Alaska Prompt Payment Overview

Alaska’s prompt payment statute covers public projects, but does not provide rules for prompt payment on private construction projects.

Alaska Prompt Payment for Public Projects FAQs

Alaska’s prompt payment statutes set forth specific timeframes for when general contractors, subcontractors, suppliers, and others involved with a public construction project must be paid. This page provides an overview of these regulations and addresses frequently asked questions related to the Alaska prompt payment laws.

Prompt Payment Frequently Asked Questions

Do I Have To Send A Letter or File Anything To Qualify For Prompt Payment Penalties or Remedies in Alaska?

In order to qualify for remedies under Alaska prompt payment laws, the contract must be satisfactorily performed, and payment must have been requested.

Can I Include Prompt Payment Fees In My Alaska Mechanics Liens Claim or Bond Claim?

No. Alaska law does not allow for the recovery of miscellaneous amounts in a bond claim.

If I am paid late according to prompt payment statutes, can I obtain interest or other penalty payments?

If payment is received late, and none of the valid reasons for late or withheld payment apply, the party to be paid is entitled to recover the interest allowed by law. As a practical matter, it may be difficult to recover amounts in excess of the contractually due amount without filing suit.

Are there reasons for which payment may be withheld past the general deadline?

If payment is received late, and none of the valid reasons for late or withheld payment apply, the party to be paid is entitled to recover the interest allowed by law. As a practical matter, it may be difficult to recover amounts in excess of the contractually due amount without filing suit.

Alaska Prompt Payment Statutes

Getting informed about prompt payment laws is important. An examination of Alaska’s prompt payment laws, the rules and regulations related to payment timing, is important to know your rights and responsibilities as a party on a construction project. Alaska’s specific laws can be found in: Alaska Stat. §§ 36.90.200 – 36.90.290 and are reproduced below.

Prompt Payment Statute on Private Projects

N/A

Alabama does not a provide prompt payment statute for provate projects.

Prompt Payment Statute on Public Projects

36-90-200: Payment Deadline and Interest

a) The state or a political subdivision of the state shall pay the prime contractor for satisfactory performance on a public construction or public works contract within 30 calendar days of the date the state or political subdivision receives a payment request from the prime contractor that complies with the contract. If a political subdivision is going to use grant money for the contract, the subdivision shall pay the prime contractor for satisfactory performance within 21 calendar days of the date the subdivision receives a payment request that complies with the contract or within 21 calendar days of the date the subdivision actually receives the grant money, whichever is later. If the state is going to use federal money for the contract, the state shall pay the prime contractor for satisfactory performance within 21 calendar days of the date the state receives a payment request that complies with the contract or within 21 calendar days of the date the state actually receives the federal money, whichever is later.

(b) If the prime contractor is not paid as required by (a) of this section, the state or political subdivision shall pay interest on the unpaid amount of the required payment from the 21st calendar day after the date required for payment under (a) of this section at an interest rate that is equal to the amount set out in AS 45.45.010(a).

(c) If part or all of a payment is going to be withheld for unsatisfactory performance or if the payment request made under (a) of this section does not comply with the requirements of the contract, within eight working days after receipt of the payment request the state or political subdivision shall notify the prime contractor in writing stating specifically why part or all of the payment is being withheld and what remedial actions may be taken by the prime contractor to receive the full payment.

(d) If the notification by the state or political subdivision required by (c) of this section does not comply with (c) of this section, the state or political subdivision shall pay interest on the withheld amount from the eighth working day after receipt of the initial payment request until the state or political subdivision provides notice that does comply with (c) of this section.

(e) If part or all of a payment is withheld under (c) of this section, the state or political subdivision shall pay the withheld amount within 21 calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice. If a political subdivision is going to use grant money for the contract, the subdivision shall pay the prime contractor within 21 calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice or within 21 calendar days after the political subdivision actually receives the grant money, whichever is later. If the state is going to use federal money for the contract, the state shall pay the prime contractor within 21 calendar days after the prime contractor satisfactorily completes the remedial actions identified in the notice, or within 21 calendar days after the subdivision actually receives the money, whichever is later. If the withheld amount is not paid within the 21 calendar days, the state or political subdivision shall pay interest on the withheld amount from the 21st calendar day at an interest rate that is equal to the amount set out in AS 45.45.010(a).

(f) The obligation to pay interest under this section does not apply to retainage.

(g) This section does not apply to public construction or public works contracts made by a political subdivision that has a population under 800.

36-90-210: Required Contractual Terms

(a) The prime contractor and a subcontractor on a public construction or public works contract shall include in a subcontract between the prime contractor and subcontractor for the public construction or public works a clause that requires the prime contractor to pay

(1) the subcontractor for satisfactory performance under the subcontract within eight working days after receiving payment from which the subcontractor is to be paid;
(2) the subcontractor all retainage due under the subcontract within eight working days after final payment is received from the state or political subdivision or after the notice period under AS 36.25.020 (b) expires, whichever is later;
(3) the subcontractor interest on an amount that is not paid in accordance with (1) of this subsection for the period beginning on the day after the required payment date and ending on the day on which payment of the amount due is made: the interest shall be computed at an interest rate that is equal to the amount set out in AS 45.45.010 (a);
(4) interest on retainage withheld from the subcontractor at an interest rate that is equal to the amount set out in AS 45.45.010 (a).

(b) A subcontractor on a public construction or public works contract shall include in each subcontract under which a person agrees to provide the subcontractor with services, other than as an employee, or supplies to be used in the public construction or public works project a clause that requires the subcontractor to pay

(1) the person for satisfactory performance under the subcontract within eight working days after receiving payment from which the person is to be paid;
(2) the person all retainage due under the subcontract with the person within eight working days after the subcontractor receives its share of the state-held retainage from the prime contractor or another subcontractor;
(3) the person interest on an amount that is not paid in accordance with (1) of this subsection for the period beginning on the day after the required payment date and ending on the day on which payment of the amount due is made: the interest shall be computed at an interest rate that is equal to the amount set out in AS 45.45.010 (a);
(4) interest on retainage withheld from the person at an interest rate that is equal to the amount set out in AS 45.45.010 (a).
36.90.220: Optional Contractual Terms

Notwithstanding AS 36.90.210 and 36.90.230, the prime contractor or a subcontractor may negotiate and include in a public construction or public works subcontract a provision that permits

(1) the prime contractor or a subcontractor to determine that part or all of a subcontractor’s request for payment may be withheld for unsatisfactory performance under the subcontract; and
(2) the prime contractor or a subcontractor to withhold payment for unsatisfactory performance without incurring an obligation to pay interest for late payment, if a notice complying with AS 36.90.240 has been previously furnished to the subcontractor and a copy of the notice is furnished to the contracting officer of the state or political subdivision.
36.90.230: Withholding Payment For Unsatisfactory Performance

(a) If the prime contractor on a public construction or public works contract, after making a request for payment to the state or political subdivision but before paying a subcontractor for the subcontractor’s performance covered by the payment request, discovers that part or all of the payment otherwise due to the subcontractor is subject to withholding from the subcontractor under the subcontract for unsatisfactory performance, the prime contractor may withhold the amount as allowed under the subcontract. If the prime contractor withholds an amount under this subsection, the prime contractor shall

(1) give the subcontractor a notice complying with AS 36.90.240 as soon as practicable after determining the cause for the withholding but before the due date for the subcontractor payment;
(2) give the contracting officer of the state or political subdivision a copy of the notice furnished to the subcontractor under (1) of this subsection:
(3) pay the subcontractor within eight working days after correction of the identified subcontractor performance deficiency.

(b) If the prime contractor does not comply with the notice and payment requirements of (a) of this section, the contractor shall pay the subcontractor interest on the withheld amount from the eighth working day at an interest rate that is equal to the amount set out in AS 45.45.010(a).

 

36.90.240: Form of Certain Notices

A notice under AS 36.90.220(2) or 36.90.230(a)(1) must be in writing and must state the amount being withheld, the specific causes for the withholding under the terms of the subcontract, and the remedial actions to be taken by the subcontractor to receive payment of the amount withheld.

36.90.250: Retainage

(a) The state or a political subdivision of the state shall pay to the prime contractor interest on retainage, including warranty retainage, on a contract for public construction or public works at an interest rate that is equal to the amount set out in AS 45.45.010(a). Interest on retainage accrues from the date of approval of a pay request until the date of payment to the contractor.

(b) A political subdivision that has a population of 500 or less is exempt from the payment of interest under (a) of this section.

36.90.260: Miscellaneous Provisions

a) In AS 36.90.210 – 36.90.290,

(1) a payment is considered to be made when mailed or personally delivered to the party being paid;

(2) a payment is considered to be received when it is endorsed for payment, if it is a check;

(3) an invoice is considered to be received when it is date-stamped or otherwise marked as delivered: if the invoice is not date-stamped or otherwise marked as delivered, the date of the invoice is considered to be the date when the invoice is received.

(b) A political subdivision that receives a state grant for a public construction or public works project may use money from the state grant to pay the interest under AS 36.90.200 – 36.90.290.

36.90.265: Applicability to Political Subdivisions

AS 36.90.200 – 36.90.290 apply to a public construction or public works contract of a political subdivision if the political subdivision has entered into a written contract with the state for the state to provide funds for the public construction or public work.

36.90.270: Waiver of Provisions Prohibited

A contract provision that waives a provision required by AS 36.90.200 – 36.90.290 is void.

36.90.290: Definitions

In AS 36.90.200 – 36.90.290,

(1) “prime contractor” means a person required to be registered as a contractor under AS 08.18 who has a contract with the state or a political subdivision of the state to provide materials or services, other than as an employee, for a public construction or public works project;

(2) “subcontractor” means a person at any level, other than a prime contractor, who provides materials or services, other than as an employee, to be used in a public construction or public works project;

(3) “working day” does not include a Saturday, Sunday, or a state holiday.