Virtual Diversity Series Town Hall: Pay When Paid And Retention Contract Provisions
Pay When Paid Clause and Retention Contract Provisions
When a general contractor inserts a conditional payment clause into its subcontracts, it inevitably does so because it is trying to condition its payment obligation to the subcontractor on the general contractor’s receipt of payment from the owner. However, use of a pay-when-paid clause will not accomplish that goal. Courts often construe pay-when-paid clauses as effecting only the timing of payments to a subcontractor, rather than excuse an unpaid contractor from its payment obligation to its subcontractors.
Some questions we will explore:
- If the subcontractor has not negotiated such a limitation on the enforcement of the pay when paid clause?
- Must the subcontractor wait forever?
- Does the subcontractor have any possibility of redress?
- What are retention payments?
- Do retention payments slow down projects?
- Who should not be held to retention payments?
- What should we ask for from owners and from general contractors?
- How can we improve productivity?
Marvin L. Johnson, CCA, CCP, NACA – Senior Member – Construction Management Partners, LLC
Marvin has amassed 36 years of construction project management experience. His Sr. Level Management, Operations and Construction Audit expertise has contributed to the placement of over $5 Billion of construction in the St. Louis metropolitan area and the surrounding Mid-West and South-East Regional markets. Marvin currently serves as Senior Member of Construction Management Partners, LLC (CMP). CMP is a professional consulting firm specializing in the areas of Project Management (Incl. Owner’s Representative), Construction Audit and Advisory, and Diversity Program Management services.
Specialty markets include Healthcare, Higher Education, Corporate Facilities and Major League Sports. Other Owner support services include specific project financial management and controls, project closeout/reconciliations, risk assessment and management strategies for selecting the proper delivery method, preconstruction-speed-to-market. Marvin’s core competencies include:
Recognized industry management level performer and advisor
Skilled presenter and subject-matter expert
Market intelligence related to relationship development.
Strategies for building a successful project team to achieve optimum project results
Team leader – Responsible for effective allocation and use of staff resources for client results-driven programs.
Highly skilled writer, speaker, and communicator – Proposals, project scope development, organizational
Documents and building critical mass.
Proficient and demonstrated project management skills that include all phases of design management, preconstruction, construction phase services and post construction. Schedule development, basis, logic initiation, scope and contract management, claims review, Pre-GMP, Final GMP review of terms and conditions.