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Metro Prompt Payment
Metro’s Prompt Payment process and requirements are part of a prime contractor’s commitments as outlined in a Disadvantaged Business Enterprise (DBE) prime contract.
What to Know
Metro’s Diversity & Economic Small Business and Vendor Contract Management conducted Prompt Payment University Day presentation to address prompt payment requirements and the rights of subcontractors.
During the COVID-19 public health emergency, the Diversity and Economic Opportunity Department’s (DEOD) Small Business Programs offers the following guidance.
Utilization
Contractors are reminded of their DBE/SBE/DVBE contract commitments, and the requirement that all subcontractors listed on the prime’s bid/proposal to Metro, at the time the team was selected and a contract was awarded.
- Subcontractors must be kept on the team and equitably utilized unless the subcontractor is not able to provide the committed services.
- Contractors must contact Metro DEOD for approval before performing any work committed to by listed DBE/SBE/DVBE firms.
Prompt Payment
The contractor must continue to comply with the prompt payment per the contract terms.
The contractor shall pay each subcontractor under its contract for satisfactory performance of work no later than to seven days after receipt of each progress payment received from LACMTA. Subsequently, subcontractors must pay their subcontractors within seven days (at all tier levels).
Pursuant to Metro’s prompt payment requirements, the contractor is obligated to pay for work performed by its subcontractors, not in dispute, if it has authorized or directed a subcontractor to proceed to said work. Any delay or postponement of prompt release of retention beyond the seven-day time limit shall be for good cause, and only upon prior written approval by Metro.
Release of Retention (for construction)
Contractors are not permitted to withhold a subcontractor’s retention until the end of the project. Retention must be released upon completion of all subcontractor’s work.
Contractors must inspect the subcontractor’s work and if accepted, notify Metro’s project manager for inspection. When Metro and the contractor, at any tier, have made an incremental acceptance of a portion of a subcontractor’s work, at any tier level, the work of the subcontractor covered by that acceptance is deemed to be satisfactorily completed. After Metro’s acceptance, the contractor must release retention within seven days. Subcontractors must submit acceptable documentation to the contractor to assure accepted work and payment.
Termination and Substitution Requests
Contractors must continue to apply the termination and substitution requirements.
No contractor, at any tier, may terminate a DBE/SBE/DVBE subcontractor for convenience and then perform that work with its own workforce or that of its affiliate.
- Contractors must still demonstrate good cause to justify terminating a DBE/SBE/DVBE with committed work on a project.
- If a contractor determines it must terminate a DBE/SBE/DVBE, the prime must notify the DBE/SBE/DVBE in writing (with a copy to Metro) that it intends to terminate and lists cause(s). The notification must allow the DBE/SBE/DVBE five days to respond. Only after this process occurs can the contractor request from Metro to terminate/substitute the DBE/SBE/DVBE.
- The contractor must make good faith effort to substitute the value of the DBE/SBE/DVBE participation.
The Contractor must obtain Metro’s written consent prior to making any termination/substitutions.
Commercially Useful Function Reviews
For a contractor to count the firm’s work toward the commitment, the DBE/SBE/DVBE firm must be performing a commercially useful function (CUF) on the project.
Metro must monitor contract activity and certify in writing that DBE/SBE/DVBE firms are performing a CUF.
Metro will continue to conduct CUF reviews. However, in light of COVID-19, Metro may use alternative methods, such as asking DBE/SBE/DVBE firm owners and prime contractors to electronically submit key contracting records, such as payrolls, invoices or electronic communications, when conducting CUF reviews.
Please be sure to comply if you are contacted about a CUF review.
How to Reach Us
Metro remains committed to small business inclusion during these unprecedented times. To reach DEOD directly:
For any post-award contract compliance requests (i.e. prompt payment issues, subcontractor activity, small business complaints, utilization, substitution/termination requests, return of retention, crediting issues, requests to add subcontractors), send email to: SBComplianceInquiry@metro.net.
For any questions regarding the Small Business Reporting System (B2GNow) (i.e. payment reporting, incorrect contract information, audit unlocking, document uploading), send email to: DEODB2GNowSupport@metro.net.
Contact Us
Submit feedback:
Tashai R. Smith, DEO
General questions:
Elke Campbell
