What a coincidence that this question about payment of our
 subcontractor's invoices is raised by the discussion group.
 I, too, am evaluating our policies in view of the State of
 California's insistence that they withhold 10% from each
 invoice on a contract I'm negotiating.  The withheld amount
 is to be released when the University, as the prime
 contractor, "satisfactorily completes the scope of work and
 deliverables."  I have added as much specific detail about
 acceptability as possible, and I have even been able to get
 them to agree to release part of the funds upon completion
 of one major deliverable.  But, that doesn't minimize the
 risk very much on this $1 million contract.

 UCI has been burned once and I'm hesitant to assume all
 liability when our subcontractor is a major part of the
 project.  Therefore, I am considering withholding a similar
 amount from the subcontractor's invoices until the very end,
 and think it is appropriate in this case.  Ordinarily, UCI
 pays the full invoice.  I'm interested in seeing other
 opinions on this.

     Christina Hansen, Director
     Office of Contract & Grant Administration
     University of California Irvine
     xxxxxx@UCI.EDU