Stored materials billing in Texas: build a supported payment request

Check billability before ordering the packet

A Texas electrical subcontractor has purchased switchgear, but the equipment will remain at a warehouse until the site is ready. Cash has left the business while installation revenue is still weeks away. The office wants to bill the purchase now. Its first task is to confirm whether the subcontract permits that request, not to label the supplier invoice as completed work.

Texas Property Code Section 28.002 addresses qualifying private-project payment requests involving properly performed work and suitably stored or specially fabricated materials, subject to the contract and statutory withholding. It does not make every purchase reimbursable or give every subcontractor an automatic 35-day payment deadline. Public projects and upstream receipt-based payment rules require separate analysis.

Keep this guide focused on the billing evidence. It does not decide lien entitlement, ownership, insurance coverage or a statutory deadline. For the separate billing-month record, use the work-month tracking guide.

Separate site storage from warehouse storage

AIA Contract Documents explains that its A201 approach treats appropriately stored site materials differently from off-site materials. Under the cited A201 discussion, off-site payment involves advance owner approval, an agreed written location and protection of the owner’s interest, including title arrangements, insurance and transportation. These are conditions in a particular contract framework; confirm the version and terms actually incorporated into your job.

A warehouse address alone cannot answer whether equipment belongs to this project. Identify serial numbers, quantities, pallet labels and the applicable purchase order. Keep unrelated stock outside the packet. If the approved location changes, obtain the required authorization before presenting the new location as compliant.

Build a material-by-material evidence index

Use a short index that lets the reviewer match the request to the item without searching several email chains. The following is an original office checklist, not a universal legal requirement or a substitute for the project’s submission instructions.

• List each attachment with a date and version.
• Ask the designated reviewer which evidence is missing before the billing cutoff.
• Protect supplier banking details and other unrelated private information.

Worked example: installation must not bill the purchase twice

Illustrative assumptions: the contract permits this storage request; all required approvals are complete; a $40,000 schedule-of-values line includes $12,000 of supported stored material. In the first billing, installed work is $0 and stored material is $12,000. The combined completed-and-stored value is therefore $12,000 before any contract-specific retainage or other adjustment.

At the next cutoff, the same material is installed. For this simplified example, no additional billable labor or material has been earned. Move $12,000 from stored to installed: the combined cumulative value remains $12,000. The transfer alone creates no additional earned amount. Where installation adds separately supported labor, include that new value in the appropriate line rather than billing the old material again.

• Reconcile cumulative earned value, retainage and prior certificates separately.
• Do not treat previous cash receipts as interchangeable with previous amounts certified or billed.
• Review the schedule-of-values example for the broader progress-billing reconciliation.

Record damage, returns and movement after the request

An approved billing packet is a snapshot. Keep a movement log when the material is delivered, installed, returned, replaced or moved between approved locations. A missing item or a supplier credit should trigger a reconciliation; leaving the original balance untouched can overstate both the project inventory and the amount supported for billing.

Example: a $1,200 item in the stored-material schedule is returned before the next request. Record the return ticket and supplier credit, identify the prior billing line and ask the reviewer how to present the adjustment. Do not silently delete the original evidence. Connect the correction to its history using the delivery-ticket workflow.

Submit a clear request and preserve the response

Use the project’s required portal or delivery channel, include the evidence index and retain the submission confirmation. If a request is reduced or rejected, ask for the item, amount and reason affected. A storage-location issue calls for different follow-up from a price discrepancy or an unresolved title requirement.

Track who owns the next action and the promised review date. A statement such as “the warehouse is approved” should point to the actual approval record. If you cannot support an amount yet, identify it as pending instead of burying it inside a certified total. Separately maintain the project facts needed for professional notice review.

Stored-materials billing questions

Can off-site material always be billed? No. The applicable agreement, approvals and evidence control the request. A supplier receipt by itself does not prove compliance.

Does installing previously billed material create a second material charge? No. In the worked example, the classification changes while cumulative material value stays the same. Additional earned work requires its own support.

Should storage costs and insurance be included automatically? No. Follow the pricing and allocation terms of the agreement. The example deliberately excludes tax, storage charges, freight and retainage calculations.

Is this a specially fabricated materials notice guide? No. Billing support and any special notice obligations are separate. Use the specially fabricated materials overview and obtain project-specific advice.