Many people I talk to are discouraged from getting into the federal market because they say it takes forever for the fed to pay. This is a half-misconception, it can take a long time to collect on a federal invoice if there is improper payment information submitted. And since we are talking about the government, you will rarely be contacted to fix any problems, so it is important to follow-up and make absolutely certain that the invoicing is complete and the payment is scheduled.
There is a LAW in place that binds the government to pay within 30 days or pay you interest. This makes the government a no-risk customer. Here is a brief description of the Prompt Payment Act:
The Prompt Payment rule ensures that that federal agencies pay vendors in a timely manner. Prompt Payment assesses late interest penalties against agencies that pay vendors after a payment due date. This rate was established under the Contract Disputes Act and is referred to as the “Renegotiation Board Interest Rate,” the “Contract Disputes Act Interest Rate,” and the “Prompt Payment Act Interest Rate.”
Right now, in 2010, the current interest payment is 3.25%, but you can check if it has changed by clicking HERE.
So, if you are holding back on getting a GSA Contract and diving into the federal market because you are uncertain about getting paid on time, then you need not worry. The government is bound by law to pay on time, the only uncertainty is your ability to file the payment paperwork properly and follow through to verify it is complete.
