b'The Construction ActPROMPT PAYMENT AND THE NEW ADJUDICATION PROCESSO intention of dramatic- Prompt payment overview provi-By Jamie Collum, Surety Account Executive, FCA Insurance BrokersOn October 1, 2019, the second phase of theWithin 14 days of the owner receiving Construction Act came into effect. This phase,The essence of the prompt paymentthe proper invoice, the owner must notify known as prompt payment and adjudication,sionsisasetofstatutorydeadlinesforvia a notice of non-payment of their was drafted with thepaymentsonconstructionprojects.Theseintention to not accept all or a portion of ally improving the speed of payments frompaymentdeadlinesaretriggeredwhenthethe invoice; the top of the construction pyramid down f no notice of non-payment is received prime contractor submits a proper invoiceIto the last supplier at the bottom on capitaltotheprojectowner.Aproperinvoiceby the prime contractor by day 14, then improvement projects. mustcontaincertaininformationandthe owner is required to pay the full meettherequirementsasspecifiedintheamount of the invoice within 28 days of Transition rules contract, including: receiving the proper invoice;After payment has been received by theAs with any new legislation, there is a transi- 1. the contractors name and address, prime contractor by day 28, the onustion period, and it is important to understand2. the date of the proper invoice and thethen falls on the prime contractor totheserules.Ifaprocurementprocesshasperiod during which services or materialspay their subtrades within seven days of commenced, or a contract has been enteredwere supplied, receiving payment, no later than day 35; into before October 1, 2019, then the new3. information identifying the authorityThe subtrade must then pay its subtradesprompt payment and adjudication rules willunder which services or materials and supplier within seven days of receiv-notapplytothatproject.Aprocurementwere supplied, ing their payment, no later than day 42, process is broadly defined to include, without4. a description including quantity of theand so on. limitation, a request for proposals, request forservices or materials supplied,5. the amount payable for services or qualifications or a request for a quotation.Notice of non-payment leadsIt is important to note that the trigger datematerials supplied and payment terms,to adjudication6. the name, title, telephone number and of October 1, 2019, is based on the prime contract,notwhenyoursubcontractwasmailing address of the person to whomWhen an owner receives a proper invoice on enteredinto.Forexample,ifyousignathe payment is to be sent, and day zero but chooses not to accept all or a 7. any other information that may beportion of the invoice, then they must issue new contract on February 15, 2020, with a prescribed by the contract and/or bya notice of non-payment to the prime con-general contractor, you cannot assume thatregulations. tractor by no later than 14 days after receiv-thiswillautomaticallyfallunderthenewing the proper invoice. This notice must state prompt payment rules. You must determineOnce a proper invoice has been submitted,whether they do not accept the invoice in full when the procurement process for the primethe key timelines under prompt payment toor only dispute a portion of the invoice and contract first began. If the general contractorremember are days zero, 14, 28, 35 and 42,will provide specific details. For example, the entered into the prime contract, and/or theas follows: notice may dispute the quantity of electrical procurement process began prior to OctoberDay zero is the day on which a primework completed and may only accept 60 per1, 2019, then your subcontract will still fallcontractor, a contractor that has con- cent of the electrical portion of the invoice, under the old rules and prompt payment andtracted directly with an owner, submits awhile at the same time accepting all other adjudication will not apply. proper invoice to the project owner; works noted. www.ecao.org14'