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Peo Could Not Recover Against Payment Bond Bonds-payment; Subcontractors

Tuesday, February 03, 2004 11:57 am

Peo Could Not Recover Against Payment Bond Bonds-payment; Subcontractors

A California court has ruled that a professional employer organization (PEO) could not recover against a payment bond. The PEO primarily advanced funds to cover payroll; it did not furnish labor to the project.

The City of San Diego awarded a contract to Kiewit Pacific Company for construction of a water reclamation plant. Kiewit furnished a payment bond issued by Travelers Casualty and Surety Co. Kiewit subcontracted the masonry work to Garcia Construction Co. Garcia then entered into a contract with Onceblue Enterprises, Inc., doing business as Personnel Leasing.

Personnel Leasing offered two packages of services [...]

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