Prompt Payment Act

The Prompt Payment Act is a U.S. law aimed at ensuring timely payment for goods and services provided to the government. It requires federal agencies to pay contractors and suppliers within specified timeframes—usually within 30 days of receiving a proper invoice. If payments are late, the government must pay interest on the overdue amount. This law helps ensure that businesses, especially small ones, maintain cash flow and encourages fairness in government contracting, promoting good relationships between the government and its suppliers.