Preventing Contractor-Subcontractor Payment Disputes

Subcontractors will frequently ask public agencies what they can do to get paid by a contractor. While this is a contractual relationship between the subcontractor and contractor that the public agency can't directly impact, there are a number of fairly basic steps that a subcontractor can take that may help in getting paid. The following suggestions may be helpful for public agencies in advising subcontractors of how to approach a payment dispute.

1. Research the contractor. To the extent that a subcontractor of any tier chooses to work for a contractor with a poor reputation and history of paying subcontractors, this may negatively impact the subcontractor's financial viability. Therefore, subcontractors should research contractors before choosing to work for them. In addition to checking references of the contractor (talking with other subcontractors who have worked for them), a subcontractor could research the whether the contractor meets the bidder responsibility criteria that public agencies are required to research prior to awarding a public works project. I have set up a webpage on the Resources link of my website that lists the websites of different agencies that have information about contractors (the mandatory bidder responsibility criteria required by RCW 39.04.350).
   
   
2. Written Contract. A subcontractor should ensure they have a clear, written contract or agreement with the contractor about the scope of work, the schedule, and what the contractor will pay.
   
   
3. Invoice. A subcontractor should provide a timely, clear, and written invoice to the contractor when services or a portion of services are complete and the subcontractor is due for payment.
   
   
4. Talk. A subcontractor and contractor should attempt to resolve any payment or performance dispute by talking opening about the issues. It is best when there is open communication early on in the progress of the work and that such communication continues on a regular basis.
   
   
5. Joint Check. Some public agencies will, upon request of a subcontractor and with the written concurrence of the contractor, issue a joint check payable to the contractor and subcontractor. This is sometimes a helpful step, especially when the subcontractor does not trust the contractor.