As someone who deals with federal government contracts, I regularly see pay-when-paid provisions within. That means our time to pay a subcontractor or vendor starts once we receive payment from the prime contractor or government. Big projects whose timeline spreads across months are billed monthly based on progress, the government agrees with the schedule of values and progress on each line item, and then issues payment. The subcontractors' work would be included in that billing, so there would be enough money to cover everybody's expenses for the last month. A contractor generally doesn't bankroll the whole thing out of pocket when payments are delayed from the government.

That's federal. Municipal would have different laws and the city itself might have specific provisions in their contracts. But if the 7-day deadline starts when Metra receives payment from the City, and Metra is being kicked out for not meeting their sub payment deadlines, then that means that the city paying them late has nothing to do with their own late payments to subs.

They should also have been required to carry a payment bond to ensure that subs get paid regardless of financial circumstances affecting the prime.