Home>Levelset Community>Legal Help>I have 3 ongoing roadway construction projects in the same city state of MA that have been late on may payments. What steps should I take in requesting interest for late payments?

I have 3 ongoing roadway construction projects in the same city state of MA that have been late on may payments. What steps should I take in requesting interest for late payments?

MassachusettsPrompt Payment

I have (3) ongoing roadway construction projects 2017-present in the same city(ch.90 money) in the state of MA that have been late on many pay estimate payments. I have received requests from the consultant engineer to revise some of the pay estimates, ~ 1-month or more after submitting, which caused further delays. I would like to know the best way to submit for this payment and weather a warning /notification letter be submitted first. Our company is from this City and we would like to do this in friendly way. Regards, Jaime, Partner/PM

1 reply

Feb 1, 2019

I'm sorry to hear about your late payments - that can really put stress on a business. First, I think you have the right idea re: a warning or notification being given prior to taking some formal action. Generally, talking out a construction payment problem will be the best option to keep a project going smoothly and to avoid damaging any relationships. Before a warning is given, simply starting a conversation about the issue with the contract administrator or the person in charge of the project from the public entity's side of things might be an even lighter first step, if it could be effective. If a warning does become necessary, referencing the Massachusetts prompt payment laws could help to move things along. Under those laws, progress payments are due within 15 days after receiving an invoice (and 30 days when the project is a state project). In the event that payments are not being made as required by the Massachusetts prompt payment laws, potentially, late penalties (the Federal Reserve Rediscount Rate + 3%) could be applied. Of course, in order to actually obtain those damages, it might require a lawsuit - but, considering the steep penalty involved, a mere threat of making a claim under prompt payment laws might be enough to compel payment, if necessary. But again - filing suit or even merely threatening formal legal action should likely not be the first step when there's a payment hiccup on a project. Talking out the problem will always be a preferable option. For more information on the Massachusetts prompt payment laws, this resource should be valuable: Massachusetts Prompt Payment FAQs.

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