Title 31 — Money and Finance
Chapter 39 — Prompt Payment
§ 3903. Regulations
Statutory text
The Director of the Office of Management and Budget shall prescribe regulations to carry out section 3902 of this title. The regulations shall—
provide that the required payment date is—
the date payment is due under the contract for the item of property or service provided; or
except as provided in paragraphs (10) and (11), 30 days after a proper invoice for the amount due is received if a specific payment date is not established by contract;
for the acquisition of meat or a meat food product (as defined in section 2(a)(3) of the Packers and Stockyards Act, 1921 (7 U.S.C. 182(3))), including any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product, or of fresh or frozen fish (as defined in section 204(3) of the Fish and Seafood Promotion Act of 1986 (16 U.S.C. 4003(3)), provide a required payment date of not later than 7 days after the meat, meat food product, or fish is delivered; and
for the acquisition of a perishable agricultural commodity (as defined in section 1(4) 1 of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a(4))), provide a required payment date consistent with that Act;
for the acquisition of dairy products (as defined in section 111(e) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502(e)), the acquisition of edible fats or oils, and the acquisition of food products prepared from edible fats or oils, provide a required payment date of not later than 10 days after the date on which a proper invoice for the amount due has been received by the agency acquiring such dairy products, fats, oils, or food products;
require periodic payments, in the case of a property or service contract which does not prohibit periodic payments for partial deliveries or other contract performance during the contract period, upon—
submission of an invoice for property delivered or services performed during the contract period, if an invoice is required by the contract; and
either—
acceptance of the property or services by an employee of an agency authorized to accept the property or services; or
the making of a determination by such an employee, that the performance covered by the payment conforms to the terms and conditions of the contract;
in the case of a construction contract, provide for the payment of interest on—
a progress payment (including a monthly percentage-of-completion progress payment or milestone payments for completed phases, increments, or segments of any project) that is approved as payable by the agency pursuant to subsection (b) of this section and remains unpaid for—
a period of more than 14 days after receipt of the payment request by the place or person designated by the agency to first receive such requests; or
a longer period, specified in the solicitation, if required to afford the Government a practicable opportunity to adequately inspect the work and to determine the adequacy of the contractor’s performance under the contract; and
any amounts which the agency has retained pursuant to a prime contract clause providing for retaining a percentage of progress payments otherwise due to a contractor and that are approved for release to the contractor, if such retained amounts are not paid to the contractor by a date specified in the contract or, in the absence of such a specified date, by the 30th day after final acceptance;
require that—
each invoice be reviewed as soon as practicable after receipt for the purpose of determining that such an invoice is a proper invoice within the meaning of section 3901(a)(3) of this title;
any invoice determined not to be such a proper invoice suitable for payment shall be returned as soon as practicable, but not later than 7 days, after receipt, specifying the reasons that the invoice is not a proper invoice; and
the number of days available to an agency to make a timely payment of an invoice without incurring an interest penalty shall be reduced by the number of days by which an agency exceeds the requirements of subparagraph (B) of this paragraph;
permit an agency to make payment up to 7 days prior to the required payment date, or earlier as determined by the agency to be necessary on a case-by-case basis;
prescribe the methods for computing interest under section 3903(c) 1 of this title;
for a prime contractor (as defined in section 8701(5) of title 41) that is a small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632)), to the fullest extent permitted by law, require that the head of an agency establish an accelerated payment date with a goal of 15 days after a proper invoice for the amount due is received if a specific payment date is not established by contract; and
for a prime contractor (as defined in section 8701(5) of title 41) that subcontracts with a small business concern (as defined under section 3 of the Small Business Act (15 U.S.C. 632)), to the fullest extent permitted by law, require that the head of an agency establish an accelerated payment date with a goal of 15 days after a proper invoice for the amount due is received if—
a specific payment date is not established by contract; and
such prime contractor agrees to make payments to such subcontractor in accordance with such accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to such subcontractor.
A payment request may not be approved under subsection (a)(6)(A) of this section unless the application for such payment includes—
substantiation of the amounts requested; and
a certification by the prime contractor, to the best of the contractor’s knowledge and belief, that—
the amounts requested are only for performance in accordance with the specifications, terms, and conditions of the contract;
payments to subcontractors and suppliers have been made from previous payments received under the contract, and timely payments will be made from the proceeds of the payment covered by the certification, in accordance with their subcontract agreements and the requirements of this chapter; and
the application does not include any amounts which the prime contractor intends to withhold or retain from a subcontractor or supplier in accordance with the terms and conditions of their subcontract.
The agency shall return any such payment request which is defective to the contractor within 7 days after receipt, with a statement identifying the defect.
A contract for the procurement of subsistence items that is entered into under the prime vendor program of the Defense Logistics Agency may specify for the purposes of section 3902 of this title a single required payment date that is to be applicable to an invoice for subsistence items furnished under the contract when more than one payment due date would otherwise be applicable to the invoice under the regulations prescribed under paragraphs (2), (3), and (4) of subsection (a) or under any other provisions of law. The required payment date specified in the contract shall be consistent with prevailing industry practices for the subsistence items, but may not be more than 10 days after the date of receipt of the invoice or the certified date of receipt of the items. The Director of the Office of Management and Budget shall provide in the regulations under subsection (a) that when a required payment date is so specified for an invoice, no other payment due date applies to the invoice.
The contracting officer shall—
compute the interest which a contractor shall be obligated to pay under sections 3905(a)(2) and 3905(e)(6) of this title on the basis of the average bond equivalent rates of 91-day Treasury bills auctioned at the most recent auction of such bills prior to the date the contractor received the unearned amount; and
deduct the interest amount determined under subparagraph (A) of this paragraph from the next available payment to the contractor.
Amounts deducted from payments to contractors under paragraph (1)(B) shall revert to the Treasury.
Footnotes
- 1 See References in Text note below.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Pub. L. 97–452 § 1(18)(A) · 96 Stat. 2467
Enacted · 31 U.S.C. § 3903
Added Pub. L. 97–452, § 1(18)(A), Jan. 12, 1983, 96 Stat. 2476
Source evidence
Code source credit
Added Pub. L. 97–452, § 1(18)(A), Jan. 12, 1983, 96 Stat. 2476Enacted provision · exact public law section
(A) Subtitle III is amended by adding at the end the following: “CHAPTER 39— PROMPT PAYMENT “Sec. “3901. Definitions and application. “3902. Interest penalties. “3903. Regulations. “3904. Limitations on discount payments. “3905. Reports. “3906. Relationship to other laws. “§ 3901. Definitions and application “(a) In this chapter— “(1) ‘agency has the same meaning given that term in section 551(1) of title 5 and includes an entity being operated, and the head of the agency identifies the entity as being operated, only as an instrumentality of the agency to carry out a program of the agency . “(2) ‘business concern’ means— “(A) a person carrying on a trade or business; and “(B) a nonprofit entity operating as a contractor. “(3) ‘proper invoice’ is an invoice containing or accompanied by substantiating documentation the Director of the Office of Management and Budget may require by regulation and the head of the appropriate agency may require by regulation or contract. “(4) the head of an agency is deemed to receive an invoice on the later of the dates that— “(A) the designated payment office or finance center of the agency actually receives a proper invoice; or “(B) the head of the agency accepts the applicable property or service. “(5) a payment is deemed to be made on the date a check for the payment is dated. “(6) a contract to rent property is deemed to be a contract to acquire the property. “(b) This chapter applies to the Tennessee Valley Authority. Tennessee Valley Authority. However, regulations prescribed under this chapter do not apply to the Authority, and the Authority alone is responsible for carrying out this chapter as it applies to contracts of the Authority. “§ 3902. Interest penalties “(a) Under regulations prescribed under section 3903 of this title, the head of an agency acquiring property or service from a business concern, who does not pay the concern for each complete delivered item of property or service by the required payment date, shall pay an interest penalty to the concern on the amount of the payment due. The interest shall be computed at the rate the Secretary of the Treasury establishes for interest payments under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611). The Secretary shall Publication in Federal Roister. publish each rate in the Federal Register. “(b) Except as provided in section 3906 of this title, the interest penalty shall be paid for the period beginning on the day after the required payment date and ending on the date on which payment is made. However, a penalty may not be paid if payment for the item is made— “(1) when the item is a meat or meat food product described in section 3903(2)(A) of this title, before the 4th day after the required payment date; “(2) when the item is an agricultural commodity described in section 3903(2)(B) of this title, before the 6th day after the required payment date; or “(3) when the item is not an item referred to in clauses (1) and (2) of this subsection, before the 16th day after the required payment date. “(c) An amount of an interest penalty unpaid after any 30-day period shall be added to the principal amount of the debt, and a penalty accrues thereafter on the added amount. “(d) This section does not authorize the appropriation of additional amounts to pay an interest penalty. The head of an agency shall pay a penalty under this section out of amounts made available to carry out the program for which the penalty is incurred. “(e) A recipient of a grant from the head of an agency may provide in a contract for the acquisition of property or service from a business concern that, consistent with the usual business practices of the recipient and applicable State and local law, the recipient will pay an interest penalty on amounts overdue under the contract under conditions agreed to by the recipient and the concern. The recipient may not pay the penalty from amounts received from an agency. Amounts expended for the penalty may not be counted toward a matching requirement applicable to the grant. An obligation to pay the penalty is not an obligation of the United States Government. “§ 3903. Regulations “The Director of the Office of Management and Budget shall prescribe regulations to carry out section 3902 of this title. The regulations shall— “(1) provide that the required payment date is— “(A) the date payment is due under the contract for the item of property or service provided; or “(B) 30 days after a proper invoice for the amount due is received if a specific payment date is not established by contract; “(2) for the acquisition of meat or a meat food product (as defined in section 2(a)(3) of the Packers and Stockyards Act, 1921 (7 U.S.C. 182(3))), provide a required payment date of not later than 7 days after the meat or meat food product is delivered; and “(3) for the acquisition of a perishable agricultural commodity (as defined in section 1(4) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a(4))), provide a required payment date consistent with that Act; “(4) provide separate required payment dates for a contract under which property or service is provided in a series of partial executions or deliveries to the extent the contract provides for separate payments for partial execution or delivery; and “(5) require that, within 15 days after an invoice is received, the head of an agency notify the business concern of a defect or impropriety in the invoice that would prevent the running of the time period specified in clause (i)(B) of this section. “§ 3904. Limitations on discount payments “The head of an agency offered a discount by a business concern from an amount due under a contract for property or service in exchange for payment within a specified time may pay the discounted amount only if payment is made within the specified Penalty. time. The head of the agency shall pay an interest penalty on an amount remaining unpaid in violation of this section. The penalty accrues as provided under sections 3902 and 3903 of this title, except that the required payment date for the unpaid amount is the last day specified in the contract that the discounted amount may be paid. “§ 3905. Reports “(a) By the 60th day after the end of each fiscal year, the head of each agency shall submit to the Director of the Office of Management and Budget a report on interest penalty payments made under this chapter during that fiscal year. The report shall include the number, amounts, and frequency of the payments and the reasons the payments were not avoided by prompt payment. “(b) By the 120th day after the end of each fiscal year, the Director shall submit to the Committees on Governmental Affairs, Appropriations, and Small Business of the Senate and the Committees on Government Operations, Appropriations, and Small Business of the House of Representatives a report on agency compliance with this chapter. The report shall include a summary of the report of each agency submitted under subsection (a) of this section and an analysis of progress made in reducing interest penalty payments by that agency from prior years. “§ 3906. Relationship to other laws “(a) A claim for an interest penalty not paid under this chapter may be filed under section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605). “(b) (1) An interest penalty under this chapter does not continue to accrue— “(A) after a claim for a penalty is filed under the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.); or “(B) for more than one year. “(2) Paragraph (1) of this subsection does not prevent an interest penalty from accruing under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) after a penalty stops accruing under this chapter. A penalty accruing under section 12 may accrue on an unpaid contract payment and on the unpaid penalty under this chapter. “(c) Except as provided in section 3904 of this title, this chapter does not require an interest penalty on a payment that is not made because of a dispute between the head of an agency and a business concern over the amount of payment or compliance with the contract. A claim related to the dispute, and interest payable for the period during which the dispute is being resolved, is subject to the intract Disputes Act of 1978 (41 U.S.C. 601 et seq.).”.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 6(1) · 102 Stat. 2455
Amended · 31 U.S.C. § 3903(a)
Pub. L. 100–496, § 6(1), designated existing provisions as subsec. (a)
Source evidence
Code amendment note
Subsec. (a). Pub. L. 100–496, § 6(1), designated existing provisions as subsec. (a).Enacted provision · exact public law section
(1) by inserting “(a)” before “The Director”;Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 13(a) · 102 Stat. 2455
Changed · 31 U.S.C. § 3903(a)(2)
Pub. L. 100–496, § 13(a), included any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product
Source evidence
Code amendment note
Subsec. (a)(2). Pub. L. 100–496, § 13(a), included any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product.Enacted provision · exact public law section
(a) Section 3903(a)(2) of title 31, United States Code, is amended by inserting “including any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product,” after “182(3))),”.Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 4 · 102 Stat. 2455
Amended · 31 U.S.C. § 3903(a)(4)
Pub. L. 100–496, § 4, amended par. (4) generally. Prior to amendment, par. (4) read as follows: “provide separate required payment dates for a contract under which property or service is provided in a series of partial executions or deliveries to the extent the contract provides for separate payments for partial execution or delivery; and”
Source evidence
Code amendment note
Subsec. (a)(4). Pub. L. 100–496, § 4, amended par. (4) generally. Prior to amendment, par. (4) read as follows: “provide separate required payment dates for a contract under which property or service is provided in a series of partial executions or deliveries to the extent the contract provides for separate payments for partial execution or delivery; and”.Enacted provision · exact public law section
Sec. 4. payments for dairy and certain other products Section 3903(4) of title 31, United States Code, is amended to read as follows: “(4) for the acquisition of dairy products (as defined in section 111(e) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502(e)), the acquisition of edible fats or oils, and the acquisition of food products prepared from edible fats or oils, provide a required payment date of not later than 10 days after the date on which a proper invoice for the amount due has been received by the agency acquiring such dairy products, fats, oils, or food products;”.Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 5(2) · 102 Stat. 2455
Redesignated · 31 U.S.C. § 3903(a)(5)
Pub. L. 100–496, § 5(2), added par. (5). Former par. (5) redesignated (7)
Source evidence
Code amendment note
Subsec. (a)(5). Pub. L. 100–496, § 5(2), added par. (5). Former par. (5) redesignated (7).Enacted provision · exact public law section
(2) by inserting after paragraph (4) the following: “(5) require periodic payments, in the case of a property or service contract which does not prohibit periodic payments for partial deliveries or other contract performance during the contract period, upon— “(A) submission of an invoice for property delivered or services performed during the contract period, if an invoice is required by the contract; and “(B) either— “(i) acceptance of the property or services by an employee of an agency authorized to accept the property or services; or “(ii) the making of a determination by such an employee, that the performance covered by the payment conforms to the terms and conditions of the contract;”.Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 6(2) · 102 Stat. 2455
Added · 31 U.S.C. § 3903(a)(6)
Pub. L. 100–496, § 6(2), added par. (6)
Source evidence
Code amendment note
Subsec. (a)(6). Pub. L. 100–496, § 6(2), added par. (6).Enacted provision · exact public law section
(2) by inserting after paragraph (5) (as added by section 5) the following new paragraph: “(6) in the case of a construction contract, provide for the payment of interest on— “(A) a progress payment (including a monthly percentage-of-completion progress payment or milestone payments for completed phases, increments, or segments of any project) that is approved as payable by the agency pursuant to subsection (b) of this section and remains unpaid for— “(i) a period of more than 14 days after receipt of the payment request by the place or person designated by the agency to first receive such requests; or “(ii) a longer period, specified in the solicitation, if required to afford the Government a practicable opportunity to adequately inspect the work and to determine the adequacy of the contractor’s performance under the contract; and “(B) any amounts which the agency has retained pursuant to a prime contract clause providing for retaining a percentage of progress payments otherwise due to a contractor and that are approved for release to the contractor, if such retained amounts are not paid to the contractor by a date specified in the contract or, in the absence of such a specified date, by the 30th day after final acceptance;”; andEffective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 7 · 102 Stat. 2455
Added · 31 U.S.C. § 3903(a)(7)
Pub. L. 100–496, § 7, added par. (7)
Struck · 31 U.S.C. § 3903(a)(7)
Pub. L. 100–496, § 7, struck out former par. (7), which read as follows: “require that, within 15 days after an invoice is received, the head of an agency notify the business concern of a defect or impropriety in the invoice that would prevent the running of the time period specified in clause (1)(B) of this section.”
Source evidence
Code amendment note
Subsec. (a)(7). Pub. L. 100–496, § 7, added par. (7) and struck out former par. (7), which read as follows: “require that, within 15 days after an invoice is received, the head of an agency notify the business concern of a defect or impropriety in the invoice that would prevent the running of the time period specified in clause (1)(B) of this section.”Enacted provision · exact public law section
Sec. 7. additional requirements of regulations Section 3903(a) of title 31, United States Code, is further amended by striking out paragraph (7), as redesignated by section 5, and inserting the following: “(7) require that— “(A) each invoice be reviewed as soon as practicable after receipt for the purpose of determining that such an invoice is a proper invoice within the meaning of section 3901(a)(3) of this title; “(B) any invoice determined not to be such a proper invoice suitable for payment shall be returned as soon as practicable, but not later than 7 days, after receipt, specifying the reasons that the invoice is not a proper invoice; and “(C) the number of days available to an agency to make a timely payment of an invoice without incurring an interest penalty shall be reduced by the number of days by which an agency exceeds the requirements of subparagraph (B) of this paragraph; “(8) permit an agency to make payment up to 7 days prior to the required payment date, or earlier as determined by the agency to be necessary on a case-by-case basis; and “(9) prescribe the methods for computing interest under section 3903(c) of this title.”.Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 5(1) · 102 Stat. 2455
Redesignated · 31 U.S.C. § 3903(a)(7)
Pub. L. 100–496, § 5(1), redesignated par. (5) as (7)
Target inherited from the preceding amendment note.
Source evidence
Code amendment note
Pub. L. 100–496, § 5(1), redesignated par. (5) as (7).Enacted provision · exact public law section
(1) by redesignating paragraph (5) as paragraph (7); andEffective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 7 · 102 Stat. 2455
Added · 31 U.S.C. § 3903(a)(8); 31 U.S.C. § 3903(a)(9)
Pub. L. 100–496, § 7, added pars. (8) and (9)
Source evidence
Code amendment note
Subsec. (a)(8), (9). Pub. L. 100–496, § 7, added pars. (8) and (9).Enacted provision · exact public law section
Sec. 7. additional requirements of regulations Section 3903(a) of title 31, United States Code, is further amended by striking out paragraph (7), as redesignated by section 5, and inserting the following: “(7) require that— “(A) each invoice be reviewed as soon as practicable after receipt for the purpose of determining that such an invoice is a proper invoice within the meaning of section 3901(a)(3) of this title; “(B) any invoice determined not to be such a proper invoice suitable for payment shall be returned as soon as practicable, but not later than 7 days, after receipt, specifying the reasons that the invoice is not a proper invoice; and “(C) the number of days available to an agency to make a timely payment of an invoice without incurring an interest penalty shall be reduced by the number of days by which an agency exceeds the requirements of subparagraph (B) of this paragraph; “(8) permit an agency to make payment up to 7 days prior to the required payment date, or earlier as determined by the agency to be necessary on a case-by-case basis; and “(9) prescribe the methods for computing interest under section 3903(c) of this title.”.Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.Prompt Payment Act Amendments of 1988
Pub. L. 100–496 § 6(3) · 102 Stat. 2455
Added · 31 U.S.C. § 3903(b); 31 U.S.C. § 3903(c)
Pub. L. 100–496, § 6(3), added subsecs. (b) and (c)
Source evidence
Code amendment note
Subsecs. (b), (c). Pub. L. 100–496, § 6(3), added subsecs. (b) and (c).Enacted provision · exact public law section
(3) by adding at the end of such subsection the following new subsection: “(b) (1) A payment request may not be approved under subsection (a)(6(A) of this section unless the application for such payment includes— “(A) substantiation of the amounts requested; and “(B) a certification by the prime contractor, to the best of the contractor’s knowledge and belief, that— “(i) the amounts requested are only for performance in accordance with the specifications, terms, and conditions of the contract; “(ii) payments to subcontractors and suppliers have been made from previous payments received under the contract, and timely payments will be made from the proceeds of the payment covered by the certification, in accordance with their subcontract agreements and the requirements of this chapter; and “(iii) the application does not include any amounts which the prime contractor intends to withhold or retain from a subcontractor or supplier in accordance with the terms and conditions of their subcontract. “(2) The agency shall return any such payment request which is defective to the contractor within 7 days after receipt, with a statement identifying the defect. “(c) (1) The contracting officer shall— “(A) compute the interest which a contractor shall be obligated to pay under sections 3905(a)(2) and 3905(e)(6) of this title on the basis of the average bond equivalent rates of 91-day Treasury bills auctioned at the most recent auction of such bills prior to the date the contractor received the unearned amount; and “(B) deduct the interest amount determined under subparagraph (A) of this paragraph from the next available payment to the contractor. “(2) Amounts deducted from payments to contractors under paragraph (1)(B) shall revert to the Treasury.”.Effective date note
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.National Defense Authorization Act for Fiscal Years 1992 and 1993
Pub. L. 102–190 div. A title VIII § 842 · 105 Stat. 1290
Inserted · 31 U.S.C. § 3903(a)(2)
Pub. L. 102–190 inserted provisions relating to fresh or frozen fish as defined in 16 U.S.C. 4003(3)
Substituted · 31 U.S.C. § 3903(a)(2)
Pub. L. 102–190 substituted “meat, meat food product, or fish” for “meat or meat food product”
Source evidence
Code amendment note
Subsec. (a)(2). Pub. L. 102–190 inserted provisions relating to fresh or frozen fish as defined in 16 U.S.C. 4003(3) and substituted “meat, meat food product, or fish” for “meat or meat food product”.Enacted provision · exact public law section
SEC. 842. PROMPT PAYMENT FOR PURCHASE OF FISH. Section 3903(a)(2) of title 31, United States Code, is amended— (1) by striking out “provide” and inserting in lieu thereof “or of fresh or frozen fish (as defined in section 204(3) of the Fish and Seafood Promotion Act of 1986 (16 U.S.C. 4003(3)), provide”; and (2) by striking out “meat or meat food product” and inserting in lieu thereof “meat, meat food product, or fish”.Pub. L. 106–65 div. A title X § 1009 · 113 Stat. 512
Added · 31 U.S.C. § 3903(c); 31 U.S.C. § 3903(d)
Pub. L. 106–65 added subsec. (c)
Redesignated · 31 U.S.C. § 3903(c); 31 U.S.C. § 3903(d)
Pub. L. 106–65 redesignated former subsec. (c) as (d)
Source evidence
Code amendment note
Subsecs. (c), (d). Pub. L. 106–65 added subsec. (c) and redesignated former subsec. (c) as (d).Enacted provision · exact public law section
SEC. 1009. SINGLE PAYMENT DATE FOR INVOICE FOR VARIOUS SUBSISTENCE ITEMS. Section 3903 of title 31, United States Code, is amended— (1) by redesignating subsection (c) as subsection (d); and (2) by inserting after subsection (b) the following new subsection (c): “(c) A contract for the procurement of subsistence items that is entered into under the prime vendor program of the Defense Logistics Agency may specify for the purposes of section 3902 of this title a single required payment date that is to be applicable to an invoice for subsistence items furnished under the contract when more than one payment due date would otherwise be applicable to the invoice under the regulations prescribed under paragraphs (2), (3), and (4) of subsection (a) or under any other provisions of law. The required payment date specified in the contract shall be consistent with prevailing industry practices for the subsistence items, but may not be more than 10 days after the date of receipt of the invoice or the certified date of receipt of the items. The Director of the Office of Management and Budget shall provide in the regulations under subsection (a) that when a required payment date is so specified for an invoice, no other payment due date applies to the invoice.”.National Defense Authorization Act for Fiscal Year 2020
Pub. L. 116–92 § 873(1) · 133 Stat. 1198
Inserted · 31 U.S.C. § 3903(a)(1)(B)
Pub. L. 116–92, § 873(1), inserted “except as provided in paragraphs (10) and (11),” before “30 days”
Source evidence
Code amendment note
Subsec. (a)(1)(B). Pub. L. 116–92, § 873(1), inserted “except as provided in paragraphs (10) and (11),” before “30 days”.Enacted provision · exact public law section
(1) in paragraph (1)(B), by inserting “except as provided in paragraphs (10) and (11),” before “30 days”;National Defense Authorization Act for Fiscal Year 2020
Pub. L. 116–92 § 873(2) · 133 Stat. 1198
Added · 31 U.S.C. § 3903(a)(10); 31 U.S.C. § 3903(a)(11)
Pub. L. 116–92, § 873(2)–(4), added pars. (10) and (11)
Source evidence
Code amendment note
Subsec. (a)(10), (11). Pub. L. 116–92, § 873(2)–(4), added pars. (10) and (11).Enacted provision · exact public law section
(2) in paragraph (8), by striking “and”;
17 of 17 references resolved to an enrolled provision
Notes
historicalAndRevision
| Historical and Revision Notes | ||
|---|---|---|
| Revised Section | Source (U.S. Code) | Source (Statutes at Large) |
| 3903 | 31 App.:1801(a)(2). | May 21, 1982, Pub. L. 97–177, § 2(a)(2), 96 Stat. 85. |
In the section, before clause (1), the words “The Director of the Office of Management and Budget shall prescribe regulations to carry out section 3902 of this title” are added because of the restatement. In clause (1)(A), the words “the terms of” are omitted as surplus. In clause (1)(B), the words “of the payment” are omitted as surplus.
Editorial Notes
References in Text
The Perishable Agricultural Commodities Act, 1930, referred to in subsec. (a)(3), is act June 10, 1930, ch. 436, 46 Stat. 531, which is classified generally to chapter 20A (§ 499a et seq.) of Title 7, Agriculture. Section 1(4) of the Act was redesignated section 1(b)(4) by Pub. L. 102–237, title X, § 1011(1)(A), , 105 Stat. 1898, and is classified to section 499a(b)(4) of Title 7. For complete classification of this Act to the Code, see section 499r of Title 7 and Tables.
Section 3903(c) of this title, referred to in subsec. (a)(9), was redesignated section 3903(d) by Pub. L. 106–65, div. A, title X, § 1009(1), , 113 Stat. 738.
Amendments1988–2019 · 4 rounds
2019
Subsec. (a)(1)(B). Pub. L. 116–92, § 873(1), inserted “except as provided in paragraphs (10) and (11),” before “30 days”.
Subsec. (a)(10), (11). Pub. L. 116–92, § 873(2)–(4), added pars. (10) and (11).
1999
Subsecs. (c), (d). Pub. L. 106–65 added subsec. (c) and redesignated former subsec. (c) as (d).
1991
Subsec. (a)(2). Pub. L. 102–190 inserted provisions relating to fresh or frozen fish as defined in 16 U.S.C. 4003(3) and substituted “meat, meat food product, or fish” for “meat or meat food product”.
1988
Subsec. (a). Pub. L. 100–496, § 6(1), designated existing provisions as subsec. (a).
Subsec. (a)(2). Pub. L. 100–496, § 13(a), included any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product.
Subsec. (a)(4). Pub. L. 100–496, § 4, amended par. (4) generally. Prior to amendment, par. (4) read as follows: “provide separate required payment dates for a contract under which property or service is provided in a series of partial executions or deliveries to the extent the contract provides for separate payments for partial execution or delivery; and”.
Subsec. (a)(5). Pub. L. 100–496, § 5(2), added par. (5). Former par. (5) redesignated (7).
Subsec. (a)(6). Pub. L. 100–496, § 6(2), added par. (6).
Subsec. (a)(7). Pub. L. 100–496, § 7, added par. (7) and struck out former par. (7), which read as follows: “require that, within 15 days after an invoice is received, the head of an agency notify the business concern of a defect or impropriety in the invoice that would prevent the running of the time period specified in clause (1)(B) of this section.”
Pub. L. 100–496, § 5(1), redesignated par. (5) as (7).
Subsec. (a)(8), (9). Pub. L. 100–496, § 7, added pars. (8) and (9).
Subsecs. (b), (c). Pub. L. 100–496, § 6(3), added subsecs. (b) and (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after , see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.
Implementation Through Federal Acquisition Regulation
Pub. L. 100–496, § 11, , 102 Stat. 2463, provided that:
“(a) The Federal Acquisition Regulation shall be modified to provide appropriate solicitation provisions and contract clauses that implement chapter 39 of title 31, United States Code, as amended by this Act [see Short Title of 1988 Amendment note set out under section 3901 of this title], and the regulations prescribed under section 3903 of such title (as amended).
“(b) The solicitation provisions and contract clauses required by subsection (a) of this section shall include (but not be limited to) the following matters:
“(1) Authority for a contracting officer to specify for a contract or class of contracts a specific payment period, which—
“(A) in the case of payments for commercial items or services, is similar to the payment period or periods permitted in prevailing private industry contracting practices;
“(B) in the case of payments for noncommercial items and services, does not exceed 30 days unless the circumstances of the procurement action is determined to require a longer period for payment and such determination is approved above the level of the contracting officer;
“(C) in the case of payments for items of property or services in an amount less than the amount specified as a small purchase in section 303(g)(2) of the Federal Property and Administrative Services Act of 1949 ([former] 41 U.S.C. 253(g)(2)) [now 41 U.S.C. 3305(b)], does not exceed 15 days after the date of receipt of the invoice, if—
“(i) the contract provides for such ‘fast payment’ terms;
“(ii) title to any property will vest in the Government upon delivery (including delivery to a common carrier); and
“(iii) the business concern offers appropriate warranties to furnish property or services conforming to the requirements of the contract or purchase order, if payment will be due prior to acceptance of the items or services; and
“(D) in the case of progress payments under construction contracts, does not exceed 14 days, unless the solicitation specifies a longer period which the contracting officer has determined is required to afford the Government a practicable opportunity to adequately inspect the work and to evaluate the adequacy of the contractor’s performance under the contract.
“(2) Requirements to make periodic payments, in the case of a property or service contract which does not prohibit periodic payments for partial deliveries or other contract performance during the contract period, upon—
“(A) submission of an invoice for property delivered or services performed during the contract period, if an invoice is required by the contract; and
“(B) either—
“(i) acceptance of the property or services by an employee of the contracting agency authorized to accept the property or services; or
“(ii) the making of a determination by such an employee, that the performance covered by the payment conforms to the terms and conditions of the contract.
“(3) A conclusive presumption, exclusively for the purposes of determining when an agency becomes obligated to pay a late payment interest penalty (other than under construction contracts), that the Federal Government has accepted property or services by the 7th day after the date on which, in accordance with the terms and conditions of the contract, the property is delivered or final performance of the services is completed, unless the solicitation specifies a longer period which is determined by the contracting officer to be required to afford the agency a practicable opportunity to inspect and test the property furnished or evaluate the services performed.
“(4) The limitation that the Federal Government may take a discount offered by a contractor for early payment by the Federal Government only in accordance with the time limits specified by the contractor, determined in accordance with the second sentence of section 3904 of title 31, United States Code.
“(5) The requirements of section 3902(c) of title 31, United States Code.
“(6) The requirements of section 3903(a)(6) of title 31, United States Code.
“(7) The requirements of section 3905 of title 31, United States Code.
“(c) The regulations required by subsection (a) of this section shall be published as proposed regulations for public comment as provided in section 22 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 418b) [now 41 U.S.C. 1707] within 120 days after the date of the enactment of this Act [].”
Edible Fresh or Frozen Poultry Meat, Perishable Poultry Meat Food Products, Fresh Eggs, and Perishable Egg Products
Pub. L. 98–181, title II, § 2002, , 97 Stat. 1297, to the extent that it provided that the terms “meat” and “meat food products” as used in 31 U.S.C. 3903(2) also included edible fresh or frozen poultry meat, perishable poultry meat food products, fresh eggs and perishable egg products, was stricken by Pub. L. 100–496, § 13(b), , 102 Stat. 2465, applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after .
Credits
1983–2019 · 5 acts
- 1983Added Pub. L. 97–452, § 1(18)(A), , 96 Stat. 2476
- 1988amended Pub. L. 100–496, §§ 4–7, 13(a), , 102 Stat. 2457–2459, 2465
- 1991Pub. L. 102–190, div. A, title VIII, § 842, , 105 Stat. 1449
- 1999Pub. L. 106–65, div. A, title X, § 1009, , 113 Stat. 738
- 2019Pub. L. 116–92, div. A, title VIII, § 873, , 133 Stat. 1527.
Show as published
(Added Pub. L. 97–452, § 1(18)(A), , 96 Stat. 2476; amended Pub. L. 100–496, §§ 4–7, 13(a), , 102 Stat. 2457–2459, 2465; Pub. L. 102–190, div. A, title VIII, § 842, , 105 Stat. 1449; Pub. L. 106–65, div. A, title X, § 1009, , 113 Stat. 738; Pub. L. 116–92, div. A, title VIII, § 873, , 133 Stat. 1527.)