GETTING PAID AS A CALIFORNIA PUBLIC WORKS CONTRACTOR

I devote significant time consulting with contractors on business process hiccoughs from branding to invoicing to new business. One hiccough that presents regularly is getting paid by public agencies. I met recently with JHOG Design and Construction co-owner Sandra Choi and the topic resurfaced. This is a follow-up to that conversation.

There exists a statute designed to keep awarding bodies compliant with California Public Contract Code requirements related to paying construction contractors on time: PCC §20104.50 (California Code, PCC 20104.50.), and assists in managing their risk attendant to non-compliance: California Code of Civil Procedure §685.010(a) (California Code, CCP 685.010).

An awarding body has the first seven days after receiving your invoice to reject it. See PCC 20104.50 © below:

“Upon receipt of a payment request, each local agency shall act in accordance with both of the following:

1. Each payment request shall be reviewed by the local agency as soon as practicable after receipt for the purpose of determining that the payment request is a proper payment request.

2. Any payment request determined not to be a proper payment request suitable for payment shall be returned to the contractor as soon as practicable, but not later than seven days, after receipt. A request returned pursuant to this paragraph shall be accompanied by a document setting forth in writing the reasons why the payment request is not proper.” (emphasis added)

After the seven-day period expires, the awarding body has twenty-three (23) days, for a total of thirty (30) days from submission, to pay a construction contractor’s invoice. Failing that, the contractor may submit a claim as laid out in the California Code of Civil Procedure at §685.010, hyperlink cited above.

I met with another contractor who prevails in many Job Order Contracts statewide (they prefer to remain anonymous). Their concern was that if they pushed for payment, the agency might retaliate by denying bidding opportunities to them. Speak with your attorney; such an action by an awarding body is not likely to occur, though it may be intimated by the agency employee. Not only is retaliation illegal, but it could get the individuals responsible for the action terminated and barred from future government agency employment. If this ever happens, record it or get it in writing, then check with the agency’s counsel, County Counsel, or with the state attorney general’s office. Or call me and I will follow-up.

Quick note: Reduce everything to writing, including conversations. You memorialize a conversation by generating a confirming memo or email to the agency, with a copy to your office administrator, internal counsel, file, or contracts staff, that spells out:

• The date and time of the conversation
• The subject(s) and topic(s) discussed
• Salient points discussed
• Decisions/agreements that came of the conversation
• Timelines or milestones identified.

If it is not documented in writing, it does not exist.