Curiously, if reimbursement money was not made available, would Kiewit’s pay be in jeopardy?
Kiewit is being paid via this line of credit. It is the State of California that is liable for the line of credit. Can you imagine if CA decided not to pay Kiewit, and then Kiewit publicly announces that construction will stop? (I can't imagine this scenario, but it would be the worst PR move -ever... besides the obvious of risking lives by not fixing the spillway).
= = SacBee Article clip:
The $500 million line of credit was arranged through Wells Fargo, despite State Treasurer John Chiangs decision last fall to suspend the big bank from most forms of state business as punishment for a scandal over unauthorized customer accounts. Chiang spokesman Marc Lifsher said the DWR credit deal doesnt violate the treasurers rules.
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I can answer that one authoritatively. Yes, it is - always - until the check clears. First there's the 'slow pay.' The contractor has to meet payroll right now, fuel bills, etc. But the customer drags you for 90 days. Especially so with 'government work.'
Then, the customer decides you've not performed up to spec and decides to keep the 10 or 15 percent final payment.
So one of you or the other goes to court, and what does that do to the prospect of timely payment? And, as a contractor, what does it to to your reputation if it gets around that you sue your customers?
With DWR, we've already established they lie and try to hide what's going on. In other words, they ain't honest people. Do you think they would hesitate to stiff the contractor?