Chapter 14: 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 material 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 the LG before the arrangement or transaction takes place. The prime contractor must submit to the LG the DBE Joint Check Approval ( Form 2178).

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.
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  • The DBE subcontractor and the prime contractor must keep records of paid invoices and canceled checks as the LG will regularly be requesting them to ensure compliance.
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