Although Verizon’s payment term for construction contractors has been 30 days in past master service agreements (MSA), according to preliminary data obtained by Wireless Estimator in its active Terms of Payment Survey, the carrier has been pressuring contractors to accept 90 days.
Most companies are pushing back, but a smaller segment of contractors said they are accepting the delayed payment terms in order to continue to serve the carrier. A review of those companies indicates that they are mostly smaller contractors.
In a two-day period last week, 166 wireless contractors completed the extensive first industry-supported survey and many of the 107 companies who perform work for Verizon identified that the nation’s largest carrier with 116.5 million customers is pushing them to accept 90-day payment terms when their MSA comes up for renewal.
Ninety days is Verizon’s stated term for a general services agreement.
According to the survey’s company information, of the 107 submittals, 94% were contractors, but almost 40% of them had payment terms of 90 days, with only 20% receiving the more favorable term of 30 days that Verizon, to shore up weakening relationships, implies that they are giving to contractors.
One contractor informed Wireless Estimator that they had two MSAs with Verizon, one for their construction work and the other for site acquisition services.
Another turnkey wireless contractor said that Verizon required terms of 90 days upon their MSA renewal, but they were currently negotiating with them to bring it down to 30 days.
“In the past, we provided some services for them that would fall under their general services MSA, but the greater portion of our work is construction work, and we can’t afford to wait 90 days for projects that are mostly labor intensive,” the company owner said.
A common thread of concern regarding Verizon was why general services work should be penalized with longer payment terms since much of those professional services require companies to pay their employees immediately, but they were being strung out by the carrier for 90 days – oftentimes reaching 120 days or more following invoicing and closeout documentation hurdles.
“Even though our construction MSA clearly stated 30-day payment terms, the POs were being issued with 90-day terms. I had to fight tooth and nail with Verizon to get our PO terms changed back to 30 days,” said the owner of a mid-sized contracting firm.
A Verizon construction manager informed Wireless Estimator last week that his contractors are paid within 30 days.
An Ariba-generated Verizon purchase order for another contractor who had a similar issue regarding payment terms provided the following notice attached to his PO:
“03-AUG-2018 – Effective immediately, all undisputed invoices will be paid by Verizon within 90 days of receipt, unless Verizon has agreed to different payment terms in writing. The Verizon Terms and Conditions governing Purchase Orders have been updated to reflect these new payment terms. Please send inquiries to VZ.GPO.PAYMENT.TERMS@verizon.com.”
Verizon did not respond to a Friday request to discuss their payment terms.
Contractors are being encouraged to complete the Terms of Payment Suvey.
“This is a significant issue and one of the most pressing problems affecting the companies who have boots on the ground. NATE is adamant that we have to address it collectively as an industry, otherwise, this has the potential to significantly hamstring the deployment of 5G networks in the United States. The survey is an excellent tool to explore it further,” said National Association of Tower Erectors Executive Director Todd Schlekeway following the release of the survey last week.
Wireless Estimator is working with industry association leaders and company executives to address payment terms and other issues with carriers and tower owners. An awareness campaign will be announced next week.