Rule allows interest payments
Federal agencies must pay an interest penalty to their contractors when they make late payments under cost-reimbursement contracts for services, according to a final rule published in the Federal Register. The rule went into effect May 23.
The rule requires an agency to pay the penalty whenever it makes an interim payment more than 30 days after the agency receives a proper invoice. Previously, the Federal Acquisition Regulation prohibited penalty interest under cost-reimbursement contracts for services.