Julia Loudenburg and Jennifer Harris | Peckar & Abramson
Contracts
Construction contracts
What standard contract forms are used for construction and design? Must the language of the contract be the local language? Are there restrictions on choice of law and the venue for dispute resolution?
The construction and design industry in Washington DC frequently utilises standard contract forms developed by well-established organisations, including:
- American Institute of Architects (AIA) Contracts: In the district of Washington DC, the construction and design industry commonly utilises standard contract forms published by the AIA for a wide range of projects, such as AIA A101 Standard Form of Agreement between Owner and Contractor (for a stipulated sum); A201 General Conditions of the Contract for Construction (which outlines the duties and responsibilities of the parties involved); and AIA B101 Standard Form of Agreement between Owner and Architect (for design services).
- ConsensusDocs: These are another set of widely recognised contract forms, such as ConsensusDocs 200 (Standard Agreement and General Conditions Between Owner and Constructor) and ConsensusDocs 240 (Agreement Between Owner and Design Professional)
- EJCDC Contracts (Engineers Joint Contract Documents Committee): EJCDC contracts are frequently used for engineering and construction projects in Washington DC, particularly in public works and infrastructure projects. These documents are recognised as industry-standard contracts for engineers, architects, and public project owners.
- DBIA Forms (Design-Build Institute of America): These are widely recognised contract forms for design-build projects such as DBIA Document 530 Design-Build Agreement and DBIA Document 535 Design-Build General Conditions.
- District-Specific Contracts: For public projects in Washington DC, contracts must comply with the District of Columbia Municipal Regulations Title 27 (Contracts and Procurement) (May 2025), which outlines procurement procedures through competitive sealed proposals for construction services (Chapter 27-1600 (May 2025)) and for smaller-scale projects (Chapter 27-1800 (May 2025)). These contracts align with federal and local procurement guidelines and may vary based on competitive bidding or negotiated procurement methods.
Language of contract
There is no specific statutory requirement in Washington DC that mandates the use of English for contracts. However, considering Washington DC’s legal and business environment, contracts are generally drafted in English to ensure clarity, enforceability, and comprehension by all parties and the legal system.
Restrictions on choice of law and venue for dispute resolution
Under § 28:5-116 (May 2025) of the District of Columbia Code, the parties involved in a contract have the freedom to choose the jurisdiction whose laws will govern their agreement. If no law is specifically chosen, the law of the jurisdiction where the person is located will apply. If there is a conflict between the rules set out in this section and other related laws, this section takes precedence, except where specified non-variable provisions in other laws apply. The parties can choose a specific forum (venue) to resolve any disputes arising out of the contract. This selection follows the same process as choosing the governing law, allowing the parties to decide where legal disputes will be settled.
Payment methods
How are contractors, subcontractors, vendors and workers typically paid and is there a standard frequency for payments?
In Washington DC, the payment practices for contractors, subcontractors, vendors, and workers are governed by specific statutes that outline the frequency and conditions under which payments must be made.
Contractors
- Prompt Payments: For private projects, § 27A—102 (May 2025) of the District of Columbia Code outlines the requirements for prompt payments to contractors. For construction contracts lacking specified payment dates, owners must pay any undisputed amounts within 15 days of the earliest event between receiving an occupancy permit, taking possession of the property, or receiving a payment request from the contractor. If the contract explicitly sets payment dates, the owner must pay undisputed amounts within seven days following the agreed-upon date or time. For public projects, § 2–221.02 (May 2025) states that district agencies must pay for delivered goods or services by either the contractual payment date or, if unspecified, within 30 calendar days after receiving a proper invoice.
- Retainage: Under § 2–203.01 (May 2025), 10% retainage must be withheld from all payments as a guarantee that the contractor fully and faithfully completes the work. However, once 50% of the contracted work is completed and paid for, the Mayor may, at their discretion, reduce or eliminate the 10% retainage on subsequent payments.
- Final Payment: Under § 2–203.01 (May 2025), when the project is substantially completed, the Mayor has the authority to release all or part of any excess retained funds. The Mayor can also authorise full payment, including retained amounts upon the completion of the project.
Subcontractors and vendors
- Prompt Payments: For private projects, under§ § 27A—104 (May 2025), contractors must ensure that undisputed amounts are paid to subcontractors within seven days after the contractor or subcontractor receives payment for subcontracted work or materials. For public projects, under § 2–221.02 (May 2025), contractors must pay subcontractors within seven days of receiving funds from the district or notify subcontractors and the District agency in writing if withholding payment.
- Retainage: In Washington DC, there is no specific statute regulating the amount or application of retainage for subcontractors. However, retainage terms can be typically defined within individual contracts between parties.
- Vendor Payments: In Washington DC, the payment terms for vendors, including the frequency and method of payment, are typically outlined in the contract agreements.
Workers
- Payment Frequency: In Washington DC, under § 32–1302 (May 2025), employers must pay wages on regularly scheduled paydays, at least twice per month, with no more than 10 working days passing between the end of the pay period covered and the regular payday designated by the employer. Employers may maintain a monthly pay schedule if it has been established by contract or custom.
- Wage Laws: Under the District of Columbia Minimum Wage Act Revision Act of 1992 (May 2025), employers are required to pay workers overtime at a rate at least 1.5 times their regular hourly rate for any hours worked beyond 40 hours in a workweek.
- Prevailing Wages: Prevailing wages apply to public works projects and are determined by the DC Department of Employment Services under § 2-220.03 (May 2025) for locally funded projects, as well as the Davis-Bacon Act ( §§ 3141-3148 of Title 40, United States Code (May 2025)) for federally funded projects. These wages include hourly pay, overtime, and benefits and vary based on job classification and locality.
Mode of payment for contractors, subcontractors, vendors, and workers
Contractors, subcontractors, vendors, and workers in the state are typically paid through various methods, including checks, electronic funds transfers (EFT), direct deposits, and payroll cards. The specific mode of payment depends on the contract terms and industry practices. Contractors and subcontractors often receive payments via checks, direct deposits, wire transfers or EFTs, while workers are usually paid through direct deposit or payroll checks. Vendors might be paid through purchase orders with net terms, ACH Transfers, or credit cards. Ensuring timely payment through these methods is crucial for compliance with Washington DC’s law and maintaining good business relationships.
PPP and PFI
Is there a formal statutory and regulatory framework for PPP and PFI contracts?
Washington DC has an established formal statutory and regulatory framework for public-private partnerships (PPPs), which could encompass aspects relevant to Private Finance Initiatives (PFIs), given the nature of PPPs to involve private financing for public projects. The framework has been provided under Chapter 2A of the District of Columbia Code (May 2025) and the key provisions include the following:
- Office of Public-Private Partnerships (OP3): The law created OP3 to oversee and manage PPP projects under §§ 2—272.01 – 2—272.02 (May 2025).
- Procurement Procedures: §§ 2-273.01 – 2-273.09 (May 2025) outline various procurement strategies, including Requests for Qualifications (RFQs) and Requests for Proposals (RFPs), to ensure competitive and transparent selection processes.
- Rules for PPP projects: Under § 2–274.01 (May 2025), the OP3 must establish rules to govern PPP projects, covering development, solicitation, evaluation, award, oversight, impartiality standards, and consistent surety and bonding requirements. Within 90 days after appointing an Executive Director, proposed rules must be submitted to the Council for review over 45 days (excluding recess).
- Procurement Procedures: Competitive bidding and transparency requirements for private sector participation.
- Risk Allocation: Defines financial, operational, and legal risk-sharing mechanisms between the public and private entities.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.