PROMPT PAYMENT ACT
A law enacted in order to ensure that companies transacting business with the Government are paid in a timely manner. With certain exceptions, the Act requires that the Government make payment within 30 days from the date of submission of a properly prepared invoice by a contractor. For amounts not paid within the required period, the Government is obligated to pay interest at a rate established by the Secretary of the Treasury. At the time of original enactment, the law provided for a 15-day grace period in addition to the basic 30-day period; this provision was subsequently repealed due to perceived abuse by the Government.