how do we ensure prompt timely payments on a T&M job

3 weeks ago

we’re a sub contractor, (Electrical) that just took on a large union project that is being billed out at T&M. How do we insure prompt timely payments? Can we request a payment bond be posted?

Attorney Vaughan Baio & Partners
4 reviews

You are touching on a few different issues. If you are doing projects on a time and materials basis, either the work tickets themselves should contain information about when payment is due, or you should have been asked to sign some sort of master service agreement in which your parent contractor agreed to pay you within [X] days of signing the work authorization.

If it’s a public project there is likley payment/performance bonds already required. If so, you should be able to get a copies of the payment bond. If warranted, you could file a claim against the payment bond, but sureties (the companies that issue the bonds) are allowed a reasonable amount of time to review any claims, so I would not expect payment to be issued promptly.

If it’s a public job in NJ, you could not techincally lien the property under the Construction Lien Law, but you could potentially file a lien againts the public entity under the Municipal Mechanics’ Lien Law (NJSA 2A:44-125).   

Finally, any contractor or subcontractor is entitled to protection under New Jersey’s Prompt Payment Act. That’s a great statute for contractors to use because, if there claims are successful, it allows them to be reimbursed for attroneys’ fees and legal costs incurred, plus interest on imprperly withheld sums. Of course, whether or not you could use the Prompt Payment Act to sue would depend on the terms of your contract.

You may want to discuss this with an appropriately qualified construction attorney if the current debt is more than you can handle. If it is not bad yet, my general advice to contractor’s is common sense: do not let that debt grow to such a larger number that you can no longer afford to walk away. Good luck.   

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