The bill amends Section 42-11.1-3 of the General Laws in Chapter 42-11.1 entitled "Prompt Payment by Department of Administration" to change the time frame for bill payments from thirty (30) working days to thirty (30) calendar days upon receipt of a proper invoice or other contractual dates for periodic payments. It also requires contractors to pay their subcontractors within ten (10) calendar days of receiving payment from the state. The bill allows for the setoff of payments due to subcontractors by the amount of any unpaid legally enforceable debt owed by the subcontractor to the contractor or any amount the contractor is entitled to withhold under the terms of their contract, or any statutory obligation or enforceable lien.

Additionally, the bill introduces a new subsection (c), which grants the director of the department of administration the power to impose sanctions on contractors or subcontractors who fail to comply with the provisions of this section. The division of purchases, in consultation with the office of diversity, equity, and opportunity, is tasked with establishing standards for enforcement and procedures for handling inquiries regarding a contractor’s noncompliance. The existing subsection (c) is relettered to (d) and specifies that the section does not apply to contractors or subcontractors working on contracts awarded by the department of transportation unless a payment and performance bond is provided. The act would take effect upon passage and aims to ensure timely payment to contractors and subcontractors, with the department of administration having the authority to enforce compliance.

Statutes affected:
5333  SUB A: 42-11.1-3
5333: 42-11.1-3