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Contract issue with GC on federal project

VirginiaPayment Disputes

We are a subcontractor on a large federal project. Contract value is $450k. We are now over 90% complete and the GC has rejected our latest pay app saying they only owe us $5k of the $44k that we billed. They have revised our SOV, which has been used in all 15 previous pay apps, to include a line item for punch list that did not exist and have taken 5% of the entire contract an added it to that line. This includes all the work in place from the entire project. They also have now rejected some of our change orders. These were never added to our contract value even though we have requested this for over a year. We have emails with them approving the cost and stating they will be issued as a CO. We have added these to the SOV and have been paid for them, but now they are removing those dollars from us which now takes pretty much all remaining money from us to be able to continue to bill. They have also now contacted our tier sub and offered to hire them direct to complete the project. Is any of this legal?

1 reply

Mar 31, 2020
GC's can't pick and choose what bills they want to pay, and they certainly aren't entitled to go to past pay apps or invoices to try and edit things or unapprove items. And, when this is done on a federal project, the contractor could find themselves with even more legal trouble than usual with the False Claims Act in play. With that being said, this sounds eerily similar to another question recently posted, and I think this may have been a double post. Even if not, I think this recent Q&A will be useful to you regarding how to speed up payments and what claims may be on the table: Rights as a sub when a GC doesn’t pay amongst other issues.
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