Section 3: Prompt PaymentAnchor: #b110013
Pay the Contractor no earlier than 10 calendar days or no later than 30 calendar days following the month in which work was completed and accepted.
The Contractor must pay any retainage on subcontractor work within 10 calendar days after satisfactory completion of all the subcontractor's work. Satisfactory completion is accomplished when:
- the subcontractor has fulfilled the Contract requirements of both the Department and the subcontract for the subcontracted work, including the submission of all information required by the specifications and the Department and
- the Department has inspected and approved the subcontractor's work, and the final quantities of the subcontractor's work hours have been determined and agreed upon.
Under certain instances, state and federal regulations do not prohibit the Contractor from withholding retainage from a subcontractor. Contact the Construction Division, Field Engineering Branch (CST/FE), for more information.Anchor: #b110016
Determine if payment has been made for the work in question. If payment has been made, notify the Contractor. Ensure that the Contractor receives the notice prior to the 20th calendar day from the date of the Contractor's written notice.
If payment has not been made and there is no dispute concerning the work involved, pay the Contractor as soon as possible but no later than the 20th calendar day from the date of the prime Contractor's written notice.
If payment has not been made due to a dispute of the work, notify the prime Contractor that a bona fide dispute exists and include the specific reasons for nonpayment. Ensure that the Contractor receives the notice prior to the 20th calendar day from the date of the Contractor's written notice. Provide the Contractor with a reasonable opportunity to cure areas of noncompliance or offer reasonable compensation for areas where noncompliance cannot be achieved in accordance with the Contract. Do not waive the Contractor's responsibility to comply with the Contract.Anchor: #b110017
Subcontractor and Material Supplier Complaints
Ensure subcontractors submit all complaints in writing. The complaint should identify specifics regarding the subcontract language, items of work in question, and the subcontractor's attempts to obtain payment from the prime Contractor. Notify the subcontractor that the complaint will not be accepted until the subcontractor provides satisfactory written evidence they have contacted the prime Contractor and its payment bond surety in an attempt to resolve the issue. (See sample letter.)
If a complaint is accepted, follow the procedures outlined below.
Verify the Department has approved the work in question.
Second tier subcontractor complaints should be forwarded to and addressed by the prime Contractor, with a copy of the prime Contractor's notice sent to the payment bond surety.
Ensure the prime Contractor and subcontractor receive the notices associated with prompt payment prior to the 20th calendar day from the date of the subcontractor's written notice of complaint.
1. No further Department action necessary related to prompt payment.
For federal-aid projects, obtain a completed Form 2177, "Prompt Payment Certification," from the Contractor. State-funded projects do not require Form 2177.
The prime Contractor must submit a certification form monthly during the course of the project and the month following final acceptance. Initiate the following actions for receipt and review of the required certification form.
- Verify the form is received by the due date and any payments withheld are based on a dispute.
- If payment is withheld without a stated dispute or the
prime Contractor fails to provide the monthly or final certifications:
- Contact the prime Contractor with a reminder of its contractual obligation.
- When required, escalate the issue. Escalated actions may include suspending work, withholding all or a portion of an estimate, withholding project acceptance, placing Contractor in default for breach of Contract, or other actions deemed appropriate