Subcontractor progress billings are based on the subcontract and their schedule of values. Subcontract
billings are processed on a monthly basis. The subcontractor will submit a billing noting the percentage
of work complete on the project. The percentage will determine the amount the subcontractor can bill for
the month
It is the responsibility of the Project Staff to make sure all billings from subcontractors are received and
processed so that the owner progress billing can be submitted on time to facilitate the earliest possible
payment by the owner. The following are procedures for processing subcontractor and owner progress
billings.
Subcontractor
Call or send letter to all subcontractors 3 days prior to needing the monthly progress billings. At the
beginning of the project send a letter to all subcontractors stating the billing date. A reminder will also be
necessary each month. The same letter can be sent out to each subcontractor that has performed work
within the billing period during the project. A phone call can also be made to remind the contractors that
the billing is due. No subcontractor should be denied a progress payment when work has been
performed just because a billing wasn't submitted. Harris must show due diligence in requesting the
billing. Request the subcontractors to fax the billing to the jobsite.
File all subcontractor billings in the holding file. Billings will be received at different times throughout
the month. By placing them in one place for holding, they will not be misplaced or lost. For Master
Purchase Orders with net 30 day payment from receipt or delivery, processes the billing immediately as
long as all contract requirements have been met.
Confirm that the billing is submitted in the proper format. When the billing is first received, confirm it is
on Prime Contractor's billing form. If it is not, notify the contractor in writing immediately so the proper
form can be submitted. The form should be issued with the subcontract and a copy is included with the
contract in the subcontractor's folder. The billing cannot be processed until the proper Schedule of
Values form has been received.
Review subcontractor billing percentages for accuracy. The billing from the contractor will usually be
projected for work that will be completed through the end of the month. Walk the jobsite and review the
percentage complete and compare it with what was billed. Review the percentages with the
Superintendent. Also, confirm that materials stored are actually onsite or at a bonded warehouse and
accurately listed on the subcontractor's billing. Review the Subcontractor Status Report for the status of
previous progress billings and to confirm that the contract amounts match those in the field file.
Review change order listing for accuracy. Change orders to date may or may not be listed on the
billing form. Review the change orders in the file with what was billed. This is especially important with
deductive change orders. Pending changes should also be reviewed to determine if any deductive
changes might affect the contractor in the future. Pending amounts may be listed by the contractor.
Pending items cannot be paid until they have been incorporated into a fully executed change order and
should be mark out on the billings.
Confirm that the contract requirements have been met for insurance, submittals, certified payroll,
and record documents. Contract work completed is only one aspect of the billing. These other contract
requirements must also be met prior to releasing the billing. If any items have not been met, the billing
must be held until the issue is resolved.
Notify subcontractors of changes. Prior to revising the billing, notify the contractor in writing and by a
phone call to give the contractor a chance to explain the percentages they billed. There may be
something you have missed. If the contractor can explain the percentage, contact to owner / architect to
explain and obtain approval
Hold billings at the jobsite until the end of the month when the Owner Progress Billing is submitted to
the corporate office. This will give you time to confirm that all of the project percentages are accurate.
Review the work actually completed at the end of the month. Walk the jobsite again to verify that the
percentages billed are correct.
Approve the Billing. Approval should consist of the amount of work completed. Revise the percentages
and amounts on the billing as necessary. DO NOT GET A REVISED BILLING FROM THE
CONRTACTOR. This will allow the field and accounting to identify revised billings immediately. Also,
confirm that all of the other conditions of the subcontract have been met. Sign the billing as approved. It
is not necessary to recalculate dollar amounts when percentages are revised.
Copy the Billings and Transmit to the main office. Make a copy of all of the subcontractor billings and
back up information for the Subcontractor’s file. Additionally, a copy of the cover sheet can also be made
to include in a monthly billing file for reference. Send the original billing to the main office. Any billings
that are "on hold" should be noted as such and transmitted to the main office with the “ON HOLD form on
top of the appropriate billing.
File field copy. The field copy is filed on the far right side of the subcontractor file. This may be needed
for reference in the following months or if the accounting department has any questions.
Owner
Create a schedule of values. The schedule of values is based on the contracts and the scheduled
activities. A schedule of values reflects the costs for each scope of work. The amount of detail required
will be different for each project. If there is a great amount of detail required, the subcontractors must be
sent a copy of the breakdown for their scope of work. The schedule of values is created by the
scheduling department and review by the President and Project manager.
Obtain the billing draft form from Accounting/Scheduling. When the schedule of values has been
completed a draft will be sent to the jobsite for the first billing. The subcontractors must submit their
billing with percentages noted for each line in their scope of work noted in the schedule of values on the
Harris provided form.
Input subcontractor percentages. Review the subcontractor billings for accuracy and enter the
percentages in the schedule of values form.
Input direct work. Review direct work and enter the appropriate percentages.
Review the billing with the owner. All percentages must be reviewed with the owner's representative
prior to sending the billing to the main office for final processing. This will eliminate the final billing be
rejected for minor issues and holding up the entire billing process and subsequent progress payment.
Notify subcontractors of changes. Prior to revising a subcontractor billing, notify the contractor to give
the contractor a chance to explain the percentages they billed. There may be something you have
missed.
Send the billing draft to the main office for processing. Confirm with the Accounting Department the
date the billing is required by the owner and the number of copies required. Keep a copy of the pencil
draft in the billing folder
Transmit the billing to the owner. Confirm who will be responsible for transmitting the billing to the
owner so there will be no confusion. It is usually best to hand deliver the billing to be sure that it is not
late.
File the Field copy. The field copy will be used as the draft copy for the next months billing.
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