Heavy Civil Contractor Eliminates Bond Claims Across 30+ Subs

A Midwest heavy civil contractor operating across three states was averaging three to four payment-bond claims per year from lower-tier subs and suppliers. Each claim cost an average of $145K and compounded the firm's surety relationship. The root cause was invisible: money was paid to prime subs on time, but the firm had no visibility into whether funds were flowing down to the second and third tiers.

Subcontractor Audit was deployed across active projects with full lien-waiver chain tracking by tier. Every pay-app approval generated the conditional waiver at the prime level and opened the required unconditional waiver chain down to suppliers. Lower-tier payment anomalies — late payments relative to contractual terms — surfaced as signals long before they escalated to claims.

Joint-check arrangements and fund-control measures were triggered automatically when configured risk thresholds were crossed. The operating team owned the chase; the GC's AP team owned the decision on whether to route funds direct to the lower tier.