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Metro Prompt Payment

A Message to Prime Contractors and Subcontractors

Please view the Prompt Payment University Day presentation conducted by Metro Diversity & Economic Small Business and Vendor Contract Management to address prompt payment requirements and the rights of subcontractors.

In light of the COVID-19 public health emergency, the Diversity and Economic Opportunity Department’s (DEOD) Small Business Programs offers the following guidance.


Contractors are reminded of their DBE/SBE/DVBE contract commitments and the requirement that all subcontractors included on the prime’s bid/proposal submitted 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 services committed to. Contractors must notify Metro DEOD and receive prior Metro DEOD approval, before self-performing any work committed to 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 its Work no later than to 7 days after receipt of each Progress Payment received from LACMTA. Subsequently, subcontractors, must pay its subcontractors within 7 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 7-day time limit shall be for good cause, and only upon prior written approval by Metro.

Release of Retention (for Construction)

Contractors withholding a subcontractor’s retention until the end of the project is not permitted. 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 7 days. Subcontractors must submit acceptable documentation to the Contractor to assure accepted work and payment.

Termination/Substitution Requests

Contractors must continue to apply the termination/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 afford 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 (CUF) Reviews

For a Contractor to count the DBE/SBE/DVBE firm's work toward the commitment, the DBE/SBE/DVBE firm must be performing a commercially useful function or CUF on the project. To ensure that each DBE/SBE/DVBE firm is performing a CUF, 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. If you are contacted regarding a CUF review, we ask that you comply.

Contact Us

Metro remains committed to small business inclusion during these unprecedented times. To reach DEOD directly, please use the following inboxes.

  • Small Business Compliance Inquiry ( ) – use this inbox 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, etc.).
  • DEOD B2GNow Support ( ) – use this inbox for any questions regarding the Small Business Reporting System (B2GNow) (i.e. payment reporting, incorrect contract information, audit unlocking, document uploading, etc.).

Metro Connect

To access tools and resources that are designed to support your business’ growth, such as networking events, an online Toolkit, certification information, and to view current contracting opportunities or visit the 12-Month Look Ahead page to see future opportunities, click the button below: