The Prompt Payment Act (31 U.S.C. Chapter 39) was enacted to ensure that federal agencies pay their commercial obligations in a timely manner. The Act's primary enforcement mechanism is the mandatory requirement for an agency to pay an interest penalty if it fails to make a payment by the prescribed due date. The due date is typically 30 days after the agency receives a proper invoice or accepts the goods or services, whichever is later. This interest payment is automatic and does not require the vendor to submit a separate invoice for it. The core purpose of the Act is to compensate vendors for the lost value of money when the government pays late.

A. The Act establishes a payment due date, typically 30 days, not a requirement for immediate payment upon receipt of an invoice.

C. The standard payment term under the Act is 30 days. While some exceptions exist for specific commodities, a blanket 60-day rule is incorrect.

D. The Prompt Payment Act's interest penalty provisions apply to payments made to "business concerns" and do not generally apply to intragovernmental transactions between federal agencies.

1. U.S. Office of Management and Budget (OMB). (2019). Circular No. A-125, Prompt Payment.

Section 6.a. states, "Agencies will pay an interest penalty automatically, without a request from the vendor, when all of the following conditions have been met: ... (3) Payment was not made by the due date." This directly supports the requirement to pay interest on late payments.

2. U.S. Code. Title 31, Subtitle III, Chapter 39 - Prompt Payment.

31 U.S.C. § 3902(a) explicitly mandates, "...the head of an agency acquiring property or service from a business concern... shall pay an interest penalty to the business concern" if the payment is not made by the required payment date.

3. U.S. Department of the Treasury. (2023). Treasury Financial Manual (TFM), Volume I, Part 6, Chapter 8000: Prompt Payment.

Section 8030.20 establishes the standard payment due date: "Unless a contract specifies another due date, the due date is 30 days after the later of the invoice receipt date or the acceptance date of the goods or services." This refutes options A and C.

Section 8010.10 clarifies the Act's scope: "The Prompt Payment Act applies to contracts awarded by federal agencies for the procurement of goods and services from business concerns." This scope generally excludes intragovernmental transactions, refuting option D.