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Denver moves to expedite payment to MWBE subcontractors

The Devner City Council has unanimously approved a measure designed to foster greater payment security for minority- and women-owned businesses (MWBEs) that are performing subcontracting work for city contractors.

The measure, drafted in response to concerns voiced by MWBE subcontractors that they too frequently encounter problems with full and timely payment from the larger contractors they did work for on city contracts, aims ensure that disadvantaged subcontractors are "paid timely for their quality work."

Early drafts of the bill contained a provision mandating payment to subcontractors within 35 days after work was completed. However, this provision was removed after pushback from Mayor Michael Hancock. Remaining in the bill were various provisions relating to information tracking on the part of the Division of Small Business Opportunity (DSBO), which has oversight over the city’s contracting, as well as miscellaneous changes to other provisions relating to subcontracting.

Under the new law, the DSBO is required to complete an evaluation which includes information on program compliance and MBE, WBE, and SBE activities in the city - including data on completed work payments to these businesses - on or before April 1st of 2018. In support of this study, the DSBO is requiring MBEs, WBEs, and SBEs submit a variety of identifying information, as well as details about projects and payments they have subcontracted on. The DSBO is also required to investigate payment delays to MWBE subcontractors that exceed 60 days.

Additionally, City of Denver agencies are now authorized to release payments owed to subcontractors, upon the request of the prime contractor, in order to avoid the delays that would otherwise occur due to city retainage that is being held until the completion of the full project. 

The measure also includes provisions requiring MBE and WBE utilization to conform to the individual letters of intent submitted with project-specific proposals or bids and forbids contractors from retaliating against any subcontractor reporting issues to the DSBO.

To read the City of Denver's new MWBE subcontractor payment law in full, visit: https://denver.legistar.com/LegislationDetail.aspx?ID=3287830&GUID=3050FABB-73D2-4856-AD42-97EE00C6BE4F&Options=ID%7CText%7C&Search=