COUNTY OF SANTA CLARA
Capital Programs Division – Procedures
The County is required to pay its prime design professionals within 30 days of receipt of
their monthly pay application and within 45 days of their final billing. (Civil Code §3320(a))
The Legislature in enacting the California prompt payment statutes recognized that firms
contracting with local public entities need to be paid in a timely manner so they in turn can
meet their own financial obligations. The Legislature was compelled to take this action
because of the chronic inability of local public entities to review and process consultant
payment requests in a timely manner.
The Legislature declared that prompt payment of outstanding receipts by local agencies was
a matter of statewide concern and established strict timelines for payment including financial
penalties for failure to meet the timelines.
Any local agency, including the County, that fails to make progress payments within 30 days
after receipt of an undisputed and properly submitted payment request from a prime design
consultant, is subject to a penalty of 11/2 percent per month for every month that payment is
not made. (Civil Code §3320(b))
If the public agency disputes, in good faith, any portion of the amount due, it may withhold
from the payment an amount not to exceed 150 percent of the disputed amount. The
undisputed amount must be paid within the 30-day period. The entire payment application
must not be delayed because a portion of the requested amount is disputed. (Civil Code
The County must make the final retention payment within 45 days of receipt of the
Consultant’s final payment request. (Civil Code §3320(a))
The prime design professional must pay to each Subconsultant design professional the
amount due him or her from the payment received, not later than 15 days after receipt of
each progress payment or final retention payment. If the prime design professional disputes
in good faith any portion of the amount due, he or she may withhold from the payment an
amount not to exceed 150 percent of the disputed amount. (Civil Code §3321)
Section 23 – Payment Page 1 of 5
Revised: May, 2004
In any action for the collection of amounts withheld in violation of Civil Code §3320 or Civil
Code §3321, the prevailing party is entitled to his or her reasonable attorney's fees and
costs. (Civil Code §3320.b and Civil Code §3321.b)
Frequency of Payment Request
Invoices must be submitted for progress payment not more than once each month unless
otherwise approved by the OAR. (See PSA Part 12.03.B.2)
Percentage Completion of Basic Services
For Basic Services, invoices must be based on the percentage of Basic Services completed
through the end of the billing period.
Standard Invoice Format
The Owner’s Project Manager (PM) and Consultant should review the County’s standard
invoice prior to the first progress payment submission. The format shown in Exhibit E of the
standard PSA Agreement should be used unless there is a good reason for varying from that
When submitting invoices, Consultant must certify that the percentages claimed are true and
accurate representations of Consultant's progress to date (PSA Part12.03.B.4).
By statute, the County must make payment to a Consultant within thirty days of receipt of
the invoice or be subject to payment of interest, provided that the submission is complete
and accurate. To minimize the possibility of incurring late payment penalties, the invoice
must be date stamped upon receipt so the County can track the time required to process the
Processing Payment Requests
All payment requests for consultants are submitted to the PM. Upon receipt of an invoice,
the PM should check it for conformance with the approved "Estimated Progress Payment"
format, and verify the mathematics and percent of work complete.
Consultants whose billings are found to be incomplete, inaccurate or otherwise
unacceptable should be notified immediately, but in no case later than seven (7) calendar
days from receipt of the invoice. In case of problems with the invoice, the PM must take the
lead in working with the consultant to resolve the problem.
The PM may, at their discretion, adjust any progress payment so that it corresponds with the
percentage of completion as determined by the PM. If the adjustment to the invoice is minor,
the PM should authorize the withholding of a reasonable amount for such deficiencies (up to
150% of the disputed amount) and forward the request for payment. Withholding of the full
payment for minor deficiencies is not permitted.
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Revised: May, 2004
If it is necessary to adjust the progress payment, the PM must make reasonable efforts to
discuss (negotiate) the adjustment with the Consultant prior to processing the request for
Consultant invoices must be forwarded to the Finance Department within four (4) calendar
days of receipt. The PM must keep track of the status of all outstanding invoices and make
reasonable efforts to ensure that payment is made within the required thirty (30) calendar
day payment period.
The review and approval of Subconsultant invoices is the responsibility of the Prime
Consultant. However, the PM must verify that the Subconsultants’ work and materials have
been performed and/or furnished. The prime Consultant should submit a copy of the
Subconsultant’s invoice and backup documentation it received from the Subconsultant.
The PM should have a copy of the final fee proposal and the latest approved supplemental
Agreement(s), including Subconsultant Agreements, available for checking this submission.
Reimbursable Direct Project Expenses
For Agreements that allow the Consultant to be reimbursed project direct expenses, such as
mileage, lodging, long distance telephone, mailing, consumable materials, and the like, all
costs must be supported by copies of the receipts for these expenses. The receipts must
indicate the correct project codes (job number).
The Design Consultant is required to provide the County with copies of its contracts or
agreements with its Subconsultants with the first progress payment request including Services
performed by the Subconsultant. The County’s master PSA specifically provides that “No
payment will be made until Subconsultants' contracts or agreements are received.”
Finance Department Processing
After review and approval by the PM, the invoice, including back up information, is submitted
to Finance for payment. Finance verifies funding availability and prepares the Payment
Voucher, including all necessary financial coding. The Finance Section verifies the
mathematics, the financial coding, and that no costs exceed those encumbered under the
terms of the original or latest Supplemental Agreement.
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Revised: May, 2004
All Agreements have an expiration date and the County can not process payment on an
Agreement that has expired. The PM must verify that the Agreement has not expired before
approving an invoice for payment.
Release of Claims
Prior to final payment the Consultant must execute and deliver to the County a Release of All
Claims arising pursuant to or by virtue of its Agreement for Services with the County. The PM
must verify receipt of the Release of All Claims before authorizing the final payment to the
The Design Consultant must invoice the County on a timely basis and not later than ninety
(90) days after: (1) Services are performed; (2) Reimbursable expenses are incurred; or (3)
Billings are otherwise due pursuant to the terms of the Agreement.
Retainage provides the County with a margin of protection in the event the project does not
come to a successful completion, or if there are errors or omissions in the final product that
need to be corrected. Although required by state statutes for construction and non-
professional consultant contracts, retention is not required or commonly applied to PSAs.
However, there is no prohibition to the use of retention on PSAs and if the PM believes it is
appropriate, retainage provisions may be included in an Agreement.
Project Manager’s Responsibilities
Review the County’s standard invoice form with the Consultant prior to the first
progress payment submission
Verify that invoices are time stamped upon receipt
Check all invoices for conformance with the approved "Estimated Progress Payment"
format, and verify the mathematics and percent of work complete
In case of problems with the invoice, take the lead in working with the Consultant to
resolve the problem
Ensure that Consultant invoices are forwarded to the Finance Department within 7
calendar days of receipt by Capital Programs
Track of the status of outstanding invoices and make reasonable efforts to ensure that
payment is made within the required 30 day payment period
Verify that the Subconsultants’ work and materials have been performed and/or
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Revised: May, 2004
Ensure a clear record is maintained of the difference between individual Project
Agreement (PA) and the maximum Professional Services Agreement (PSA) limit
Verify that the Agreement has not expired before approving an invoice for payment
Verify receipt of the Release of Claims before authorizing the final payment to the
Section 23 – Payment Page 5 of 5
Revised: May, 2004