PROMPT PAYMENT ACT – PUBLIC WORKS CONSTRUCTION

All subcontractors in Washington state should be familiar with our “Prompt Payment Act,” below.

It grants the subcontractor a right to be paid within TEN DAYS of the prime contractor’s receipt of payment from the public body owner for that scope of work.

If not, both attorney fees and interest are conferred by this statute, even if the contract is silent on those rights.

Today, “pay if and when paid” clauses are abundant in public works contracts. If you have performed work on a public project, and your work has been accepted, use this statute in every demand letter.

Remember to copy the prime contractor’s surety. If they are from out of state, they may not know about this law.

Also, do not forget to file your payment bond claim with the public owner. After 30 days, you can file suit and have a second statutory basis to recover your attorney fees. This increases your legal team’s ability to negotiate from a position of strength, and to get full recovery for you should negotiation fail.
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39.04.250
Payments received on account of work performed by subcontractor — Disputed amounts — Remedies.

(1) When payment is received by a contractor or subcontractor for work performed on a public work, the contractor or subcontractor shall pay to any subcontractor not later than ten days after the receipt of the payment, amounts allowed the contractor on account of the work performed by the subcontractor, to the extent of each subcontractor’s interest therein.

(2) In the event of a good faith dispute over all or any portion of the amount due on a payment from the state or a municipality to the prime contractor, or from the prime contractor or subcontractor to a subcontractor, then the state or the municipality, or the prime contractor or subcontractor, may withhold no more than one hundred fifty percent of the disputed amount. Those not a party to a dispute are entitled to full and prompt payment of their portion of a draw, progress payment, final payment, or released retainage.

(3) In addition to all other remedies, any person from whom funds have been withheld in violation of this section shall be entitled to receive from the person wrongfully withholding the funds, for every month and portion thereof that payment including retainage is not made, interest at the highest rate allowed under RCW 19.52.025. In any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to costs of suit and reasonable attorneys’ fees.
[1992 c 223 § 5.]