Alberta Infrastructure Introduces Prompt Payment in Contracts
While delayed payment is an issue across industry, Alberta Infrastructure has showed great leadership to step up and offer a solution that we hope is adopted by other owners. As part of ongoing dialogue between the Alberta Construction Association and Alberta Infrastructure, AI has changed their contracts to address the issues of prompt payment and progressive release of holdback.
Alberta Infrastructure has introduced four significant changes to their contracts.
- The contract specifies a maximum of 30 calendar days after the initial receipt of the application for payment, provided the contractor has properly completed their claim. Infrastructure will verify the invoice and adjust if necessary, advise the General Contractor within 14 days of the amount to be paid. Infrastructure has modified the Statutory Declaration so that the General Contractor must confirm that they paid their subcontractors within 10 days of receipt of payment form the Government.
- Their contracts specify that amounts which are not in dispute will be paid. Disputed amounts will be resolved during the next invoice period.
- Alberta Infrastructure has committed to publicizing the date of payment so that subcontractors and suppliers will be aware of when the prime contractor was paid (see contact info below).
- Upon appropriate application, holdback funds will be released once the portion of the work is complete. The contractor will submit their certificate of substantial performance for their portion of the work performed, and follow normal procedures of posting the certificate at the job site. Infrastructure will verify substantial performance. After the 45 day period, the contractor then applies for release as part of the next progress claim. Warranty will still be from the date of Interim Aceptance.
Alberta Construction Association applauds these changes. Prompt pay supports jobs for Albertans and their families through increased cash flow allows companies to increase staff.
Prompt pay supports small business as it will allow companies to pursue more work with timely payments. Prompt payment saves money for taxpayers with lowers bid prices by reducing the costs of financing receivables, it will increase the number of competitive bids.
Contractors can determine if Infrastructure has issued a progress payment by calling 1 – 844-252-5322 or infras.payments@gov.ab.ca