Contractor Compliance

The prime Contractor must complete a
Form 2177
, “Prompt Payment Certification”. For example, if the work was performed in January and the Contractor was paid in February, the Contractor must submit certification no later than the end of March. If final acceptance occurred in January, the Contractor must submit the final certification no later than the end of February. On federally funded projects, Disadvantaged Business Enterprises (DBEs) certify in the
TxDOT DMS system
 that they have been promptly paid.
Initiate the following actions for receipt and review of the required certification form.
  1. Verify the form is received by the due date and any payments withheld are based on a dispute.
  2. If payment is withheld without a stated dispute or the prime Contractor fails to provide the monthly or final certifications:
    • contact the prime Contractor with a reminder of its contractual obligation, and
    • when required, escalate the issue. Escalated actions may include suspending work, withholding all or a portion of an estimate, withholding project acceptance, placing the prime Contractor in default for breach of contract, or other actions deemed appropriate.
When determining if a legitimate dispute exists, the following situations are not considered valid reasons,
based on Federal Highway Administration (FHWA)
 and United States Department of Transportation (USDOT) requirements.
  1. A prime Contractor may not withhold payment to a subcontractor due to the prime not being paid the final estimate on the project. A subcontractor is entitled to payment when the Department makes payment for the work and the subcontractor meets the requirements of the subcontract.
  2. A prime Contractor may not withhold payment to a subcontractor on Project A for delinquencies or issues with the subcontractor on other projects, such as Project B or C.
Area Office must review in
TxDOT DMS
 when a subcontractor indicates they are not paid promptly and address any payment discrepancies.