Section 2: Use of Joint Checks to Guarantee Payment for Materials and Supplies

District Responsibilities

Step 1:
Review DBE Joint Check Approval Form 2178 and supporting documentation:
  • DBE’s written request to the prime contractor for the use of a joint check agreement.
  • Documentation of DBE subcontractor applying for credit with the material supplier.
  • Material supplier’s response to DBE subcontractor denying credit.
Step 2:
Verify or ensure the following:
  • The prime contractor has not required the subcontractor to use a specific supplier or the prime contractor’s negotiated unit price.
  • The DBE subcontractor is more than an extra participant in releasing the check to the material supplier.
  • The DBE subcontractor (not the prime contractor) negotiates the quantities, price and delivery of materials.
  • The prime contractor issuing the check acts solely as guarantor.
  • The DBE subcontractor releases the check to the supplier.
  • The arrangement is short-term with the purpose being the DBE subcontractor’s establishment or increase of a credit line with the material supplier.
  • The DBE subcontractor is responsible for both furnishing and installing the material/work item.
  • The DBE subcontractor and the prime contractor must keep records of paid invoices and canceled checks as TxDOT will regularly be requesting them to ensure compliance.
Step 3:
Complete Form 2178 approving or denying joint check arrangement.
Step 4:
Respond in writing to prime contractor, with a copy to the DBE subcontractor, approving or denying joint check arrangement. (See Appendix A, Section 3 for sample letters)
Step 5:
Periodically monitor the use of joint checks.
Step 6:
Request a copy of cancelled checks for the months the contractor issued a joint check to each DBE with an approved DBE Joint Check Approval.
Step 7:
Ensure allowable goal credit begins the date the joint check request is approved.