POLICY: Subcontractor Application for Payment and Partial Release of Lien

PURPOSE: To ensure a uniform billing procedure to subcontractors.

RESPONSIBILITY: Project Manager

PROCEDURE:

1. Subcontractor pay applications should be submitted on the day of the month stated in the subcontract. Typically the application is due to Carter & Carter. by the 15th of the month. All applications received by the 15th of the month will be processed for payment by the 15th of the following month. (The date of payment is typically 30 days after the date the application is required to be delivered to Carter & Carter.)

2. The Project Manager will only accept subcontractor applications for payment that have been completely and properly submitted on the “Subcontractor Application for Payment and Partial Release of Lien” form (O.P.M.-80-A).

3. Both sides of the form should be completed and properly notarized.

4. The Project Manager should check the numbers on each line to ensure accuracy.

5. The application must be accompanied by a “Schedule of Values” (AIA – G703). The Schedule of Values should be in such detail as to allow the Project Manager to accurately determine the amount of work complete. In most cases, the subcontractor’s work should be broken down by activities per building or by floor. The Project Manager should approve a Schedule of Values prior to submission of a subcontractor’s first pay application.

6. The Project Manager should ensure a line item on the Schedule of Values is “clean-up.” The Project Manager should negotiate the highest possible value for that line item. As with any of the other items on the schedule, if clean up is not being adequately performed by the subcontractor, the Project Manager should not approve the pay request.

7. If any revisions or corrections are made to the application, the application must be resubmitted by the subcontractor in acceptable form prior to approval by the Project Manger.

8. The Project Manager should always ensure there is sufficient balance and retainage remaining to be paid the subcontractor to complete the contract if necessary.

9. Once the application is acceptable, the Project Manager should indicate approval by initialing the form and indicating the proper job cost code. This application should then be given to accounting for processing.

10. It is extremely important to expedite the approval of the “Subcontractor Application for Payment and Partial Release of Lien” to ensure timely payments to the subcontractors.

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