Bill summaries are authored by CRS.

Shown Here:
Passed House amended (07/26/1988)

(Measure passed House, amended, roll call #238 (394-0))

Prompt Payment Act Amendments of 1988 - Revises Federal law to provide that for purposes of determining a payment due date and the date upon which any late payment interest penalty shall begin to accrue, the head of a Federal agency is deemed to have received an invoice on the later of: (1) the date on which the designated place or person of an agency actually receives it; or (2) the seventh day after the date on which a property is actually delivered, or final performance of a service is actually completed, unless the contract specifies otherwise or the agency has accepted such property or services before such seventh day.

Provides that the agency is deemed to receive an invoice on the date of the invoice, if the agency has failed to annotate the invoice with the date of receipt at the time of receipt. Declares that a payment is deemed to be made on the date a check for payment is dated or an electronic fund transfer is made.

Makes Federal prompt payment provisions applicable to the United States Postal Service. Makes the Postmaster General responsible for issuing procurement regulations, solicitation provisions, and contract clauses.

Declares that the interest rate to be used in computing a late payment interest penalty is the rate in effect on the date the interest begins to accrue.

Eliminates grace periods for payment of interest penalties.

Requires an agency to pay an additional interest penalty if: (1) the agency owes the interest penalty; (2) the interest penalty is not paid to the business concern on or after the date the penalty is due; (3) the agency does not pay the penalty within ten days after such payment is made; and (4) a written demand is made within 40 days after such payment is made.

Provides for interest payments on certain agricultural loan and price support payments if their prompt payment is not made.

Requires regulations on interest penalties, in the case of dairy products, fats, oils, or food products prepared from edible fats or oils, to provide a required payment date of not later than ten days after the date on which a proper invoice for the amount due has been received by the agency acquiring such products.

Requires regulations on interest penalties to provide for periodic payments in the case of property or service contracts upon: (1) the submission of an invoice for supplies delivered or services performed; and (2) acceptance of supplies or services by an authorized employee or a determination by such employee that the performance conforms to the contract.

Requires regulations on interest penalties, in the case of construction contracts, to provide for the payment of interest on: (1) progress payments due for more than 14 days, or a longer period if required to afford the Government an opportunity to inspect the work and adequacy of the contractor's performance; and (2) amounts retained during the performance of a contract, if such amounts are not paid by the required payment date. Sets forth substantiation and certification requirements for a construction contractor when making a progress payment request.

Establishes the method of computing interest penalties chargeable against a construction contractor when the contractor is in possession of unearned amounts or withheld progress payments.

Requires regulations on interest penalties to: (1) require that defective invoices be returned to the vendor not later than seven days after their receipt, and that agencies not be charged for the excess time in reviewing a defective invoice; (2) permit agencies to make payments prior to the required payment date; and (3) prescribe methods for computing certain interest penalties.

Provides that for the purpose of determining interest penalties on discount payments, the time shall be determined from the date of the invoice.

Requires a prime contractor under a construction contract to notify an agency of any deficiencies in its performance under a construction contract discovered after a request for payment has been made and to pay interest on the unearned funds until the deficiency is corrected or the unearned funds returned to the agency. Requires the prime contractor to include a payment clause in its subcontracts specifying that a late payment interest penalty would be paid if the prime contractor paid the subcontractor later than seven days after receiving payment from the agency under the contract. Requires all subcontracts under a construction contract awarded by an agency to include a payment clause and interest penalty clause. Recognizes the right of subcontractors to negotiate provisions governing withholding and retainage.

Establishes procedures for a prime contractor in the event a deficiency in subcontractor performance is discovered after the prime contractor has issued a certified payment request to the agency. Prescribes information to be included in a written notice concerning any withholding. Requires the prime contractor, after payment to a subcontractor has been withheld, to certify to the agency that the subcontractor is entitled to such amount.

Declares that the United States shall not be a party to any dispute between the prime contractor and the subcontractor relating to such payments or a late payment interest penalty under a subcontract clause. Declares that the United States may not be interpleaded in any judicial or administrative proceeding involving such a dispute. Declares that a prime contractor's obligation to pay an interest penalty to a subcontractor may not be construed to be an obligation of the United States.

Revises agency reporting requirements on interest penalty payments to include a description of agency payment practices.

Requires the modification of the Federal acquisition regulation to implement Federal prompt payment provisions.

Amends the Small Business Act to require the Office of Small and Disadvantaged Business Utilization to assist small business concerns to obtain payments, late payment interest penalties, or information due to such concerns in conformity with this Act.

Amends the Supplemental Appropriations Act, 1984 to codify the definition of meat and meat food products.