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Highlights

GAO presented its views on S. 328, a bill to amend the Prompt Payment Act. GAO found that: (1) although federal agencies had noticeably reduced early and excessively late payments, they were still short of the act's goal; (2) about one-fourth of the commercial payments were still late, and agencies often did not pay the required interest penalties; (3) agencies made another quarter of their commercial payments early, costing the government about $200 million in interest; and (4) agencies paid only about half of their commercial bills on time. The proposed bill would: (1) modify established due dates; (2) clarify authorized periodic payments; (3) require double interest payments; (4) eliminate grace periods; (5) define discount periods; (6) expand agency reporting requirements; (7) require the inclusion of contract clauses regarding due dates in the Federal Acquisition Regulation; and (8) require progress payments under construction projects within 7 days. GAO agreed with the intent of the provisions, and to continue to work with federal agencies to improve the timeliness of vendor payments.

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