2/05/2007
Dear Subcontractor,
I want to advise you about: 1) improvements the PBC has made to its construction contract documents, to benefit Subcontractors, and 2) the opportunities for work at the PBC.
- PBC Construction Contract Improvements
Prompt Payment of Monthly Payment Estimates
In recognition of the fact that prompt payment is the key to a successful project and that Subcontractors do most of the work, we have incorporated the following provisions into our General Conditions. The general contractor must pay subcontractors within 15 days of receipt of payment from the PBC to the general. The PBC will post, on a website and at the job site trailer, 1) the date of each payment, 2) the amount, and 3) the names of the subcontractors who were on the payment estimate. If the general does not pay the subcontractor within 15 days, the Subcontractor would notify the PBC. Please view the PBC 2007 General Conditions on our website (www.pbcchicago.com). These requirements are found in General Conditions Section 16.09, Prompt Payment To Subcontractors on pages 60-1. On the website, go to “Building with the PBC,” “Download Forms,” then “Book 2 Standard Terms and Conditions for Construction Contracts.” Also, look at our bid calendar on the website and sign up for “PBC Sub-Contractor Alerts.”
Payment of Retainage
In addition, the General Conditions require the general to pay the full amount of retainage to a subcontractor when that subcontractor has satisfactorily completed its work. The subcontractor does not have to wait for project close out to receive the retainage. Stated another way the general has to “front” the retainage to the subcontractor, when the subcontractor completes its work. In addition, less retainage is held from the general contractor and therefore less will be held from the subcontractors by the general. Retainage will be reduced from 5% to 3% at 75% project completion and from 3% to 1% at substantial completion. Finally, 1% will be returned at project close out. These provisions are found in General Conditions Section 16.06 and 16.08, pp. 56-7.
Payment for Changed Work and Claims
Changed work will be paid for in a timely way as the PBC will have a weekly “round table” to approve changes. Once the round table agrees on a change, the change can be added to the next payment estimate. Also, we now have provisions in our new General Conditions which require the general contractor and PBC to resolve claims within set time frames. We intend to pay for claims, in which there is entitlement, by dealing with the issue weekly, through a PBC claim committee.
- Upcoming Construction Projects
The PBC has just entered into an agreement with the Chicago Public Schools to begin a program to build new schools and rehabilitate others. The $356 million Bond issue for the first phase of Modern School Across Chicago includes two high schools and five elementary schools some of which are being bid this month. In addition, the PBC has been tasked to build a number of police stations and fire stations this year. Campus Parks and libraries are also being planned.
I have attached a list of projects including schools, police stations and firehouses that are being bid in February and March. The list contains the names of the general contractors that are pre-qualified to bid these projects. The plans and specifications for these projects are available now.
We want the subcontractors which work on PBC projects to know that we understand our contractors and subcontractors are a key part of the project team that allows us to construct quality projects for the user departments.
I would be happy to talk to you about our improvements in our contract documents and our approach to our relationship with the companies that build our projects.