Prompt payment
Prompt payment laws set deadlines for paying contractors and subcontractors, and attach interest penalties when payment is late. There is a federal Prompt Payment Act for federal work, and nearly every state has its own prompt payment act for state, local, and private projects.
The federal Prompt Payment Act
For federal procurement, the Prompt Payment Act requires federal agencies to pay contractors on time and to pay interest penalties automatically when they are late. See 31 U.S.C. § 3901–3907 (definitions and application at § 3901; interest penalties at § 3902). The Act applies to the federal government as a buyer, and its timing and interest rules are implemented through the Federal Acquisition Regulation.
State prompt payment acts
Most states have prompt payment statutes that set payment deadlines and interest for private construction, public construction, or both — and many let a subcontractor stop work or recover attorney's fees when payment is wrongfully withheld. The deadlines differ substantially by state and by whether the payor is a public entity, a private owner, or a contractor paying its subs.
Related tools and support
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