Overview of the Prompt Payment Act (PPA):

The Prompt Payment Act (31 U.S.C. Chapter 39) requires federal agencies to pay vendors for goods

and services in a timely manner.

If payment is not made within the required time frame (usually 30 days after receiving a proper

invoice), the agency must pay interest penalties to the vendor for the late payment.

Explanation of Answer Choices:

A . Invoices immediately when received: Incorrect. Federal agencies are not required to pay invoices

immediately; they must process payments within the specified timeframe.

B . Interest when an invoice is paid late: Correct. Agencies must pay interest penalties for late

payments.

C . Invoices no later than 60 days after receipt of the invoice: Incorrect. The standard timeframe is 30

days unless otherwise specified in the contract.

D . Interest on intragovernmental invoices: Incorrect. The PPA does not apply to intragovernmental

transactions.

Reference:

Prompt Payment Act, 31 U.S.C. Chapter 39.

U.S. Department of the Treasury, Prompt Payment Act Guidelines.