For many years, there were two phrases that had an all-too-familiar ring to federal contractors waiting to be paid: "I was just about to call you" and "The check is in the mail." Bureaucratic deadbeats in Washington may still not return phone calls, but, lately, more checks have been getting in the mail on time, thanks to the Federal Prompt Payment Act.
That law, enacted in 1982, entitles federal contractors to receive interest on any invoices unpaid after 45 days. Previously, federal agencies had been notorious foot draggers when paying for everything from toilet paper to computers. While the law has not eliminated the problem, it has encouraged the federal government to clean up its act. During the the first half of 1983, delinquency cost the Treasury a paltry $518,000 in interest penalties -- a figure that prompt-pay advocates find little short of miraculous. "No agency director really wants to spend his or her resources on deliquent interest charges," says Kenton Pattie, who led the fight for the law. "It's a waste of taxpayers' money, and -- if the newspapers find out about it -- [government officials] know it could be very embarrassing."
Meanwhile, the prompt-pay forces also appear to be making some headway in their campaign against deadbeats in state governments (see INC., March, page 33). To date, a total of 27 states have enacted prompt-pay statutes, 10 of them since the beginning of 1983. In California, moreover, agency officials are required to file reports with the legislature whenever they pay interest.
Once again, Pattie is leading the charge, this time from the helm of the Coalition for State Prompt Pay, based in Fairfax, Va. The group has targeted such states as Missouri, Connecticut, and Wisconsin, where bills have been bottled up in legislative committees, as well as New York, New Jersey, and Alaska, where governors have recently vetoed legislation. "We want to make those vetoes very unpopular," says Pattie.
The ultimate goal, of course, is to get prompt-pay statutes on the books of all 50 states -- whereupon Pattie vows to take the fight to slow-paying cities.
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