CLOSING THE LOOPHOLE: ARIZONA ADDS PROMPT PAY PROTECTIONS TO REVITALIZATION DISTRICTS
Arizona contractors operating in public and quasi-public sectors sometimes rely on Prompt Pay statutes to help maintain cash flow. However, a statutory loophole created risk for civil and infrastructure contractors when working for Revitalization Districts—special taxing entities utilized by municipalities to help finance roads, utilities, drainage systems, and other public infrastructure needs.
When Revitalization Districts faced internal funding delays or bureaucratic standstills, contractors could find themselves stuck between slow or no payment and having to self-finance and continue performance, under the threat of default or claims from higher tiers. That risk was significantly reduced on June 22, 2026, when the Governor signed Senate Bill 1189 into law. Protections of Arizona Prompt Pay Statutes are now available for Revitalization District projects.
Prime contractors now have statutory rights to suspend or entirely terminate work if a Revitalization District fails to issue timely payments, provided the contractor delivers a formal seven-day written notice. Subcontractors receive parallel protections, also with required written notice. This added protection does not necessarily trump your contract requirements, which may still be enforceable depending on your situation.
Also under these statutory changes, contractors cannot be deemed in breach of contract for executing a lawful work stoppage. There is also a provision allowing a prevailing party to recover attorneys fees for successful enforcement.
Moving forward, contractors bidding on Arizona infrastructure projects funded by local taxing districts can proceed knowing that their right to timely payment is now better protected.
Government Contract Claims: When Appeal is Rejection of Settlement
Without a reservation of rights, appealing a Contracting Officer’s Final Decision is a rejection of any offer of payment or settlement included therein. So, the contractor had only three options.
Linking Obligations
If you want to bind the subcontractor to the prime in every way the same as the prime is bound to the owner, then the incorporation clause of the subcontract should be: . . .
Termination of Government Contracts for Convenience (T4C)
Imagine you’re a Government Contractor under a firm, fixed-price contract and you’ve done nothing wrong. Nevertheless, the Government has decided to unilaterally end its contract with you. Yes, the Government can do this...
Government Contractors: Build a Snowman in August
As a Government Contractor, when have you agreed to perform a certain way, but later realized that another way is better for everybody? When the Government agrees, expressly or impliedly, to the alternative performance, it waives a credit for the unperformed work.
Construction Dispute Settlement: Dealing with Details
Reap the benefits of settling a construction dispute by doing these things.
E-mail Signature Not Enough to Certify a Claim
Construction project professionals routinely send e-mails with “signatures,” which typically include the sender’s typewritten name, title, contact information, and/or company logo. But, this sort of e-mail “signature” is not enough to certify a claim to the Government.
Government Contractors: Ask for a “Sum Certain” in Your Claim
If your Claim includes an item for damages with an amount “TBD,” you could lose the entire Claim.
Contractors: Be Aware When Contracting with Virginia Public Agencies
Without a valid contract, a Virginia public entity has no duty to to pay for any of your work.
Constructive Acceleration
Contractors know that time is money. So, the point is clear when expressly told to “Speed Up! Go Faster!”
But, what do you […]
