Requires government to pay contractor on time and provides interest penalties if payment is late.
Applicability: Applies to all contracts.
Key Requirements
Understand government's prompt payment obligation (typically 30 calendar days)
Know interest calculation for late payments (per Federal Acquisition Circular)
Submit proper invoices to trigger payment clock
Track invoice submission dates for late payment claims
Common Issues & Pitfalls
Not tracking invoice submission dates to establish late payment claims
Accepting late payment without demanding interest
Submitting invoices that don't properly start the payment clock
Not understanding interest calculation methodology
Contractor Guidance for Your Bid
Government late payment interest is a right, not a favor. If paid after 30 days from proper invoice receipt, you're entitled to interest (currently ~9% annually). Track invoice dates carefully and follow up with CO if payment is overdue. Most agencies honor prompt payment interests when properly claimed.