Washington DC Prompt Payment Requirements
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For Prime (General) Contractors, payment due within 15 days from occupancy permit, owner possession, or receipt of invoice; whichever is earlier.
For Subcontractors, payment due within 7 days of payment received from above.
For Suppliers, payment due within 7 days of payment received from above.
Interest & Fees
Interest at 1.5% month. Attorneys' fees awarded to prevailing party.
For Prime (General) Contractors, payment due within the later of 30 days from invoice or 30 days from receipt of services.
For Subcontractors, payment due within 10 days of payment received from above.
For Suppliers, payment due within 10 days of payment received from above.
Interest & Fees
Interest at 1% month for prime; interest at statutory rate for subs. Attorneys' fees awarded to prevailing party.
Prompt payment laws are a set of rules that regulate the acceptable amount of time in which payments must be made to contractors and subs. This is to ensure that everyone on a construction project is paid in a timely fashion. These statutes provide a framework for the timing of payments to ensure cash flow and working capital.
Projects Covered by Prompt Payment in Washington DC
Washington DC’s prompt payment provisions are split into two sections, covering both private and public projects. These statutes govern the timing of all payments on construction projects, and impose penalties for late payment in the form of interest.
Payments on private projects in Washington DC are governed by D.C. Code §27-131 to 136.
Payment Deadlines on Private Projects
Payments from the property owner to the prime contractor must be made within 15 days of either the issuance of an occupancy permit, possession of the improvement by the owner, or the date the request for payment is received; whichever is earliest. For all other payments down the payment chain, once the higher-tiered party receives payment, they must pay the lower tier project participants within 7 days.
Penalties for Late Payment
Any late or wrongfully withheld undisputed payment will be subject to interest penalties. Interest will accrue at a rate of 1.5% our month until the debt is paid. If the dispute results in a civil action, the prevailing party will be awarded costs and disbursements, along with reasonable attorney fees.
All payments on DC public works projects are governed by D.C. Code §§2-221.01 to 2-221.06.
Payment Deadlines for Public Projects
A prime contractor on a public works project must be paid within 30 days (excluding legal holidays) of receipt of a proper request for payment, unless the contract between the parties states otherwise. All other payments on the project must be made to the lower-tiered participant within 7 days of the higher-tiered party’s receipt of payment.
Penalties for Late Payment on Public Projects
Any payments that are late or wrongfully withheld on a public works project in DC will accrue interest at a rate of 1.5% per month. This interest is compounded monthly, meaning at the end of each delinquent month the interest accrued will be added to the principal and begin accruing interest on the increased amount the following month.