PROMPT PAYMENT TO CONTRACTORS, VENDORS, SUPPLIERS OF GOODS AND SERVICES TO CITY AND LESSORS OF CITY

Denver Revised Municipal Code ch. 20, art. VII

in effect

Denver Revised Municipal Code § 20-107 Legislative intent and policy.

Sec. 20-107. - Legislative intent and policy. It is the policy of the city to make timely payment to contractors, as defined herein, of amounts which are due and owing under contracts, purchase orders, and leases entered into by the city, and to authorize and mandate the payment of interest on such amounts due and owing to contractors when such payments are unduly delayed by the city through no fault of the contractor, except where unforeseen circumstances or legal impediments beyond the control of either the city or the contractor prevent such timely payment. This article shall apply to all contracts as defined herein, unless prohibited by law, by the source of city funding, or as otherwise provided herein. (Ord. No. 1121-01, § 1, 12-26-01)

Denver Revised Municipal Code § 20-108 Definitions.

Sec. 20-108. - Definitions. As used in this article, unless the context otherwise requires: (a) Account payable means a liability incurred by the city pursuant to a contract, evidenced in a demand upon the city and legally due and payable by the manager of finance. (b) Agency or department is an administrative division of the city. (c) Complete and responsive invoice means an invoice that: (1) Complies with any and all applicable requirements of the city's Charter, ordinances, regulations, executive orders or fiscal rules (including, but not limited to, the prevailing wage ordinance), or any other applicable state or federal law. (2) Reflects the goods and/or services provided by the contractor to the agency or department scheduled to receive them. (3) Reflects goods and/or services that comply with contract or project specifications and are satisfactory. (4) Reflects goods and/or services that have successfully met requirements for any extended testing, setup, assembly and/or acceptance period. (5) Clearly states an invoice date, a unique invoice number and, if applicable, any city-generated purchase order or contract number related to the transaction for which the invoice is being generated. (6) Reflects prices on the invoice that are reasonable or just and in accordance with the order or bid. (7) Is submitted by a contractor that has provided to the manager of finance an accurate taxpayer identification number and all other information necessary to identify the recipient of the city payment to the U.S. Internal Revenue Service or other taxing authority. (8) Is submitted in substantial compliance with the city's billing or invoicing instructions, including but not limited to instruction as to provision or delivery of the invoice to the proper city official or agency. (9) Reflects that, if applicable, the contractor has complied with all pertinent requirements of the Standard Specifications for Construction General Contract Conditions and/or special conditions and other terms or conditions of the contract at issue. (10) Is otherwise complete and free of errors. (11) Reflects that no unresolved disputes exist between the contractor and the city with respect to the subject matter of the invoice. (d) Contract shall mean a formally executed, written contract or lease, or purchase order or other lawfully incurred contractual purchase obligation, whether oral or written, prepared and undertaken in compliance with standard city procurement procedures, evidencing a lawfully incurred contractual obligation pursuant to provisions of the Denver City Charter, Code, executive orders, or regulations, to which the city is a party and incurs financial obligations to the other party or parties. (e) Contractor means a contractor, consultant, vendor or lessor under a city contract. (f) Day means calendar day, unless otherwise defined. (g) Discount means a contractor authorized reduction of an account payable for early payment of a demand. (h) Due date means the day a payment made by the city pursuant to a complete and responsive invoice is scheduled to be paid without assessment of interest. Such date may be calculated using contractor payment terms specified in the invoice or as soon thereafter as may be practicable, as set out in subsection 20-110(b) below. (i) Expending authority or paying agency means the official of the city agency or department having authority by ordinance to expend monies with respect to a particular invoice, or such official's designee. (j) Interest accrual date is the date upon which the city begins to incur an obligation to pay interest on an unpaid complete and responsive invoice previously received by the city. The interest accrual date shall be the later of thirty-six (36) days after the invoice date on a complete and responsive invoice, or the date to which the interest accrual date applicable to such invoice is adjusted as set out herein. (k) Invoice date is the date of issuance of the contractor's complete and responsive invoice submitted to the city, which is placed on the invoice by the contractor. (l) Payment means: (1) The manager of finance places a warrant, check or other payment into the U.S. Mail, postage prepaid; (2) A warrant, check or other payment is available for pick-up at the request of the contractor or the expending authority or paying agency; or (3) A warrant, check or other payment is transferred electronically from or on behalf of the city. (m) Prompt payment dispute arbiter is the individual designated to settle disputes. Such arbiter shall be appointed by the manager of finance. (n) Prompt payment means issuance of a warrant, check or other payment by the manager of finance in payment of an account payable on the basis described below in subsection 20-110(a). (o) Subcontractor means subcontractors, sub-consultants and suppliers of all tiers under contractors as defined herein. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 775-07, § 51, 12-26-07; Ord. No. 604-12, § 1, 11-26-12)

Denver Revised Municipal Code § 20-109 Exclusions from coverage of article.

Sec. 20-109. - Exclusions from coverage of article. The following categories of payments are excluded from coverage by this article and shall not bear interest as set out herein: (a) Pre-payments. (b) Employee reimbursements. (c) Refunds. (d) Retainage prior to final payment. (e) Payments for which the contractor voluntarily agrees to waive interest. (f) Employment contracts in which employees are paid through the regular city payroll process. (g) Settlement agreements entered into with individual employees or third parties arising out of employment disputes. (h) Non-contractual assistance payments including but not limited to earned income credits. (i) Workers' compensation employee and provider compensation claims. (j) Payments to contractors drawn down directly from non-city accounts. (k) Other claims or litigation against the city and/or its employees cognizable in any court, arbitration, or administrative proceeding. (l) Lease-purchase agreements, or agreements similar in concept and execution, that require periodic standardized payments by the city. (m) Contractual payments for which the contractor has failed to follow billing or invoice submittal instructions duly provided by the city. (n) Charges pursuant to public utilities tariffs. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 604-12, § 2, 11-26-12)

Denver Revised Municipal Code § 20-110 Process for prompt payment of invoices and for payment of accrued interest.

Sec. 20-110. - Process for prompt payment of invoices and for payment of accrued interest. (a) This section shall apply to and govern the process for prompt payment and for payment of accrued interest on a complete and responsive invoice. As set out in section 20-114 below, interest shall be assessed and paid automatically with respect to an account payable commencing on the later of thirty-six (36) days after the invoice date or the date to which the interest accrual date is adjusted as set out herein unless an unresolved dispute between the city and the contractor is pending. (b) Upon receipt of a complete and responsive invoice the city shall endeavor to issue payment on the basis of the contractor payment period terms set out in the invoice; provided that, if it is not practicable to do so in the city's sole discretion, payment shall be rendered as soon thereafter as is practicable. (1) In addition, the city may extend or shorten the due date if the terms of the contract at issue are more advantageous to the city than the terms of this article. (2) The city shall also take any and all discounts offered by a contractor, to which the city is lawfully entitled, if such terms are more advantageous to the city than the terms of this article. (3) Partial payments shall be made upon partial deliveries, partial contract completion, or passage of a portion of a lease term, to the extent that may be authorized in the terms or conditions of the contract at issue. (c) Responsibility for payment of interest: (1) Each agency or department of the city subject to this article VII, including the manager of finance, may maintain records showing the date of delivery of a complete and responsive invoice from the expending authority or paying agency of the agency or department to the manager of finance and the actual receipt by the manager of finance of such documentation; (2) The city shall approve and tender payment for all complete and responsive invoices within thirty-five (35) days after the invoice date; provided that this time period may be adjusted and extended by the provisions of subsections 20-111(a) through (d) in the same manner as the interest accrual date is adjusted. (d) Interest shall accrue and be paid on an unpaid complete and responsive invoice beginning on the 36th day after the invoice date unless the interest accrual date has been extended beyond such 36th day by being adjusted as described in section 20-111, adjustments to interest accrual date. (e) If any payment to a contractor on an invoice is delayed beyond the interest accrual date the city shall pay interest to the contractor on such unpaid payment as provided herein from such interest accrual date, as the same may be adjusted, until the date that payment is rendered by the city. (f) The manager of finance may create policies or may adopt rules and regulations to determine circumstances for which an expending authority or paying agency shall be charged for the payment of interest. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 570-03, § 1, 7-14-03; Ord. No. 775-07, § 52, 12-26-07; Ord. No. 604-12, § 3, 11-26-12)

Denver Revised Municipal Code § 20-111 Adjustments to interest accrual date.

Sec. 20-111. - Adjustments to interest accrual date. (a) If an invoice is not complete and responsive, the interest accrual date shall be adjusted to reflect the delay between the invoice date and the point in time when the invoice is rendered complete and responsive. (b) If an invoice is not complete and responsive the city shall notify the contractor in writing or by documented phone call, facsimile transmission, or e-mail within ten (10) days after the invoice date, or ten (10) days after receipt of the invoice by the city, whichever is later. The contractor shall in that event be required, at its option, to demonstrate to the city that the originally submitted invoice has become complete and responsive, or to resubmit a new complete and responsive invoice, unless the contractor disputes the city's characterization of the original invoice as not complete and responsive, in which case the dispute shall be resolved as set out in subsection 20-113(a). (c) If the contractor is not notified within the time specified above, the invoice will be deemed to be acknowledged as complete and responsive unless and until documented notification to the contractor is presented by the city. In that event, the interest accrual date will be extended as set out below. (d) The interest accrual date for rendering of interest to the contractor shall be extended and adjusted in the following cases: (1) When the invoice is not complete and responsive, the interest accrual date shall be extended by the number of days elapsed between the original invoice date and the date that the contractor, based on its election of remedies: a. Demonstrates to the city that the invoice has become complete and responsive; or b. Resubmits the complete and responsive invoice to the city. (2) When the date of receipt of the invoice by the city, as demonstrated solely by an official city date stamp on the invoice, is more than ten (10) days later than the invoice date, the interest accrual date shall be extended by the number of days elapsed between the original invoice date and such date of receipt of the invoice by the city. If no such official date stamp appears on the invoice, the interest accrual date will be calculated solely on the basis of the invoice date. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 775-07, § 53, 12-26-07; Ord. No. 604-12, § 4, 11-26-12)

Denver Revised Municipal Code § 20-112 Subcontractors.

Sec. 20-112. - Subcontractors. This section shall apply to and govern the payment process for all subcontractors: (a) Except as otherwise provided in C.R.S 24-91-103, as amended, or any successor statute, contractors that engage subcontractors to perform part of the work on a contract with the city shall pay subcontractors for satisfactory work in a timely fashion. A payment is timely if it is mailed, delivered or transferred to the subcontractor no later than seven (7) days after the contractor's receipt of any payment from the city. (b) If a subcontractor is not paid in a timely fashion, the contractor shall pay interest on the balance due from the eighth day after the contractor's receipt of any payment from the city, at the rate specified herein, unless a bona fide dispute exists between the contractor and such subcontractor. (c) Subcontractors receiving payment as described herein shall pay their subcontractors, and be liable for interest on late payments, in the same manner as contractors are required to pay sub-contractors in this section. (d) All contractors shall promptly render payment to all subcontractors on a contract. Each contractor shall provide with each invoice to the city on each contract, beginning with the second invoice partial claim releases from subcontractors in form and content satisfactory to the city, or shall provide, at the city's sole option, alternative proof of payment to subcontractors, in form and content approved by the manager of transportation and infrastructure and the director of the city's division of small business opportunity, evidencing that all subcontractors have been duly paid out of the proceeds of the contractor's payments from the city under the contract, unless a bona fide dispute, documented in writing exists between the contractor and the unpaid sub-contractor. (e) Notwithstanding the payment procedure otherwise set out in section 20-111, or the provisions of any definition contained in this article, the processing of final pay requests on construction, reconstruction and remodeling projects shall be as follows: (1) Time elapsed awaiting receipt by the city of a final release from a contractor with respect to a final payment, time elapsed in publication for and holding of final settlement pursuant to C.R.S. 38-26-107 or successor statute or time elapsed in the city's seeking of legal advice or guidance from the department of law shall not count in the calculation of the interest accrual date as set out herein. Receipt by the city of a final payment request invoice with all other conditions precedent required by the definition of complete and responsive invoice satisfied and an invoice date stated will commence the interest accrual date for a final payment based on the invoice date. With the exception of those steps set out in subsection (2) hereof, and except as provided in section 20-117(a), all steps necessary to process a final payment, subsequent to the receipt by the city of the complete and responsive invoice for such final payment, shall count as part of the interest accrual date calculation. (2) With respect to the tolling of the interest accrual date calculation for such final payment, the time elapsed in publishing for and holding final settlement pursuant to C.R.S. 38-26-107 or successor statute, the time elapsed from the tender by the city to the contractor of a final release on the final payment until the return of such release to the city, and the time elapsed in the city's seeking of legal advice or guidance from the department of law shall not count in the calculation of the interest accrual date as set out herein. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 775-07, § 54, 12-26-07; Ord. No. 604-12, § 5, 11-26-12; Ord. No. 39-20, § 42, 2-3-20)

Denver Revised Municipal Code § 20-113 Errors and disputes.

Sec. 20-113. - Errors and disputes. (a) Contractor disputes. Disputes arising between contractors and the city as a result of official, design professional, or consultant disapproval of invoices in contracts administered by the manager of transportation and infrastructure shall be resolved through the procedure set out in D.R.M.C. section 56-106. Disputes arising between contractors and the city that relate to construction projects performed by city agencies other than transportation and infrastructure upon assignment to such other agency by the mayor shall be resolved in accordance with the contract documents or with the dispute resolution mechanisms in place for the particular assigned contracting agency. Disputes arising between contractors and the city as a result of the disapproval of invoices in contracts administered by the manager of general services shall be resolved through the procedure set out in the contract bid documents or the informal bid procedures, as applicable. Disputes arising between contractors and the city as a result of the manager of finance's disapproval of approved invoices shall be resolved through procedures established by the manager of finance by rules and regulation. Disputes pertaining to prevailing wages shall be resolved pursuant to D.R.M.C. sections 20-76 through 20-79. Disputes between or among contractors and subcontractors arising out of the provisions of this article shall be resolved through a private right of action, which is hereby expressly authorized; provided that, such private right of action is not intended to grant and shall not grant subcontractor third-party beneficiary status in any contract between the city and a contractor. The city shall have no authority or obligation to adjudicate, enforce, determine, or otherwise participate in disputes between or among contractors or subcontractors arising out of the provisions of this article. (b) Internal disputes. Disputes regarding the allocation of interest and/or the amount assessed may be referred to the prompt payment arbiter. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 775-07, § 55, 12-26-07; Ord. No. 604-12, § 6, 11-26-12; Ord. No. 39-20, § 43, 2-3-20)

Denver Revised Municipal Code § 20-114 Interest assessment.

Sec. 20-114. - Interest assessment. (a) Interest shall be assessed and paid automatically with respect to an account payable commencing on the later of thirty-six (36) days after the invoice date or the date to which the interest accrual date is adjusted as set out herein, unless an unresolved dispute between the city and the contractor is pending. (b) The manager of finance is authorized to calculate interest due, charge the applicable appropriation, and automatically pay interest to the contractor at the time payment is made on the principal of any account payable. (c) Any interest paid by the city pursuant to this article shall be paid at the rate of one (1) percent per month on the unpaid balance of an approved invoice evidencing an account payable upon which interest is owing, until the invoice is paid in full, provided that if the calculated interest on a single such invoice is less than fifty dollars ($50.00), such interest shall not be payable by the city. (d) Pursuant to section 7.2.2 of the Charter, interest when payable under this section shall be subject to, limited to, and paid from, funds already appropriated, or identified in a fund not subject to appropriation. Funds for the payment of interest under this section shall be allocated and encumbered as determined by the manager of finance or as otherwise provided by law. (e) When federal, state or private grant regulations or statutes prevent the city from charging the federal, state or private funds with interest assessment, the city shall identify an alternative source to assess interest on late payments. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 1026-02, § 5, 12-16-02; Ord. No. 570-03, § 2, 7-14-03; Ord. No. 775-07, § 56, 12-26-07; Ord. No. 604-12, § 7, 11-26-12)

Denver Revised Municipal Code § 20-115 Reporting.

Sec. 20-115. - Reporting. (a) Within thirty (30) days after the city's books are closed for the previous calendar (or fiscal) year, the manager of finance shall create a report detailing the record of late payments and interest payments made by each department or agency pursuant to this article during the preceding year. This report shall include: (b) (1) The number and total dollar amount of late payments and interest payments by each department and agency, and city-wide: (2) The percentages that the dollar amount of late payments and interest payments represent of the total dollars spent on contracting for all goods and services of whatever kind by each department and agency, and city-wide; (3) Upon request, any department or agency affected by subsection (a) above shall submit recommendations for specific actions to reduce the incidence of late payments. (c) The manager of finance will make interest assessments and discount reduction amounts available to each department or agency on a monthly basis. (d) The manager of finance will make a presentation to city council regarding the previous year's interest assessments and discount reductions along with any department or agency affected, upon request from city council. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 775-07, § 57, 12-26-07; Ord. No. 604-12, § 8, 11-26-12)

Denver Revised Municipal Code § 20-116 Rules and regulations; internal guidelines.

Sec. 20-116. - Rules and regulations; internal guidelines. Rules and regulations and internal guidelines may be promulgated to effectuate the purposes of this article as follows: (1) The managers or directors of city agencies and departments may promulgate rules and regulations to effectuate the purposes of this article pertaining to contracts administered by, through or from their respective agency or department. (2) The auditor may promulgate rules and regulations to effectuate the purposes of this article pertaining to prevailing wages and the manager of finance may promulgate rules and regulations to effectuate the purposes of this article pertaining to payment to contractors. (3) All such rules and regulations shall be consistent and harmonious. Nothing contained in this article shall preclude the auditor or the manager of finance from taking actions pursuant to sections D.R.M.C. 20-76 through 20-79 at any time as either deems necessary. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 775-07, § 58, 12-26-07; Ord. No. 604-12, § 9, 11-26-12)

Denver Revised Municipal Code § 20-117 Miscellaneous.

Sec. 20-117. - Miscellaneous. (a) Nothing contained in this article shall preclude the city from retaining without payment of interest project funds to cover project retainage as mandated by law and/or general or special conditions of construction, as applicable, by C.R.S. section 24-91-101 et seq., or by other terms or conditions of the contract at issue, or to cover claims filed pursuant to C.R.S. section 38-26-107 by subcontractors or suppliers on a construction, reconstruction or remodeling project. Nothing contained in this article shall preclude the city from offsetting against a contractor, without payment of interest, amounts under a contract for payment of duly assessed liquidated damages by the city pursuant to general or special conditions or other terms or conditions of a construction, reconstruction or remodeling contract, or for other offsets against a contractor by the city based upon breach or default of a contract by such contractor. (b) Notwithstanding anything otherwise contained in this article, neither the city nor any contractor or subcontractor shall have any obligation to pay interest when: (1) Payment by the city of a progress payment is subject to and contingent upon appropriation or payment by the city of funds and reimbursement of such funds from the state or federal government, which reimbursement has not occurred on or before the interest accrual date; (2) The amount requested under an invoice is subject to a dispute by the city upon which the city has prevailed against the contractor, and the city has otherwise not delayed payment beyond the interest accrual date; (3) The city, pursuant to a dispute with a contractor, has set off and retained funds which would otherwise be payable to the contractor; (4) The terms of the contract or subcontract, as applicable, specify other times and methods of payment or methods of resolving disputes or interest owed on delinquent payments; (5) There is a bona fide dispute between a contractor and a subcontractor or between subcontractors concerning the supplies, materials or equipment delivered or the services performed which causes the payment to be late; (6) Funds which would be payable to a contractor are subject to a writ of garnishment or other lawful claim, lien or levy; or (7) The city has been ordered by a court of competent jurisdiction not to pay funds to a contractor. (8) The contractor has a current credit balance in favor of the city on the city's account which exceeds the amount due to the contractor. (c) Nothing in this article shall preclude the city from withholding from a contract payment to a contractor any amount required by a writ of garnishment or other writ or order issued by a court of competent jurisdiction against said contractor. The manager of finance is authorized to charge five dollars ($5.00) against any contract payment to a contractor to offset the costs of processing and complying with a writ of garnishment or any other writ or order issued by a court of competent jurisdiction against said contractor. All fees collected shall be paid to the treasurer and credited to the general fund. (Ord. No. 1121-01, § 1, 12-26-01; Ord. No. 70-05, § 2, 2-7-05; Ord. No. 775-07, § 59, 12-26-07; Ord. No. 604-12, § 10, 11-26-12)

Denver Revised Municipal Code § 20-118 Reserved.

Source: City and County of Denver, Revised Municipal Code and Charter (Municode Library, library.municode.com)URL: https://library.municode.com/co/denver/codes/code_of_ordinances?nodeId=TITIIREMUCO_CH20FI_ARTVIIPRPACOVESUGOSELECIFetched: 10/27/2026