Meeting Contract Requirements - Guide to Successfully Completing ADOT Projects

Prime Contractor

Major Requirements

This tab describes some of the major requirements and concepts you're likely to encounter while working as a prime contractor on an ADOT project.

Subcontracting Requirements

Prime contractors are typically required to perform at least 40 percent of the original contract cost themselves and can hire subcontractors to perform up to 60 percent of the contract. Specific requirements for a given project may differ, however, so always examine your contract closely.

To submit a request for subcontractor approval, the prime contractor fills out an SRF, electronically signs the form, and provides the documents listed on the SRF to the subcontractor. Both the prime and subcontractor then sign and date the SRF, and the prime submits the SRF and a signed subcontract to the ADOT Field Report Section for approval. Complete instructions for filling out the SRF are found in the Construction and Materials Forms and Documents section of the ADOT website under the title “Subcontractor Request Form Instructions.” Note that a trucker hired as an owner-operator must sign an SRF certifying that the trucker actually is a bona fide owner-operator.

When awarded a construction contract, contractors are required to login to the ADOT DBE System and add all subcontractors working on the project to the system before the first payment is made to subcontractors.

All subcontractors must be approved by ADOT before starting work. You can submit subcontractors to ADOT for approval using the Subcontractor Request Form (SRF), which can be found in the Construction and Materials Forms and Documents of the ADOT website to be submitted electronically via DocuSign. 

Issue Resolution Process

It is critical that any issues that arise are addressed and resolved as quickly as possible. The first step when a dispute has occurred is to give verbal notice to the Resident Engineer. If the Resident Engineer is unable to resolve the issue, a written notification should be submitted within two working days to ensure that the issue does not stagnate. If necessary, the issue can be escalated to the District Engineer or State Engineer’s office. Issue resolution is a key component of partnering, so for more detail on this process, see Partnering 101: A Guide to the Basics of Partnering with ADOT in the Partnering section of the ADOT website.

Payroll and Labor Requirements

Any project that received federal funding requires payroll reporting for all employees working on the project. This is done through the LCPtracker program.

When prevailing wages are being paid, payroll information must also be tracked using the LCPtracker program to generate a Certified Payroll Report (CPR). Payroll information is entered separately for each individual employee being paid. The prime contractor must submit a CPR every week.

The first time you are awarded a contract that requires use of the LCPtracker, you should be provided with an LCPtracker ID and password by the agency which awarded you the contract.

Each of your subcontractors will be added to LCPtracker after they are approved. If they already have an account, an email notification will be sent to them stating that they have been added to the project.If they do not have an account they will be emailed a user ID (usually the phone number) and temporary password along with sign on instructions. After they successfully login, they will be able to submit payroll data for their own employees.

Required payroll information includes pay rates, hours worked, fringe benefits, and deductions. This information may be uploaded from a spreadsheet instead of being entered manually on the website. You may also be asked to submit information about the numbers and types of employees (e.g., managers, supervisors, clerks) working on the project.

ADOT also holds workshops on Certified Payroll reporting every month. You can learn more about Certified Payroll Reporting classes on the same website.

Subcontractor Payment Reporting

ADOT is required by law to collect contractor, subcontractor and tier subcontractor payment information (a tier subcontractor is a company that subcontracts to a subcontractor). This means that a prime contractor must enter all subcontractor payment information into the ADOT DBE System website.

Once ADOT has added your project to its DBE System, your first task will be to add all of your subcontractors and tier subcontractors to the project no later than 15 calendar days after the preconstruction meeting. When adding a subcontractor to the project, you will need to input some information about its role in the project and whether it counts towards the DBE goal. You will also need to attach a copy of your contract with that subcontractor. After adding a subcontractor to the project, an ADOT contract compliance officer must approve the addition. Only then may you add tier subcontractors for that subcontractor. After having added all subcontractors and tier subcontractors, you must wait until your project is under way before reporting any payments.

After receiving your first payment from ADOT (and every month thereafter while the project is ongoing), you must submit information on the payments you have made to each of your subcontractors during the previous month into the DBE System by the 15th day of the current month (e.g., information for payments made in April must be submitted by May 15th).

Failure to report payments each month will result in sanctions for the prime contractor.  For each subcontract on which the contractor fails to submit timely and complete payment information, ADOT will retain $1,000.00 as liquidated damages, from the monies due to the contractor.  Liquidated damages will be deducted each month for each subcontract on which the contractor fails to submit payment information until the contractor provides the required information.  After 90 consecutive days of non-reporting, the liquidated damages will increase to $2,000.00 for each subsequent month, for each subcontract on which the contractor fails to report until the information is provided. 

A Prompt Payment Guide can be found in the Contractor Information section of the ADOT website.  A video is also available to guide you through this process.

Once a project is complete and all payments have been made and confirmed, the prime contractor must submit a Certification of Payments form for each DBE they utilized on the project. This form certifies that all payments have been made to the DBE subcontractor, and both the prime and subcontractor must sign the form. The Certification of Payments form can be found in the BECO section of the ADOT Website. 

Contractor Payment

ADOT pays contractors based on quantities determined by ADOT Inspectors for work completed during a specific time period. There are certain monthly cutoff dates for contractor’s work to be evaluated so that payment for work can be issued by ADOT each month.  Visit the Contractor Cycle Dates section of the ADOT website for a list of cutoff dates for the current year. 

Prompt Payment and Retainage

Prime contractors are required to pay their subcontractors within seven days of receiving payment from ADOT. Similarly, prime contractors are required to make final payment to a subcontractor of all monies owed within seven days of receiving payment from ADOT. Prime contractors are required to enter payments made to all subcontractors in the ADOT DBE System each month in order to track prompt payment and so that ADOT can track and report awards, commitments and payments made to DBE and non-DBE subcontractors to federal funding sources.

If partial and final payment (including any retention) is not made or not reported by the prime contractor within 7 days from the date ADOT pays the prime contractor, ADOT will retain two times the dollar amount not paid to each subcontractor. If full payment is made within 30 days of ADOT’s payment to the contractor, the amount withheld by ADOT will be released. If full payment is made after 30 days of ADOT’s payment to the contractor, ADOT will release 75 percent of the funds withheld. ADOT will retain 25 percent of the monies withheld as liquidated damages.

If the contractor fails to make prompt payment for three consecutive months, or any four months over the course of one project, or if the contractor fails to make prompt payment on two or more projects within 24 months, ADOT may, in addition, invoke the following remedies: Withhold monthly progress payments until the issue is resolved and full payment has been made to all subcontractors, terminate the contract for default, and/or disqualify the contractor from future bidding, temporarily or permanently, depending on the number and severity of violations.

ADOT typically does not hold retention from prime contractors; as a result, the prime cannot in turn hold retention with their subcontractors. However, if the prime's contract with ADOT allows for retainage, then prime contractors may hold retention against a subcontractor similarly to how ADOT is holding retention. If the prime contract provides for retention, the prime contractor and each subcontractor of any tier must not retain a higher percentage than ADOT may retain under the prime contract.

Furthermore, if a subcontractor is performing work on multiple contracts for the same contractor or subcontractor of any tier, the contractor or subcontractor of any tier shall not withhold or reduce payment from its subcontractors on the contract because of disputes or claims on another contract.

For more information on prompt payment requirements, watch this video on the FHWA website. For more information on payment laws, see the chapter 15 of the Department of Labor’s Field Operations Handbook in the Contractor’s Information section of the ADOT website.

Buy America

Buy America is a collection of policies, which generally state that iron, steel and manufactured goods used in federally funded ADOT projects must be produced in the United States. However, a waiver for this requirement may usually be obtained if such goods are not available or not of satisfactory quality, or are much more expensive than those produced elsewhere. To learn more about federal Buy America policies, see the Buy America section of the transportation.gov website.

Change Orders

Changes to an existing contract or agreement are made using Force Accounts and Letters of Agreement for ADOT construction contracts. They change work in the contract and adjust the contract cost accordingly. They may also change or waive specifications, or add days to contract time. The District Engineer may need to sign Change Orders and Force Accounts to them to take effect, depending on the amount of the changes requested.

On the Job Training Requirements

ADOT updated their OJT program in summer 2015, providing a new OJT program structure. It is currently a pilot program intended to be revised September 2016 before being rolled out on October of 2016. The new program guidelines set requirements for acceptable training programs, trainee wages, trainee recruitment, program reporting and other aspects of the OJT program. More information on OJT program guidelines can be found on the Contractor-Based OJT page. 

Equal Employment Opportunity Requirements

Prime and subcontractors must include the FHWA 1273 in their executed contract. This is a federal contract provision that assures, among other things, equal employment opportunity and nondiscrimination.  A copy of this is available at on the FHWA website.

Breach of Contract

Breach of contract may occur if a consultant fails to address a problem identified by ADOT in the performance of a contract, changes key personnel without notification or authorization, or fails to adhere to other conditions of the contract such as meeting DBE requirements. ADOT will generally attempt to resolve the matter informally at first, but if that does not work a number of actions can be taken, including  payment withholding and contract termination. It is therefore important to respond fully and in a timely manner to any concerns from ADOT.

Extension of Contract Time

If necessary, a prime contractor can initiate a Request for Extension of Contract Time. The request should include an explanation as to why it is necessary and a revised construction schedule. You can find the Request Extension Time form in the Contractor’s Information section of the ADOT website. 

Contract Completion and Closeout

When the technical review establishes that all phases of the contract have been completed to ADOT’s satisfaction, you will be notified in writing of the final closeout procedure.

When each DBE subcontractor has been fully paid for all of the work they were contracted to perform, the Certification of Final DBE Payments form must be submitted to ADOT within 30 days of the completion of the work by each DBE firm.

Following completion of the project and notification of final close-out procedures, you are required to keep all contract files, financial files and other supporting materials for the project for five years.

Record Retention

Following completion of the project and notification of final close-out procedures, per ADOT requirements, you are required to keep all contract files, financial files and other supporting materials for the project for five years from the date that ADOT issues a final acceptance to the contractor of the construction project or the design consultant’s work is complete as defined in the contract, whichever is later.

Contact the Prime contractor for the specific retention requirements for your contract.

Coaching-Do Work
Your guide to doing work

Business Coach Home
Start Here
Be a DBE or SBC
ADOT-Find-Work-button
Bid Jobs
Do Work
Ask ADOT
Get Forms
ADOT-Seek-Help-button

The Arizona Ombudsman – Citizens Aide helps you resolve ongoing issues with State Agencies.

Civil RightsTitle VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA)

Pursuant to Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA), ADOT does not discriminate on the basis of race, color, national origin, age, sex or disability. Persons that require a reasonable accommodation based on language or disability should contact ADOT’s Civil Rights Office at civilrightsoffice@azdot.gov. Requests should be made as early as possible to ensure the State has an opportunity to address the accommodation.

De acuerdo con el título VI de la Ley de Derechos Civiles de 1964 y la Ley de Estadounidenses con Discapacidades (ADA por sus siglas en inglés), el Departamento de Transporte de Arizona (ADOT por sus siglas en inglés) no discrimina por raza, color, nacionalidad, edad, género o discapacidad.  Personas que requieren asistencia (dentro de lo razonable) ya sea por el idioma o por discapacidad deben ponerse en contacto con la Oficina de Derechos Civiles en civilrightsoffice@azdot.gov. Las solicitudes deben hacerse lo más pronto posible para asegurar que el equipo encargado del proyecto tenga la oportunidad de hacer los arreglos necesarios.