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Section 2: Use of Joint Checks to Guarantee Payment for Materials and Supplies

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LG Responsibilities

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.
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  • Documentation of DBE subcontractor applying for credit with the material supplier.
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  • 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.
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  • The DBE subcontractor is more than an extra participant in releasing the check to the material 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 prime contractor issuing the check acts solely as guarantor.
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  • The DBE subcontractor releases the check to the supplier.
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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 is responsible for both furnishing and installing the material/work item.
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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.

Step 3: Complete the DBE Joint Check Approval (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.

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.

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