Federal Agencies' Bill Payment Performance and Comments on Proposals To Amend the Prompt Payment Act

GAO discussed: (1) agencies' progress towards paying their bills on time; and (2) proposed amendments to the Prompt Payment Act. GAO found that the proposed legislation would: (1) assume acceptance of goods or services 5 days after delivery for computing payment due dates and calculating late-payment penalties; (2) eliminate the grace period, which could increase administrative costs and further delay some payments; (3) encourage agencies to pay late-payment penalties voluntarily; (4) better define discount periods; (5) expand agencies' reporting requirements; and (6) include prompt payment discounts in the Federal Acquisition Regulation. GAO believes that, although agencies' adherence to the recently revised guidelines should improve their bill-payment procedures, legislation mandating certain practices would emphasize the need to accelerate management and administrative initiatives.