General Requirements (Subconsultant)

General Requirements (Subconsultant)

Executed Contracts

Subcontracts must be duly executed between the prime consultant and all subconsultants in order to work on an ADOT contract.  A written notice to proceed must be received from ADOT and the prime consultant prior to subconsultants starting work. Any work performed before that may not be compensated. This is discussed in more detail on the bidding guide.

On-Call Task Order Assignments

When a project requires the services of an On-Call service contract, the ADOT Project Manager contacts the prime consultant and provides a task order number and a specific scope of work for the project. ADOT makes an effort to distribute work equally among all On-Call consultants, but this is not always reasonable or feasible. New rules recently mandated by the federal government will require ADOT in the future to create a competitive process for task order assignments among selected consultants. There is no guarantee that having an on-call service contract will result in any work at all.

As a subconsultant, On-Call Task Order assignments are little different than any other contract for you. The prime is largely responsible for negotiating and managing the contract.

For more information, see Contract Award and Administration Rules, section 4.12, on the ECS Policies and FAQ page.

Monthly Progress Payment Reports/Invoices

In order to invoice ADOT at the specified interval (usually monthly) the prime consultant must submit a Progress Payment Report (PPR). Prime consultants count on subconsultants to submit detailed invoices in a timely manner so that the prime may in turn report monthly costs to ADOT and receive reimbursement for the work performed by subconsultants.

Payment Reporting, Prompt Payment and Retainage

Prime consultants are required to pay their subconsultants within seven days of receiving payment from ADOT, and subconsultants are required to pay tier subconsultants within seven days as well. Similarly, prime consultants are required to make final payment to a subconsultant of all monies owed within seven days of receiving payment from ADOT. Prime consultants are required to enter payments made to all subconsultants in the ADOT DBE and OJT Online Reporting System (DOORS), formerly known as 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 subconsultants to federal funding sources.

ADOT monitors prompt payment. Subconsultants will receive an email notification when the prime consultant reports payment. It is important for subconsultants to report to ADOT in the ADOT DBE and OJT Online Reporting System (DOORS), formerly known as the ADOT DBE System and to ECS if they have not been paid promptly. This reporting must be done within 45 days otherwise ADOT will determine that subcontracts have been promptly paid.

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

If the consultant fails to make prompt payment for three consecutive months, or any four months over the course of one project, or if the consultant 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 subconsultants, terminate the contract for default, and/or disqualify the consultant from future bidding, temporarily or permanently, depending on the number and severity of violations.

ADOT typically does not hold retention from prime consultants. However, if the prime contract allows for retainage, then prime consultants may hold retention against a subconsultant. If the prime contract provides for retention, the prime consultant and each subconsultant of any tier must not retain a higher percentage than ADOT may retain under the prime contract.

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

For more information on prompt payment requirements, see the Prompt Payment and Subcontracting sections of the ECS Contract template or watch this video on the FHWA website.

Dispute Escalation Process

Sometimes a dispute arises and must be resolved. Disputes about Contract Modification (CM) are the most common example of this. When a dispute does arise, ADOT attempts to resolve it at the lowest management level possible. Ideally, the dispute is discussed and resolved between the ADOT project manager, the consultant’s project manager, and the ECS project specialist. If they are unable to reach a satisfactory agreement, the dispute may escalate to include more senior personnel such as the ECS contract manager or ADOT section manager. Serious disagreements may escalate all the way to the State Engineer and ECS Director.

See Section 4.09 of a sample design contract for a complete description of the Dispute Escalation Process.  Sample design contracts are available from the Engineering Consultants section of the ADOT website.

Change of Consultant Project Team

The composition of your project team is a strong part of the reason your SOQ submission was selected for the project. If you find for some reason that you need to replace a member of your team, you must provide at least ten days’ notice to ADOT in writing. The notice must include both the credentials of the leaving team member and the credentials of the proposed replacement. ADOT has the right to reject any proposed replacement. Should your project team change due to a change in subcontractor, you must submit an “Add or Remove Subconsultant Request Form”, which can be found on the ECS Forms and Templates page.

There are additional requirements related to replacing DBE subconsultants. See the Substitution/Termination of a DBE Subconsultant Requirements tab for more information on these requirements.

Subconsultant Performance Evaluation

The Consultant Evaluation Program is designed to maintain open lines of communication between the ADOT project manager, ADOT staff, and the consultant. Consultant performance evaluations are conducted at least once a year by ADOT staff to ensure that projects are on schedule, within budget, and being performed well. Subconsultants are evaluated at the same time as the prime, and some of the subconsultant’s scores affect the prime consultant’s ultimate score. A poor evaluation score can make it harder for the prime consultant to win future contracts because it is taken into account during SOQ evaluation.

For more, see: Contract Award and Administration Rules, section 4.15, on the ECS Policies and FAQ page.

You may also wish to read the Evaluation Program Guidelines, which is available on the Consultant Resources page. 

Incurred Cost Audit

A final or Incurred Cost Audit (ICA) may be required by ADOT to determine contract costs’ allowability, allocability, and reasonableness on cost plus fixed fee contracts. Generally, only large, overhead-based contracts require an ICA. For more information on the nature and requirements of the ICA, see the Consultant Audit Guidelines document on the ECS Forms and Templates page.

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 consultant for the specific retention requirements for your contract.