Chapter 15: Joint Checks

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Section 1: Joint Check Process

A joint check is a two-party check between a DBE subcontractor and a prime contractor to submit to a materials supplier of the DBE. The prime contractor issues a check as payer to the DBE subcontractor and the materials supplier jointly to guarantee payment to the supplier for the materials or supplies used by the DBE subcontractor.

Any joint check arrangement must be pre-approved by TxDOT before the arrangement or transaction takes place. The prime contractor should submit the Joint Check Approval Form 2178 to the District.

Prime contractors need to attach:

The use of joint checks for payment of materials or supplies is acceptable when the following conditions are met:

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  • The prime contractor issuing the check acts solely as guarantor.
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  • The DBE subcontractor must release the check to the supplier.
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  • The DBE subcontractor (not the prime contractor) negotiates the quantities, price and delivery of materials.
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  • The DBE subcontractor is responsible for both furnishing and installing the materials or supplies.
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  • The prime contractor cannot require the subcontractor to use a specific supplier or the prime contractor’s negotiated price.
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  • The arrangement is short-term with the purpose being the DBE subcontractor’s establishment or increase of a credit line with the material supplier.

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.

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