{"promptPaymentAct":{"citation":"31 U.S.C. 3901-3907; 5 CFR 1315","standardDays":"Generally 30 days after the agency receives a proper invoice, when the contract sets no other date (5 CFR 1315.4(g)). Shorter periods apply to some food: 7 days after delivery for meat, poultry, eggs and fish, and 10 days for perishable agricultural commodities and dairy products.","interestRate":4.75,"ratePeriod":"July 1, 2026 to December 31, 2026","rateSourceUrl":"https://fiscal.treasury.gov/payments-from-government/prompt-payment/rates","rateHistory":[{"period":"July 1, 2026 to December 31, 2026","rate":4.75},{"period":"January 1, 2026 to June 30, 2026","rate":4.125},{"period":"July 1, 2025 to December 31, 2025","rate":4.625},{"period":"January 1, 2025 to June 30, 2025","rate":4.625},{"period":"July 1, 2024 to December 31, 2024","rate":4.875},{"period":"January 1, 2024 to June 30, 2024","rate":4.875},{"period":"July 1, 2023 to December 31, 2023","rate":4.875},{"period":"January 1, 2023 to June 30, 2023","rate":4.625},{"period":"July 1, 2022 to December 31, 2022","rate":4},{"period":"January 1, 2022 to June 30, 2022","rate":1.625}],"notes":"Interest runs from the day after the due date through the payment date, at the Treasury rate in effect on the day after the due date, using a 360-day year (5 CFR 1315.10). The agency must pay it automatically, whether or not the vendor asks, and must include a notice showing the amount, days late and rate. Unpaid interest at the end of each 30-day period is added to principal, so it compounds every 30 days. Interest stops after 1 year or when a claim is filed under the Contract Disputes Act. Amounts under $1 need not be paid, and no interest is due when payment is held up by a contract dispute or a required contract withholding."},"assignmentOfClaims":{"citation":"31 U.S.C. 3727; 41 U.S.C. 6305; FAR Subpart 32.8","summary":"Federal law generally blocks a contractor from transferring its right to payment on a government contract. The Assignment of Claims Act carves out an exception so a contractor can assign payments to a bank, trust company or other financing institution, which can include a factor that finances the contract. All of these must be true: the contract calls for payments totaling $1,000 or more; the contract does not prohibit assignment; unless the contract allows otherwise, the assignment covers all unpaid amounts, goes to only 1 party (which may act as agent for several lenders), and is not assigned again; and the assignee sends written notice with a true copy of the assignment to the contracting officer, any surety on the contract bond, and the disbursing officer. Once that is done, the government pays the assignee directly. Unless the contract has a no-setoff commitment, the government can still offset certain debts the contractor owes it. Without an assignment that meets these rules, the government generally does not have to recognize the factor: it can keep paying the contractor, and the factor must collect from the contractor instead. This is general information, not legal advice.","sourceUrl":"https://www.acquisition.gov/far/subpart-32.8"},"millerAct":{"citation":"40 U.S.C. 3131-3134","threshold":"The statute requires performance and payment bonds on federal construction contracts of more than $100,000; FAR 28.102-1 applies the inflation-adjusted threshold of more than $150,000. Contracts over $35,000 up to $150,000 use alternative payment protections chosen by the contracting officer.","claimNotice":"90 days: a second-tier claimant (one with a direct contract with a subcontractor but none with the prime contractor) must give the prime contractor written notice within 90 days after its last labor or materials, delivered by a method that provides third-party verification of delivery. First-tier subs and suppliers with a direct contract with the prime need no notice but must wait 90 days after last furnishing to sue.","suitDeadline":"Suit must be filed within 1 year after the claimant's last labor or materials.","sourceUrl":"https://www.law.cornell.edu/uscode/text/40/3133"},"irs6323":{"summary":"A federal tax lien arises when a business owes taxes, but it does not beat a purchaser or secured party until the IRS files a Notice of Federal Tax Lien (IRC 6323(a)). For a factor, the key protection is in 6323(c) and (d). If the factor and the business signed a written factoring or financing agreement before the IRS filed its notice, the factor's interest in accounts receivable the business creates and the factor buys or advances against within 45 days after the filing generally beats the tax lien, as long as the factor did not have actual knowledge of the filing first. After that 45-day window, new receivables are generally subject to the IRS lien. The code treats a purchaser of accounts receivable as holding a security interest for this purpose. That is why factors run lien searches when a deal starts and keep checking during the relationship. This is a general description, not tax or legal advice.","sourceUrl":"https://www.law.cornell.edu/uscode/text/26/6323"},"uccArticle9_406":{"summary":"Many customer contracts say the vendor may not assign its right to payment. Under UCC 9-406(d), as adopted by the states, those clauses are generally ineffective against the sale or assignment of accounts, so a business can usually factor its invoices even if the customer contract forbids assignment, and the assignment cannot be treated as a default. Under 9-406(a), the customer (the account debtor) can keep paying the business until it receives a notice of assignment, signed or authenticated by the business or the factor, that reasonably identifies the invoices and tells it to pay the factor. After that notice, paying the business no longer discharges the debt, so the customer can end up paying twice. The customer may ask for reasonable proof of the assignment, and until the factor provides it, the customer may keep paying the business (9-406(c)). Federal and some state government contracts follow separate rules, such as the Assignment of Claims Act. This is general information, not legal advice.","sourceUrl":"https://www.law.cornell.edu/ucc/9/9-406"},"sources":[{"label":"Bureau of the Fiscal Service, Prompt Payment interest rates","url":"https://fiscal.treasury.gov/payments-from-government/prompt-payment/rates"},{"label":"Bureau of the Fiscal Service, Prompt Payment current rate","url":"https://fiscal.treasury.gov/prompt-payment/rates.html"},{"label":"5 CFR 1315.4, payment due dates (LII)","url":"https://www.law.cornell.edu/cfr/text/5/1315.4"},{"label":"5 CFR 1315.10, late payment interest (LII)","url":"https://www.law.cornell.edu/cfr/text/5/1315.10"},{"label":"31 U.S.C. 3727, assignments of claims (LII)","url":"https://www.law.cornell.edu/uscode/text/31/3727"},{"label":"FAR Subpart 32.8, Assignment of Claims","url":"https://www.acquisition.gov/far/subpart-32.8"},{"label":"40 U.S.C. 3131, Miller Act bonds (LII)","url":"https://www.law.cornell.edu/uscode/text/40/3131"},{"label":"40 U.S.C. 3133, Miller Act payment bond suits (LII)","url":"https://www.law.cornell.edu/uscode/text/40/3133"},{"label":"FAR 28.102-1, Miller Act thresholds","url":"https://www.acquisition.gov/far/28.102-1"},{"label":"26 U.S.C. 6323, validity and priority of federal tax liens (LII)","url":"https://www.law.cornell.edu/uscode/text/26/6323"},{"label":"UCC 9-406 (LII)","url":"https://www.law.cornell.edu/ucc/9/9-406"}],"verifiedOn":"2026-11-12"}