Arkansas Prompt Payment Requirements
- Private Jobs
- Public Jobs
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Prime Contractors
Not specified in state statutes
Subcontractors
Not specified in state statutes
Suppliers
Not specified in state statutes
Interest & Fees
Not specified in state statutes
Prime Contractors
For Prime (General) Contractors, progress payments due within up to 15 days of a properly prepared request for payment. Final Payment due within 90 days of completion and acceptance of the project.
Subcontractors
Not specified in state statutes
Suppliers
Not specified in state statutes
Interest & Fees
Interest at 10% year, no fees provision
Prompt payment laws are a set of rules that regulate the acceptable amount of time in which payments must be made to contractors and subs. This is to ensure that everyone on a construction project is paid in a timely fashion. These statutes provide a framework for the timing of payments to ensure cash flow and working capital.
Projects Covered by Prompt Payment in Arkansas
In Arkansas, the prompt payment laws apply to all public works projects, except those contracted by the State Highway Commission. These statutes are found in Ark. Code §19-4-1411 & §22-9-205. The laws don’t apply to private projects. The state of Arkansas doesn’t regulate prompt payment too strictly, as it only sets payment deadlines and interest penalties for payments from the public entity to the prime contractor.
Payment Deadlines
Once the prime contractor has performed in accordance with the contract, they can submit a progress payment request. Upon receipt of the payment request, the entities in charge of processing payments (design professional, contracting entity, and/or the state Department of Finance and Administration) each will have 5 working days to process the payment. This 5-day period does not include the “time required for transmittal from one party to another.” So at most, 15 days for processing, not including the “transmission” to the other parties. In regards to final payments, the public entity has 90 days from when the request was received.
Penalties For Late Payment
Starting the day after payment is due to the prime contractor, interest will begin accruing at 10% per year (0.833%/month) until payment is made. As for all other payments down the chain, the timing and late payment penalties will be determined by the terms of the contract.
