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

Lay out due dates, interest rate & when interest begins:
For Const. (pre-approved v. need-approval)
For Non-Const.

Answer 7

PROMPT PAY
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CONSTRUCTION:
Pre-approval is 25 BUSINESS days.
Non-approval is 20 BUSINESS days.
2% int., from due date
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NON-CONSTRUCTION:
45 days (non-business ~confirmed).
1% int., 30 days aft due date

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 ktor a written rejection of an invoice & ktor 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 mtg.

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
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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.
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~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.
———–
Generally must discl. Key is if no final fixed price is asked in the RFP, LG can wait until 10 days before requiring final fixed price.
———–
~confirmed 218.80(3).
If RFP does not require bidder to give a fixed price, LG is not required to disclose fees or assessments in the RFP.
BUT must discl 10 days b4 requiring final fixed price.

Question 26

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

Answer 26

Generally yes but key is fixed price.
If no final fixed price in RFP, no req to discl until 10 days before requiring final fixed price.
———–
~218.80(3)
If RFP does not require bidder to give a fixed price, LG is not required to disclose fees or assessments in the RFP.
BUT must discl 10 days b4 requiring final fixed price.

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.

Question 28

PROMPT PAY - CONST.
-----------
A)  How many categories of construct invs?
-----------
B)  Due date for const services?
-----------
C)  What is int rate for const?
-----------
D)  From what date is interest applied?

Answer 28

PROMPT PAY - CONST.
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A)  2
-----------
B)  Pre-app 25 BUS days, no-app 20 BUS.
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C)  2% int.
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D)  Due date.
D)  From due date

Question 29

PROMPT PAY, NON-CONST.
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A)  How many cats of non-construct invs?
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B)  Due date for non-construct servs.
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C)  Int. rate?
-----------
D)  From what date is int. applied?

Answer 29

PROMPT PAY, NON-CONST.
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A)  1
-----------
B)  45 days (non-business ~confirmed).
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C)  1% int.
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D)  30 days aft due date

Question 30

Which due dates run BUSINESS days & which are CALENDAR days?

Answer 30

PROMPT PAY
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CONST:
pre-app:  20 business.
need app:  25 business
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NON-CONST.
45 calendar