State contracting: subcontractors: prompt payment.
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Majority
Fiscal committee
No
Appropriation
No
Current location
Chaptered
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill changes how state contracts are paid to ensure subcontractors and suppliers are paid promptly. Starting January 1, 2027, prime contractors who receive payments from the state must pay their subcontractors, suppliers, and vendors within 45 days. For payments made before January 1, 2027, but not yet paid to subcontractors, prime contractors have until February 15, 2027, to remit those funds. The Department of General Services will monitor compliance and can penalize non-compliant prime contractors by restricting their ability to bid on future state contracts.
Key provisions
- Prime contractors must pay subcontractors, suppliers, and vendors within 45 days of receiving state payment (starting January 1, 2027).
- A grace period exists for payments made before January 1, 2027, with a deadline of February 15, 2027, to remit those funds.
- The Department of General Services will monitor compliance with payment deadlines.
- Non-compliant prime contractors will receive demerits, impacting future contract eligibility.
- Penalties include a six-month ban for five consecutive failures and a one-year ban for ten consecutive failures.
- The Department of General Services can review and rescind existing contracts for repeated non-compliance.
- Subcontractors can request payment status information from the state agency.
- Prime contractors must confirm payments to subcontractors upon request from the state agency.
Who is affected
Bill text
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Sponsors
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1 on record
Primary sponsor
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