Which Act is described by 5 CFR 1315 as requiring 'pay on time or pay interest'?

Which Act is described by 5 CFR 1315 as requiring 'pay on time or pay interest'?

• A. Debt Collection Improvement Act
• B. Prompt Payment Act
• C. Federal Prompt Funds Act
• D. Timely Payment Act

Answer: (B)

The concept being tested is timely government payments and the requirement to compensate vendors with interest if payments are late. 5 CFR 1315 implements the requirement that payments by the government be made on time, or, if they aren’t, interest must be paid to the payee. This is the core idea of the Prompt Payment Act: it ensures vendors are paid promptly and that late payments carry interest as a penalty or incentive for timely billing and payment. In practice, agencies generally must pay properly invoiced amounts within a set period (often 30 days, depending on contract terms), and if they miss that window, interest starts to accrue and is paid to the contractor. The other options do not express this same obligation: they address different areas or misstate the title, whereas the Prompt Payment Act is specifically about paying on time or paying interest.

The concept being tested is timely government payments and the requirement to compensate vendors with interest if payments are late. 5 CFR 1315 implements the requirement that payments by the government be made on time, or, if they aren’t, interest must be paid to the payee. This is the core idea of the Prompt Payment Act: it ensures vendors are paid promptly and that late payments carry interest as a penalty or incentive for timely billing and payment.

In practice, agencies generally must pay properly invoiced amounts within a set period (often 30 days, depending on contract terms), and if they miss that window, interest starts to accrue and is paid to the contractor. The other options do not express this same obligation: they address different areas or misstate the title, whereas the Prompt Payment Act is specifically about paying on time or paying interest.