Last month Congress passed a bill requiring the federal government to pay interest when it is late paying bills, prompting phone calls from a number of business people wanting to know how they can cash in. The new provision won't take effect until Oct. 1. In the meantime, the Office of Management and Budget is drawing up proposed regulations, which it hopes to publish in about a month.
Under the measure, the government is supposed to pay interest automatically on late payments. If the bill is disputed, the company and the contracting officer are expected to work it out. If the dispute cannot be settled in a year, it will come under the Contracts Dispute Act and could ultimately be settled by the agency's contract board of appeals. "I would hope few cases reach that level," said Kenton Pattie, a businessman who formed the Slow Pay Coalition to push for the bill.
Because of the different billing and procurement procedures throughout the federal government, many agencies will draw up their guidelines for businesses to follow after OMB has completed its rule, according to Pattie. In the meantime, he recommends that businesses keep accurate records of all transactions to document any claims they have, starting in the fall.