(1) By mutual agreement with an original contractor, an owner may make progress payments to the original contractor on a construction contract that is anticipated to last less than 60 days. An owner shall make progress payments to the original contractor on all other construction contracts. Progress payments shall be made on the basis of a certified billing or estimate for the work performed and the materials or products supplied during the preceding 30-day billing cycle, or an alternate billing cycle as stated in the construction contract. If billings or estimates are to be submitted in alternate, rather than 30-day billing cycles, the construction contract shall specify the alternate billing cycles in a clear and conspicuous manner as prescribed in subsection (2) of this section. Except as provided in subsection (3) of this section, the owner shall make progress payments to the original contractor within 14 days after the date the billing is submitted pursuant to subsection (4) of this section.
(2) A construction contract may provide for an alternate billing cycle if the plans and specifications specifically set forth that there is an alternate billing cycle and the owner provides for each page of plans and specifications a statement substantially similar to the following statement:
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Notice of Alternate Billing Cycle
The contract will allow the owner to require the submission of billings or estimates in billing cycles other than 30-day cycles. Billings or estimates for the contract shall be submitted as follows:
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(3) An owner may make progress payments later than 14 days after the date the billing or estimate is submitted if:
(a) The owner is responsible for providing plans and specifications that expressly allow in a clear and conspicuous manner an extended payment, defined by a specified number of days after the billing or estimate is submitted; and
(b) The owner provides for each page of plans and specifications a statement substantially similar to the following statement:
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Notice of Extended Payment Provision
The contract will allow the owner to make payment within _____ days after the date a billing or estimate is submitted.
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(4) The owner is deemed to have received the billing or estimate when the billing or estimate is submitted to any person designated by the owner for the receipt, review or approval of the billing or estimate. A billing or estimate is deemed to be certified 10 days after the owner receives the billing or estimate, unless before that time the owner or the owner’s agent prepares and issues a written statement detailing those items in the billing or estimate that are not approved. An owner may decline to approve a billing or estimate or portion of a billing or estimate for:
(a) Unsatisfactory work progress;
(b) Defective construction work, materials or products not remedied;
(c) Disputed work, materials or products, not to exceed 150 percent of the amount in dispute;
(d) Failure to comply with other material provisions of the construction contract;
(e) Third party claims filed or reasonable evidence that such a claim will be filed;
(f) Failure of the original contractor or a subcontractor to make timely payments to subcontractors and material suppliers for labor, equipment, materials and products;
(g) Damage to the owner;
(h) Reasonable evidence that the construction contract cannot be completed for the unpaid balance of the construction contract sum; or
(i) Other items as allowed under the contract terms and conditions.
(5) An owner may withhold from a progress payment an amount that is sufficient to pay the direct expenses the owner reasonably expects to incur to correct any items set forth in writing pursuant to subsection (4) of this section. The owner may also withhold a reasonable amount as retainage as defined in ORS 701.410.
(6) An owner may extend the period within which the billing or estimate may be certified if:
(a) The owner is responsible for providing plans and specifications that expressly allow in a clear and conspicuous manner an extended period within which a billing or estimate may be certified; and
(b) The owner provides for each page of plans and specifications, including bid plans and construction plans, a statement substantially similar to the following statement:
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Notice of Extended Certification Period Provision
The contract will allow the owner to certify billings and estimates within _____ days after the billings and estimates are received from the original contractor.
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(7) After a subcontractor or material supplier submits a bid or proposal or other written pricing information to an original contractor, an owner and the original contractor may change the specified number of days after certification during which the owner may make payment to the original contractor or within which the owner must certify a billing or estimate. Any original contractor, subcontractor or material supplier that does not provide written consent to the change will continue to be paid as indicated in the plans and specifications.
(8) When an original contractor completes and an owner approves all work under a construction contract, the owner shall make payment in full of all remaining amounts due on the construction contract within seven days. When an original contractor completes and an owner approves all work under a portion of a construction contract for which the contract states a separate price, the owner shall make payment in full of all remaining amounts due on that portion of the construction contract, subject to the satisfaction of any issue described in subsection (4) of this section or ORS 701.630 (4).
(9) Payment is not required under this section unless the original contractor provides the owner with a billing or estimate for the work performed or the materials or products supplied in accordance with the terms of the construction contract between the parties.
(10) A construction contract may not alter the right of any original contractor, subcontractor or material supplier to receive prompt and timely progress payments as provided under this section.
(11) If an owner or a person designated by the owner as responsible for making progress payments on a construction contract does not make a timely payment under this section, the owner shall pay the original contractor interest on the unpaid balance at the rate of one and one-half percent a month or fraction of a month, or at a higher rate as the parties to the construction contract may agree.
(12) On the written request of a subcontractor, the owner shall notify the subcontractor within five days after the issuance of a progress payment to the original contractor. On the written request of a subcontractor, the owner shall notify the subcontractor within five days after the owner makes the final payment to the original contractor on the construction contract.
(13) In any action, claim or arbitration brought to collect payments or interest pursuant to this section, the prevailing party shall be awarded reasonable costs and attorney fees.
(14) If the owner and original contractor are a single entity, that entity shall pay subcontractors and material suppliers within 14 days after the billing or estimate is received unless the deadlines for certification or payment have been modified pursuant to subsection (3) or (6) of this section. [2003 c.675 §55]
Note: See note under 701.620.
Section: Previous 701.580 701.585 701.590 701.595 701.600 701.605 701.620 701.625 701.630 701.635 701.640 701.645 701.900 701.990 701.992 NextLast modified: August 7, 2008