Utah Contractor Practice Exam

When does a prime contractor typically pay a subcontractor?

1. Every two weeks until the sub is completely finished with the project

2. When the sub is done with her portion of the work, and the work has been inspected

3. When the entire project is completed

4. When the contractor receives final payment from the owner

The correct answer is: When the sub is done with her portion of the work, and the work has been inspected

The correct answer is that a prime contractor typically pays a subcontractor when the subcontractor has completed their portion of the work and that work has been inspected. This practice aligns with common contractual agreements where payment is contingent upon the completion of specific tasks and the verification that they meet the required standards. This approach ensures that the prime contractor only pays for work that has been satisfactorily completed, thereby maintaining quality and accountability. Inspections play a critical role in this process, as they confirm that all work performed meets the project specifications and codes set forth in the contract. In contrast, other payment timings mentioned, such as every two weeks or upon completion of the entire project, are less typical in standard construction practices. Payments made at regular intervals may occur but are usually tied to specific milestones or phases of the work being completed rather than ongoing payments every two weeks. Additionally, the last two options, which involve final completion of the project or receipt of final payment from the owner, do not reflect the independent transactions that often occur between prime contractors and subcontractors throughout the duration of a project. These other methods can lead to cash flow issues for subcontractors and may not directly incentivize timely and quality work completion.