Florida Contractor’s Guide To The Federal Prompt Payment Act
You would think that a statute with such a clear-cut name would make it easy for Florida contractors to get paid. Unfortunately, the Federal Prompt Payment Act (PPA) is more complicated than you expect. The point behind the statute is to protect contractors, subcontractors and suppliers by establishing deadlines for payment on projects funded by the federal government. If payment is delayed, the hiring agency must pay interest on the past due amount.
However, there are numerous challenges and multiple steps for perfecting your rights under PPA. The requirements can be confusing if you do not have a legal background, and you put important financial interests and rights at risk. It is wise to rely on a Florida contractor representation attorney for assistance, but this guide to PPA requirements can help you understand the basics.
Proper Invoice Requirement
Before a contractor can gain protection under PPA, it is first necessary to submit an invoice that complies with the law. PPA requires a payment application to include:
- Contact information for the contractor;
- Invoice date, number, and contract details;
- Description of the work performed or materials supplied;
- Name and address for sending payment;
- Information related to progress payments; and,
- Any other details that may be relevant to the payment being sought.
Payment Deadlines and Penalties
Forwarding the proper payment application triggers a series of deadlines, depending on the parties involved. Upon submitting an invoice for a progress payment, the federal government is required to pay the GC within 14 days; final payment is due to the GB within 30 days after sending the final invoice. In addition, upon receiving the funds:
- The GC must pay subcontractors and suppliers within 7 days; and,
- A subcontractor must pay lower tier parties within 7 days thereafter.
When a payment owed by the federal government does not comply with the deadline, interest accrues automatically at the rate established by US officials. The government is subject to an additional interest penalty for failure to pay this amount within 10 days after sending the invoice payment.
Withholding Payment for Cause
The federal government is not obligated to make payments under PPA when the work is defective or the contractor did not provide satisfactory performance. If officials claim unsatisfactory work is the reason for nonpayment, they must submit a Notice of Withholding within 7 days after receiving an invoice. The paperwork must include details on what the GC must do to correct the issues and receive payment. Once the contractor corrects the deficiencies, the government has 7 days to pay.
Count on a South Florida Contractor Representation Lawyer for Assistance
This information about PPA requirements is useful as a guideline, but it is critical to account for the details when seeking payment for a federally funded construction project. If you need help with the process, please contact Linkhorst & Hockin, P.A. to speak to a member of our team. Contractors in Palm Beach County and throughout South Florida can call 561-626-8880 or visit our website to set up a consultation with a knowledgeable contractor representation attorney.