New City Policy Has Contractors Acting Like Banks


In the last days of September, the city of Seattle announced dramatic changes to the prompt payment terms found in the city’s standard contract provisions for public construction work.

The city initially appeared ready to release the proposed changes on October 1 for comment prior to enacting them on January 1, 2014. But the city apparently scrapped those plans in favor of applying the new provisions to all bids and contracts entered on or after October 1.

The city’s new provisions clash with state prompt pay laws in several key respects.

The state prompt pay laws have an overarching structure that obligates public owners to promptly pay contractors for undisputed work; and for contractors, in turn, to promptly pay their subcontractors upon receiving payment from the public owner.

To read the entire article recently published in the Daily Journal of Commerce, click here.