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Subcontractor Direct Payment Demands

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Administrative Law Judge

General Statement

Approved subcontractors to general contractors awarded contracts by MassDOT under G.L. c. 30 have the right under G.L. c. 30, s.39F to make a sworn demand for payment of the balance due under a subcontract from the awarding authority 65 days after the final completion of subcontract work. A subcontractor is defined to include a person contracting with a general contractor or a materialman providing materials worth more than $5,000.

General contractors may file a sworn reply to a sworn demand.

The sworn demand of a subcontractor may be adjusted by an amount retained by the awarding authority to complete unsatisfactory work, an amount specified in a court order, or amounts claimed due under the subcontract by the general contractor in a sworn reply.

Summary of Direct Payment Process

A direct payment demand should be addressed to: Director, Fiscal Operations, MassDOT, 10 Park Plaza, Room 5510, Boston, MA 02116-3973. It must contain

  1. Name and address of subcontractor, name and address of general contractor, Mass contract number, location of project, amount of balance due under the subcontract, statement identifying whether demand is by a subcontractor or a material supplier.
  2. Proof that it was delivered by hand or by certified mail to the general contractor when delivered to Director, Fiscal Operations.
  3. Statement by the authorized signer that the demand was made "under pains and penalties of perjury." The sworn demand must also be notarized.
  4. Statement of the status of completion of the subcontract work.
  5. Detailed breakdown of the balance due under the subcontract.

Formal Requirements of Section 39F

View Selected Direct Payment Rulings

(1) Filing by Hand or Certified Mail

Section 39F requires that a sworn demand and sworn reply be filed at MassDOT by certified mail with a copy mailed to the general contractor at the same time. Filing may also be made by hand delivery with a copy delivered to the general contractor at the same time.

(2) Sworn Statement

Section 39F requires that direct payment demands "shall be made by a sworn statement." The demand should include an explicit statement that the person signing it has made the statements contained within the demand "under the pains and penalties of perjury."

(3) Statement That Subcontract Work Is Substantially Complete

Section 39F permits a subcontractor on a general contract awarded under G.L. c.30 to make a demand 65 days after "substantial completion" of the subcontract work. The demand is subject to adjustment by the awarding authority for the estimated cost of completing "incomplete or unsatisfactory items of work." The sworn demand must contain a "statement of the status of completion of the subcontract work."

(4) Detailed Breakdown of the Balance Due Under the Subcontract

Section 39F requires that both a subcontractor sworn demand and a general contractor sworn reply "contain a detailed breakdown of the balance due under the subcontract." The detailed breakdown of a subcontractor's demand must be sufficiently detailed under the circumstances of the subcontract that a general contractor's sworn reply may identify with specificity the disputed amount.

A "detailed breakdown of the balance due under the subcontract" (see example) should set forth the original value of the subcontract, all MassDOT-approved additions to the subcontract work through amendments to the general contractor, all pending but not-yet-approved amendments for subcontract work, all payments made by the general contractor for approved subcontract work done, all retainage taken or held, all credits, deletions, back charges or other material financial facts. The detailed breakdown should be self-explanatory and demonstrate through appropriate line items how the stated "balance due under the subcontract" was derived.

Example of "Detailed Breakdown of Balance Due"


Selected Direct Payment Rulings
Indexed by Subject

Selected direct payment rulings may be read by clicking on the links that follow. The rulings are generally indexed by Procedural and Substantive subjects of interest. Persons interested in filing direct payment demands may find the full text of rulings made on both procedural and substantive grounds.

Procedural

Mailing

Sworn statement

Detailed breakdown of balance due

Statement of substantial completion

Substantive

Backcharge

Detailed breakdown of balance due

Disputed amounts

Extra work (MHD-approved)

Extra work (not MHD-approved)

Joint bank account

Materialman

Retainage

View Selected Direct Payment Rulings

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