Section 2: Use of Joint Checks to Guarantee Payment for Materials and SuppliesAnchor: #i999352
Step 1: Review DBE Joint Check Approval Form 2178 and supporting documentation:
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- DBE’s written request to the prime contractor for the use of a joint check agreement. Anchor: #i998930
- Documentation of DBE subcontractor applying for credit with the material supplier. Anchor: #i998934
- Material supplier’s response to DBE subcontractor denying credit.
Step 2: Verify or ensure the following:
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- The prime contractor has not required the subcontractor to use a specific supplier or the prime contractor’s negotiated unit price. Anchor: #i998942
- The DBE subcontractor is more than an extra participant in releasing the check to the material supplier. Anchor: #i998946
- The DBE subcontractor (not the prime contractor) negotiates the quantities, price and delivery of materials. Anchor: #i998950
- The prime contractor issuing the check acts solely as guarantor. Anchor: #i998954
- The DBE subcontractor releases the check to the supplier. Anchor: #i998958
- The arrangement is short-term with the purpose being the DBE subcontractor’s establishment or increase of a credit line with the material supplier. Anchor: #i998962
- The DBE subcontractor is responsible for both furnishing and installing the material/work item. Anchor: #i998966
- The DBE subcontractor and the prime contractor must keep records of paid invoices and canceled checks as TxDOT will regularly be requesting them to ensure compliance.
Step 3: Complete Form 2178 approving or denying joint check arrangement.
Step 4: Respond in writing to prime contractor, with a copy to the DBE subcontractor, approving or denying joint check arrangement. (See Appendix A, Section 3 for sample letters)
Step 5: Periodically monitor the use of joint checks.
Step 6: Request a copy of cancelled checks for the months the contractor issued a joint check to each DBE with an approved DBE Joint Check Approval.
Step 7: Ensure allowable goal credit begins the date the joint check request is approved.