With the subcontractor feature in Costpoint, you can track insurance, bond, and lien information at the vendor level.
In Costpoint, the word "subcontractor" identifies those workers who are performing work for your company where part of their obligation as a vendor is to obtain and maintain a certain insurance and/or bond status. In addition, some vendors may need to prove that their work is free of any liens (legal claims) before payment is released. The term "subcontractor" in Costpoint does not identify all workers who are independent contractors or temporary workers.
Before you activate a vendor as a subcontractor, you need to meet with your company's contract administrator or project manager to discuss the vendor's status for liens, insurance, and bonds. When you activate the subcontractor function, Costpoint makes extra validations before payment can be released, but makes an exception for manual checks. Costpoint assumes that you are entering the check information after you write and send the check; it is impossible to hold a payment that has already been made.
If you activate the subcontractor function for vendors that do not require it, you could unnecessarily delay processing of your payables. For vendors who have both subcontractor status and normal vendor status, Deltek recommends that you create two separate vendor accounts.
When reviewing subcontractor information, remember that the voucher vendor, rather than the pay vendor, will be compared before payment is allowed.
A lien is a legal claim against another's property. Business liens are often for construction or other large projects.
For example: Bigg Company needs a new office and is using C Construction Company to build the office. C Construction needs lighting fixtures and goes to S Supplies. S Supplies allows C Construction to take a large quantity of supplies with the understanding that C Construction will pay as soon as the job is finished. If C Construction does not pay, in some circumstances S Supplies could place a lien against Bigg's new office. C Construction promised to make payment to S Supplies for the supplies, but Bigg has possession of, and is enjoying the use of, the light fixtures. This lien means that Bigg does not completely own its new office; S Supplies, since it is still owed payment, owns part of the office.
If a lien is placed against one of your company's projects, your contract administrator or project manager is notified. With the information that you obtain from your contract administrator or project manager, enter the information on the Liens subtask of the Subcontractor Payment Control block on the Manage Vendors screen. In the Effective Date field, you enter the first date of lien enactment. The Released field defaults to N for not released. You cannot make payments while this lien is in effect for the specific vendor/project combination.
For liens only, Costpoint allows only one form of vendor/project combination. After you use a vendor with any portion of a project number, either at a lower level (more specific project) or at a higher level (more general project), you cannot reuse it. Example: After vendor AAA is matched with project 1000.001.002 on a lien, you can never pair AAA with any other form of project 1000 for lien purposes.
Before payment is released, Costpoint checks the Liens subtask of the Subcontractor Payment Control block on the Manage Vendors screen. To release payments for a vendor/project combination, change the Released field from N to Y. Then enter the date you have received from your contract administrator or project manager in the Released Date field.
Before payment is released, Costpoint first validates any liens, then validates insurance and bonds.
Use the information that you receive from your contract administrator or project manager to complete the following information in Costpoint:
Identify the vendor as a subcontractor on the Subcontractor Payment Control block of the Manage Vendors screen. You can select any one of the options (Invoice, Invoice Period of Performance, or Payment Selection). Comparison dates are not used for liens. If a vendor has a lien currently in effect, payments are held.
On the Liens subtask of the Subcontractor Payment Control block, review existing vendor and project lien links. Add new lines to complete the data for the Lien Information table.
When your contract administrator or project manager alerts you that the lien was released, return to the Liens subtask of the Subcontractor Payment Control block. Retrieve the vendor and project. Change the Released field to Y, enter the Released Date, and save the screen.
Depending on the type of product or service that you are buying, your subcontractor may be required to obtain insurance coverage. Five types of insurance are preset in Costpoint: Automobile, Excess Liability, General Liability, Umbrella, and Worker's Compensation.
Your contract administrator or project manager will have copies of your subcontractor's insurance information. From this information, you can complete:
The Manage Insurance Carrier Information screen, and
The Insurance subtask of the Subcontractor Payment Control block on the Manage Vendors screen.
When you select the Required for Payment check box on the Subcontractor Insurance subtask and Costpoint finds that the system date (today's date) falls within the required start date and required end date, Costpoint will not release a vendor payment unless the system date falls within the insurance effective date and expiration date.
While not all fields are required, Deltek recommends that you store as much information as possible on these policies.
Use the information provided by your contract administrator or project manager to complete the following information in Costpoint:
Identify the vendor as a subcontractor on the Subcontractor Payment Control block of the Manage Vendors screen. Choose which date(s) will be used when checking insurance coverage.
Create or use an existing insurance carrier ID on the Manage Insurance Carrier Information screen.
Link the vendor, project, and type of insurance required on the Insurance subtask of the Subcontractor Payment Control block of the Manage Vendors screen. If the type of insurance required is not among the five predefined types, create the insurance type on the Manage Subcontractor Insurance Types screen.
Include the policy requirement dates on the Insurance subtask of the Subcontractor Payment Control block. Use the Required for Payment check box to specify whether or not to hold vendor payments if insurance coverage is not maintained. Selecting this check box activates all the validation steps when you pay this vendor.
Two types of bonds are predefined in Costpoint: Bid and Performance. While an insurance policy promises reimbursement if something goes wrong, a bond promises reimbursement if an agreement is not fulfilled or a promised payment is not made.
In our previous example, a bond would probably exist for the construction of the new Bigg office; if C Construction Company was unable to complete the work, the bond would cover Bigg's cost of a broken agreement for office construction.
Your contract administrator or project manager will have copies of your subcontractor's bond status. From this information, you can complete the Bonds subtask of the Subcontractor Payment Control block on the Manage Vendors screen. When you select the Required for Payment check box in the Maintain Subcontractor Bonds screen and Costpoint finds that the system date (today's date) falls within the required start date and required end date, Costpoint will not release a vendor payment unless the system date falls within the bond effective date and expiration date.
While not all fields are required, Deltek recommends that you store as much information as possible on any subcontractor bonds.
Use the information you received from your contract administrator or project manager to complete the following information in Costpoint:
Identify the vendor as a subcontractor in the Subcontractor Payment Control block of the Manage Vendors screen. Choose which date(s) will be used when comparing bond coverage.
Link the vendor, project, and type of bond required on the Bonds subtask of the Subcontractor Payment Control block of the Manage Vendors screen. If the type of bond required is not among the two already loaded into Costpoint (Bid or Performance), you can create the bond type on the Manage Subcontractor Bond Types screen.
Include the bond requirement dates on the Bonds subtask of the Subcontractor Payment Control block. Use the Required for Payment check box to specify whether or not to hold vendor payments if bond coverage is not maintained. Selecting this check box activates all the validation steps when you pay this vendor.
Insurance policies and bonds are tracked by voucher vendor and project name.
The different combinations of voucher vendor, project, and insurance policy type can exist on only one screen. If you have a new insurance policy to enter for a vendor/project, insert a new line.
The different combinations of voucher vendor, project, and bond type can exist only on one screen. If you have a new bond to enter for a vendor/project, insert a new line.
When you select the Required for Payment check box (for an insurance policy or bond), Costpoint performs further validations to ensure that the project's sublevels maintain insurance and/or bonds. The validations never look at project levels above the selected level, only below.
For example: Your vendor is C Construction and your project number is 100.222.333. If you select the Required for Payment check box:
All numbers above this level (such as 100.222.332 and 100.221.333) will not require coverage.
All numbers equal to or below this level (such as 100.222.334 and 100.222.333.1) will require coverage.
For liens only, Costpoint allows only one form of vendor/project combination. After you use a vendor with any portion of a project number, either at a lower level (more specific project) or at a higher level (more general project), you cannot reuse it. Example: Vendor AAA and Project 1000. After you match AAA with 1000.001.002 on a lien, you can never pair AAA with any other form of project 1000 for lien purposes.