Upper Hudson Holdings

Hudson Construction Services, LLC provides funds administration services to the construction and surety industries.  Funds disbursement management is a valuable tool for contractors to secure or increase their bonding capacity by providing third-party receipt and disbursement of funds to help ensure the satisfactory completion of a project contract.  As a wholly-owned subsidiary of Upper Hudson Holdings, Hudson Construction Services’ mission is to minimize financial losses in the construction and surety industries, while maximizing contractor performance through the utilization of its funds administration services and extensive construction management experience.

The Contractor benefits by gaining the opportunity to pursue and win contracts for which they would not otherwise qualify due to the lack of bonding.  Funds administration services provides risk mitigation to project owners (bond obligees) and sureties, thus increasing the likelihood of the contractor obtaining bonding capacity and being awarded jobs.  In some cases, the contractor may find that project owners are more agreeable with their payment terms and release of retainage knowing that there is funds administration in place.  In addition, the contractor may utilize the existence of funds management to negotiate more favorable credit terms or discounts from subcontractors and suppliers since there is a higher degree of timeliness in the flow of funds and payments.  With Hudson Construction Services administering the receipt of funds and payment of project costs, the contractor may also be able to reduce its overhead and increase project profitability.

The Process

Although not all contractors and construction jobs are identical, the typical funds administration process flows as outlined below.  With the principals of Hudson Construction Services (HCS) having extensive construction and development backgrounds, the company understands that the prompt and timely payment to suppliers and subcontractors is critical to the success of the contractor and the satisfactory completion of the project.  HCS is committed to working with contractors in making sure that the funds administration process is as smooth and expeditious as possible. 

• Contractor executes Funds Administration Agreement and provides HCS with a job cost breakdown or project budget.
• Contractor delivers a irrevocable letter of direction to the project owner or general contractor (GC), which instructs them to direct all job proceeds to HCS.
• Contractor performs the work on the project and invoices the project owner or GC as it would with any other job.  However, when the progress payment is approved by the owner or GC, it will direct payment to HCS.
• Upon the receipt of each funding from the project owner or GC, an email will be sent to the contractor.  In addition, when funds are disbursed to the contractor or its suppliers or subcontractors, an email confirmation is sent to the contractor.
• Funds are held specifically for each project, and each job is tracked and accounted for separately.
• After funds are received and upon receipt of a payment request from the contractor, checks are issued for designated disbursements to the contractor and its suppliers and subcontractors pursuant to the job cost breakdown and draw schedule.
• In general, anticipated profit and overhead will be disbursed to the contractor based on a fixed amount or percentage that has been agreed upon in advance.  In addition, amounts to be funded for the contractor’s equipment or its affiliates will be agreed upon in advance.
• To ensure timely disbursement of funds, it is critical that the contractor submits a complete set of payment request documents in advance of the time funds are received from the project owner or GC.  Disbursement of funds can typically be processed with checks issued within 2-4 days of receipt of the funds and required payment request documentation.
• Once disbursements have been made, the contractor is responsible for obtaining the appropriate lien releases before the next payment request.
• Upon the completion of each disbursement, HSC will issue a report to the contractor detailing all payments and the status of all funds on deposit.

Fees

The fee or funds administration services is borne by the contractor and in many cases, can be incorporated into the cost of a project.  The fee is a fixed percentage of the total contract amount and is paid over the term of the project as contract funds are received from the project owner.

For any questions, please contact:

Hudson Construction Services, LLC

4446 State Route 42, Suite B

Monticello, NY 12701

(845) 791-6700

(845) 794-5333

fundsmanagement@upperhudson.com