sloan Construction Company to perform asphalt paving. While the work was still being performed, however, Southco's payment bond was cancelled due to the insolvency of the bond's issuer. SCDOT wrote Southco requesting proof of a replacement bond, but Southco never responded. In the meantime, Sloan completed its portion of the paving subcontract.

As the project neared completion, Southco notified SCDOT that it had made all payments on the...