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E.   Progress Payments. Some state laws impose mandatory payment schedules to contractors that may not be consistent with HUD’s holdback requirements. Any such problems should be resolved before soliciting bids for a contract. For Capital Fund and Development Projects, payments shall be made as follows:

1.   If progress payments are necessary (they may not be necessary in small construction contracts), the PHA shall require the contractor to prepare a construction progress schedule for each project immediately after issuing the Notice to Proceed.  The PHA may require use of form HUD-5372, Construction Progress Schedule, or another appropriate form from various professional organizations. The information must be realistic and consistent with the information provided by the contractor on the PHA-approved schedule of amounts for contract payments and the HUD-approved Project Implementation or Development Schedule, as applicable.

2.   The PHA or its architect should review the contractor’s construction progress schedule to ensure that the scheduled dates and amount of work to be completed are reasonable and consistent with the contract.  If acceptable, the PHA’s architect shall sign the schedule and forward it to the PHA for approval. After approval by the PHA, the construction progress schedule shall be returned to the contractor and copies filed in both the construction contract file and the official contract file.

3.   The PHA should require the contractor to prepare a schedule of amounts of payments immediately after execution of the contract.  The PHA must use form HUD-51000, Schedule of Amounts for Contract Payments, for this purpose.

4.   The PHA and its architect shall review the schedule to determine that both the scheduled work to be completed by the specified dates and the amount of payment for such work are reasonable.  If acceptable, the PHA should approve and return the schedule to the contractor. HUD review is not required.

5.   The PHA is responsible for making progress payments to the contractor based on the PHA-approved schedule of amounts for contract payments.  Generally, progress payments for acceptable work and materials delivered and stored on the site are made at 30-day intervals.  HUD authorization of progress payments based on the approved payment schedule is not required.

6.   The contractor should submit a request for payment for each project on form HUD-51001, Periodic Estimate for Partial Payment.  The request shall be accompanied by the contractor’s written designation of a certifying officer.  In addition, the contractor should submit the following HUD forms or other appropriate forms, if applicable, with each periodical estimate for partial payment: form HUD-51002, Schedule of Change Orders; form HUD-51003, Schedule of Materials Stored; and form HUD-51004, Summary of Materials Stored.

7.   The PHA should review each contractor request and should approve the payment if the following conditions have been met (if the contractor requests payment for items that have not been acceptably completed, the PHA should delete those items and adjust the payment accordingly):

a.   The contractor’s request is consistent with the PHA-approved schedule of amounts for contract payments;

b.   The request does not include the amount to be retained by the PHA under the contract;

c.   The work covered by the payment has been performed in accordance with the construction documents;

d.   The form HUD-51001, Periodic Estimate for Partial Payment, has been properly executed and all applicable supporting documentation submitted; and

e.   The contractor has submitted all required reports, such as payroll reports. The PHA shall retain the original form HUD-51001 and any applicable supporting documentation for its file and return a copy of the PHA-approved forms to the contractor.