Federal Subcontractor Not Paid by the Prime: What to Check Next

When a prime contractor does not pay, the first question is not simply, “How late are they?” The useful questions are what the subcontract says, what triggered payment, what the prime has said in writing, whether the work was accepted, and whether a federal payment rule or bond remedy applies to this particular job.

The fastest way to lose leverage is to argue from memory. Build the record first.

1. Identify the payment trigger

Pull the signed subcontract, amendments, invoice requirements, and any incorporated payment terms. Then answer:

• Was the invoice complete and submitted through the required system?
• Has the prime accepted the work or identified a specific deficiency?
• Does the subcontract say payment is due on a fixed schedule, after prime receipt from the Government, or only after another event?
• Is retainage, setoff, backcharge, or disputed-work language being used?
• Did the prime send the notice required before withholding or reducing payment?

If the agreement contains contingent-payment language, compare it with our guide to pay-when-paid and pay-if-paid terms.

2. Build a payment chronology

A clean chronology is more useful than a long complaint. Keep it to dates and documents:

• Work performed and major acceptance dates.
• Invoice number, amount, date submitted, and proof of submission.
• Prime acknowledgments, rejection notices, or requests for correction.
• Any statement that the Government has or has not paid the prime.
• Partial payments, retainage, offsets, backcharges, and remaining balance.
• Every contractual notice deadline that could affect a claim or dispute.

3. Understand what the contracting officer can—and cannot—do

FAR 32.112-1 gives federal contracting officers a role when a subcontractor or supplier asserts nonpayment. Depending on the contract, the contracting officer may examine whether the prime complied with subcontract payment terms or whether a payment certification was accurate. If noncompliance is found, the contracting officer may encourage timely payment and, when an applicable clause permits it, reduce or suspend progress payments to the prime.

That does not turn the contracting officer into the subcontractor’s collection lawyer, and it does not erase the subcontract’s dispute procedures. It does mean a documented nonpayment issue may have a federal contract-administration channel in addition to the private contract dispute.

Official source: FAR 32.112-1, Subcontractor assertions of nonpayment.

4. Check whether construction-specific protections apply

Federal construction work can add two important layers. FAR 52.232-27 contains subcontract prompt-payment requirements for covered construction contracts, including payment and interest provisions. Separately, the Miller Act can provide payment-bond rights on qualifying federal public construction work.

Those are different mechanisms with different requirements. If this is federal construction, review our Miller Act payment bond deadline guide and do not assume the deadlines track your subcontract’s ordinary dispute timetable.

5. Do not assume accelerated federal payment guarantees your payment

FAR 32.009-1 includes a federal policy of accelerated payment for small businesses and for primes that subcontract with small businesses under stated conditions. The same FAR section expressly says that acceleration does not create new rights under the Prompt Payment Act. Treat it as a payment-policy provision to check—not a substitute for reading the subcontract and the clauses actually incorporated into it.