Prompt Pay

Question 1

What is the Prompt Pay requirement for all purchased by LG?

Answer 1

Will pay in a timely manner.

Question 2

State the 3 stated purposes of the Prompt Payment Act.

Answer 2

PROMPT PAY

1) Require LG to prompt pay construction services.
2) Apply interest to construction late payments.
3) Provide dispute resolution.

Question 3

What is first thing LG must designate when entering a K w/ a contractor?

Answer 3

LG rep to receive contractor invoices.

Question 4

What does contractor invoice due date depend on?

Answer 4

Whether LG rep must approve the invoice prior to presentation to LG for payment.

Question 5

What is due date of contractor invoice if LG rep must first approve?

Answer 5

25 business days from date invoice is stamped received.

Question 6

What is due date of contractor invoice if LG rep need not first approve?

Answer 6

20 days from date invoice stamped received.

Question 7

Other than # of days & requirement of approval, what is a distinction between due dates between invoices:
For Construction (pre-approval v. no-approval)
For Non-Construction.

Answer 7

PROMPT PAY
-----------
CONSTRUCTION:
Pre-approval is 25 BUSINESS days.
Non-approval is 20 BUSINESS days.
NON-CONSTRUCTION:
45 days (non-business ~confirmed).

Question 8

If LG misses a payment deadline, what must contractor do?

Answer 8

Send overdue notice.

Question 9

What is significance of LG’s receipt of overdue notice?

Answer 9

After 4 business days of delivering an overdue notice, if LG does not reject the invoice it is deemed undisputed.

Question 10

What is LG required to do if it disputes the invoice or the overdue notice?

Answer 10

w/i 20 days of receipt, provide written rejection, specifying deficiency & stating action to rectify.

Question 11

If LG sent contractor a written rejection of an invoice & contractor revises the invoice, what now must LG do?

Answer 11

PROMPT PAY
-----------
Pay or notice rejection:
a) w/i 10 business days of receipt or
b) 1st business day after LG's next meeting.

Question 12

How long does a contractor have to pay its subs after receiving LG payment?

Answer 12

10 days.

Question 13

How long does subcontractor have to pay the sub-subcontractors after receiving contractor’s payment?

Answer 13

7 days.

Question 14

What are penalties for LG late payment for construction services?

Answer 14

PROMPT PAY
-----------
2% per month (more if agreed to in K).
***NEW 2021*** used to be 1%,
-----------
non-construction = 1% aft 30 days ~unconfirmed~

Question 15

Are costs & attorneys fees available to a contractor?

Answer 15

No, not for disputes w/ LG. ~confirmed, no AF!
Yes for disputes w/ subs.

Question 16

What procedure must LG initiate if there is a payment dispute?

Answer 16

• w/i 45 days proper invoice was received,
commence its established dispute resolution procedure.
• w/i 60 days proper invoice was received, have final decision.

Question 17

How much can be withheld for retainage?

Answer 17

Up to 5%.

Question 18

When can LG refuse to pay retainage?

Answer 18

PROMPT PAY

(1) Subject of good faith dispute.
(2) Claim filed under 255.05 (surety bond).

Question 19

When is retainage not required?

Answer 19

PROMPT PAY

(1) $200k, contract cost of construction.
(2) Federal funds.

Question 20

Are punch lists mandatory?

Answer 20

Yes.

Question 21

What are the timelines for punch list?

Answer 21

30 days - less than $10M
60 days - more than $10M

Question 22

Are payment & performance bonds mandatory?

Answer 22

Yes UNLESS $200k or less may be waived @ discretion of LG.

Question 23

What are penalties for LG late payment for non-construction services?

Answer 23

PROMPT PAY
-----------
1% per month beginning 30 days from due date.
-----------
~confirmed FS 218.74(4)

Question 24

May LG negotiate zero interest on late payments for construction services?

Answer 24

No.

Question 25

Must LG disclose to contractor all permit fees, impact fees, etc. that may be paid to LG?

Answer 25

Yes, disclose dollar amount.

Question 26

Must LG disclose to contractor all permit fees, impact fees, etc., if there is no fixed price in the contract?

Answer 26

No, BUT must disclose 10 days before deadline of pricing.

Question 27

What is penalty for LG if it fails to disclose permit fees, impact fees, etc., in contract?

Answer 27

Cannot assess said fees & cannot halt construction for failure to pay same.