Example of Requesting Payment to Prime to their Subcontractor

You want a "template" for a letter or email telling the former prime that you have received a complaint of nonpayment from one of its subs and that they should pay their sub? You want someone to tell you what to say in the letter?

Really?

Have you tried ChatGPT?

I wrote a simple letter but got rejected from our OC, just wanted to see if someone had a better one.  I was hoping to find a more effective one. I primarily handle construction projects that necessitate a payment bond.  

I am writing to request payment for the services provided by xx under our contract xx. As you are aware, the contract did not require any bonds to be furnished by the subcontractor.

Please note that in accordance with FAR 32.112-1(a)(3), we certify that all the services provided by xx have been completed satisfactorily and in compliance with the terms and conditions of the contract.

As per our agreement, xx has completed all work and is entitled to the final payment. Please be advised that any delay in making the payment may result in interest charges and other penalties in accordance with the terms of the contract.

Thank you for your prompt attention to this matter. Please let us know if you require any additional information or documentation.

ShawnB said:

Final payments were already made last year, so we cannot withhold payment. Thank you for your assistance in advance.

ShawnB said:

I wrote a simple letter but got rejected from our OC

I believe that this is a legal matter between the A-E prime contractor and its subcontractor.

Since the contract is closed out, your Office of Counsel should advise you what actions can be taken at this point.

Since they rejected your letter, they should know what needs to be said. They should advise you what to say or write the letter.

I’m assuming that these clauses apply to your contract. The A-E wasn’t required to certify that they will or did made payments to subs in order to be paid for progress or for the final payment.

52.232-10 Payments under Fixed-Price Architect-Engineer Contracts.

52.232-26 Prompt Payment for Fixed-Price Architect-Engineer Contracts.

Note that there is a big difference between the payment and prompt payment clauses for FP Construction and FP A-E contracts.

There may be valid reasons or a dispute between the A-E and its sub regarding the non-payment. You said final payment was made last year. It is now April…

Since you mentioned your Office of Counsel, you might be with the USACE. If so, USACE has plenty of legal support at District and HQ level offices and has policies regarding payment problems.

On 4/11/2023 at 2:24 PM, ShawnB said:

Please note that in accordance with FAR 32.112-1(a)(3), we certify that all the services provided by xx have been completed satisfactorily and in compliance with the terms and conditions of the contract.

Note that “we” don’t “certify” that the services provided, etc. Paragraph (a)(3) doesn’t mention any government certification. Paragraph (a) (3) isn’t applicable:

(a)(3): “For any contract, whether the contractor’s certification of payment of a subcontractor or supplier accompanying its payment request to the Government is accurate.”

I didn’t see any requirement for contractor certification of payments to subs in the above two referenced A-E contract clauses.

But see paragraph (b): “ If, in making the determination in paragraphs (a)(1)* and (2)** of this subsection, the contracting officer finds the prime contractor is not in compliance, the contracting officer may-

(1) Encourage the contractor to make timely payment to the subcontractor or supplier;”

* Paragraph (a)(1) (construction contract) isn’t applicable.

**See paragraph (a)(2):

“(2) For a contract other than construction, whether the contractor has made progress payments, final payments, or other payments to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor”.

So- you should see - for an A-E contract, there isn’t much you can do after final payment, other than “encourage” the contractor to pay its sub.

I’m speculating that you probably don’t know whether or not there is any valid reason that the prime hasn’t paid the sub. If so, you haven’t made the required determination yet.

Did you call the prime to discuss the sub’s complaint and get its side of the story?

Thank you very much for your valuable input. I plan to reach out to them today and hear their perspective. Initially, our OC seemed unsure about us contacting them, but she now approves of it. You really helped a lot.

Glad to help you!

Depending upon the primes reasoning, if they aren’t justified in withholding payment to the sub, you might be able to document it for reference in a future A-E selection. I’d recommend some research and discuss with your OC.

If that is a possible course of action, you might consider that in any “encouragement” correspondence”, if you need to write an encouragement letter. Of course, coordinate with KO and OC.