The Federal Highway Administration (FHWA) recently issued a memorandum to states clarifying its policy on the use of joint checks for payments to subcontractors as part of the disadvantaged business enterprise (DBE) program.
By the use of joint checks, FHWA is referring to a situation where the prime contractor issues a check jointly to a DBE subcontractor and a supplier of material to the DBE. The policy clarification indicates that FHWA will continue to allow this practice if the following conditions are met:
1) The prime contractor acts solely as a guarantor;