Monday, January 2, 2012
Prompt Payment Interest Rate Drops to 2%
The prompt payment interest rate dropped again for the sixth consecutive semi-annual period. The new rate for the period January 1, 2012 through June 30, 2012 is a flat two percent. This is down from 2.5 percent from the previous six month period.
Any Governmental agency that has acquired property or services from a business concern and has failed to pay for the complete delivery of property or service b the required payment date must pay the business an interest penalty. This applies to public vouchers under cost-type contracts, progress payments under fixed price, as well as many other payment methods.
Under the prompt payment act, if an interest penalty is owed to a business concern, the penalty shall be paid regardless of whether the business concern requested payment of interest. Agencies calculate interest penalty with the interest rate in effect at the time the agency accrues the obligation to pay a late payment interest penalty.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.