Alaska Prompt Payment Requirements
- Private Jobs
- Public Jobs
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Prime Contractors
Not specified in state statutes
Subcontractors
Not specified in state statutes
Suppliers
Not specified in state statutes
Interest & Fees
Not specified in state statutes
Prime Contractors
For Prime (General) Contractors, payment due within 30 days of request for payment. Note, if grant money is to be used for payment, payment is due by the later of 21 days from delivery of invoice or public entiy's receipt of grant funds.
Subcontractors
For Subcontractors, payment due within 8 days after payment is received above.
Suppliers
For Suppliers, payment due within 8 days after payment is received above.
Interest & Fees
Interest awarded at 10.5% year. Lower tier interest accrues after due date. Prime interest accrues 21 days after due date. No fees provision
Prompt payment laws are a set of rules that regulate the acceptable amount of time in which payments must be made to contractors and subs. This is to ensure that everyone on a construction project is paid in a timely fashion. These statutes provide a framework for the timing of payments to ensure cash flow and working capital.
Projects Covered by Prompt Payment in Alaska
In Alaska, prompt payment deadlines and penalties only apply to public works projects. The laws don’t apply to private projects. The statutes can be found in Alaska Stat. §§36.90.200 – 36.90.290.
Payment Deadlines
Once the prime contractor has successfully performed according to the contract terms, they are entitled to submit a payment request to the contracting public entity. Upon receipt of the payment request, the entity has 30 days to submit payment. However, if grant money is being used to fund the project, the deadline is shifted to 21 days within either (1) receipt of the payment request, or (2) the public entity’s receipt of grant funds); whichever is later. The payment request is deemed received when the mail is stamped as delivered, or if not, actually received.
Upon receipt of payment from the public entity, the prime is obligated to pay their subs and suppliers within 8 days of payment. Payments are considered received when the check is endorsed. As for making payments, they are considered made when they are either mailed or delivered personally.
Reasons For Withholding
If the entity or prime contractor determines that the pay request or the performance, doesn’t comply with the contract, they must notify the contractor within 8 days of receipt of the request. This notice must be in writing, state the amount being withheld, and the remedial actions that need to be taken to receive payment. Once the work is corrected, the party requesting payment is entitled to receive payment within 8 days.
Penalties For Late Payment
If payments are late or wrongfully withheld, the unpaid balance will begin to accrue an interest penalty at a rate of 10.5% per year (0.875%/month). For prime contractors, interest accrues 21 days after the payment due date. As for all other parties, interest will begin accruing the first day of late payment.