Getting Paid on Federal Work: The Prompt Payment Act
When the government must pay your invoices, and how to keep proper invoices from being rejected.
Cash flow is the difference between a profitable contract and a crisis. The Prompt Payment Act sets time limits for the government to pay proper invoices, but it only protects you if your invoice is correct and submitted the right way.
The basics
- Submit invoices through the system the contract names — often an online invoicing platform tied to receiving reports.
- An invoice must contain the required elements: contract number, dates, amounts, and supporting detail.
- Payment is generally due within 30 days of receipt of a proper invoice and acceptance of the work.
- If the government pays late without a good reason, interest can accrue.
Common causes of delay
Most late payments are not disputes; they are administrative. Missing acceptance, an incomplete invoice, or a missing receiving report stalls everything. Track each milestone, follow up with the contracting officer's representative, and keep written records of submission dates.
Protect your subs
On construction, your payment bond and subcontract terms set your own payment obligations. Good practice flows down: pay subcontractors promptly once you are paid.
General information for construction small businesses, not legal advice.