What Is a Project Compliance Checklist and How Can it Help Construction Companies Get Paid?

Developing a project compliance checklist is a vital way to ensure your construction business is taking the steps you need to take in order to get paid for each project. While this checklist will differ for each company and for different types of projects, there are a few key elements you need to be sure to include.

Corporate registration and Professional Licensing

All states have specific requirements for registration and professional licensing. It's important for every contractor to ensure they are compliant with the state they're working in, especially for a business who performs projects in several different states.

Contract Review

When signing a contract for a new project, you may have a standard set of terms you use regularly that you worked with an attorney to draft and you are comfortable with. It's always important to check the details of each state you work in before bidding and commencing work.

For larger businesses, you may choose to have an attorney on retainer who can quickly review any contract changes or other statutory requirements to ensure the project moves forward. NLB has an entire network of experienced construction lawyers to facilitate legal compliance nationwide.

Subcontractors in particular should be on the lookout for draconian clauses in the contracts they receive from prime contractors. Question anything you don't understand, aren't comfortable with, or that seems unreasonable, particularly clauses that ask you to waive your lien rights.

Whatever your solution, make sure someone has reviewed the contract and has confirmed the project scope and timeline and programmed all necessary tracking points into your project calendar.

Job Sheet Details

Before starting a project, capture all the relevant details for your files. This generally includes the state of the project, whether it's private, public or federal, owner's name and address as well as contact information for the contracting party and anyone else you may need to notify in the event you need to file a mechanic's lien or payment bond claim. It's much easier to get this information up front as part of a normal process than down the road when an issue arises.

Bond Paperwork

If you've contracted to work on a bonded project, ensure you have all necessary paperwork completed for the bond company before work begins. Having these details handled before a project starts ensures that, in the event of non-payment, you're in a good position to advocate for your right to get paid.

A professional compliance checklist set up for each projects will keep you from hitting a snag down the road and running into a situation where you aren't getting paid in a timely fashion or having to go to court over unclear paperwork.