Set up a "pencil copy" meeting (on larger jobs or where appropriate) once a month on or about the 1st to review pay requests with major subcontractors, and the appropriate individual(s) who approve the pay requests such as the architect, the engineers and/or the owner's representative.
Schedule specific time slots to allow one on one discussion between the subcontractor (or General Contractor) and the architect lasting no more than 10-15 minutes. An agreement will be reached during this meeting as to the amount to be billed that month and a final clean billing reflecting this agreement will be sent from the sub to the General Contractor if there is a change in the amounts billed. This will be done within two days so as to allow the General Contractor to submit a clean approved billing to the architect no later than the 5th of the month.
General Contractors and Subcontractors and Vendors should be paid within 30 days of the time that their bill is received.
Identify who will be handling the billings for the owner, General Contractor and subcontractors (specific name and telephone number). Be certain that this individual is informed with up-to-date information so that knowledgeable answers can be communicated whenever someone calls concerning payment information (such as, "when will payment occur"). Be sure that this person returns phone calls and and/or faxed questions the same day that they are received.
General Contractor, Architect and Owner to discuss prior to job commencement, the release of all payments and a portion of retention at the completion of the punch list and the work. The remaining percentage of retention (determined in advance for each job by the General Contractor, Architect and Owner) will be released once ALL closeout documents are received from the General Contractor. Hold an amount of retention on the General Contractor that reflects that amount of remaining closeout documents to be turned in, but in no case, less than one half of one percent. Clearly state this in the front-end documents on the job.
In the transmittal to the owner, architect should state the date the Owner is to pay General Contractor's pay request.
Transfer all interest bearing provisions down from General Contractor to Subcontractors
If possible have subcontractor's check prepared and signed in advance of receipt of payment from Owner so that the check can be mailed or picked up on the first business day after the General Contractor receives payment from Owner.
If General Contractor sends pay request late to Owner, then the General Contractor should pay the Subcontractors on time.
State the date the subcontractor's pay request should be in the General Contractor's office to be included in its pay request to the Owner.
Do not hold any more retainage from the subcontractors than the Owner holds from the General Contractor.
Reduce retainage proportionately to subcontractor whenever the Owner reduces same to the General Contractor, without subcontractor having to request the reduction.
Notify the subcontractor within 5 days after receipt of its pay request if there is a dispute and/or problem with the subcontractors pay request. If not notified within 5 days, it should be paid on time and as submitted.