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What are our rights and obligations regarding prompt payment as a subcontractor?

FloridaPrompt Payment

Hi all! We are a subcontracting company new to the federal work arena, and we have had some trouble with prompt payment from Primes and Contractors who we subcontract for. What we are also concerned about are our obligations to the materialmen and suppliers used by our company to complete these federal construction jobs. Paying all suppliers, etc., is quite difficult when you aren't being paid a dime by the contractor/prime. Would someone be able to advise us on our rights as well as our obligations to suppliers we use as a subcontractor? We found the associated PPA article you guys published, which was an awesome start. Thank you so much! Audrey J

1 reply

Feb 27, 2020
Hi Audrey!  You're best recourse on federal work is likely the payment bond the Prime has taken out for the project.  Many federal jobs can pay slow to the Prime, which does extend out to the subcontractors and makes it very tough to cash flow the project.  If the Prime has been paid and hasn't paid you according to the contract terms then you should have recourse against the Prime by putting a claim into their bond.  I would recommend calling a meeting with the Prime and just directly asking them and explain the situation you are in when slow payments are made.  Perhaps they have some options to help or can recommend others.  I know a lot of Prime's that do or they may recommend you to a company like ours. Your obligations to your suppliers and subs are to pay them, however the terms of that repayment would fall under the agreements / contract you have with them.  I am happy to help you in any way and I wish you the best of luck.  Please feel free to reach out if you wish.
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