Sec. 9. Requirements relating to prompt payment, progress payments, and performance-based payments
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Chapter 39 of title 31, United States Code, is amended by inserting after section 3905 the following: Each covered contract shall include a clause that requires the prime contractor to include in each subcontract entered into by the prime contractor and a subcontractor for the purpose of performing such covered contract— a payment clause which obligates the prime contractor to pay the subcontractor (at any tier) for satisfactory performance under its subcontract within 14 calendar days of receipt of payment from the agency; and an interest penalty clause which obligates the prime contractor to pay to the subcontractor (at any tier) an interest penalty on amounts due in the case of each payment not made in accordance with the payment clause described in paragraph (1)— for the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and computed at the rate specified by section 3902(a) of this title.
In this section, the term covered contract means a contract awarded by the head of an agency to a prime contractor that is not a disadvantaged small business (as defined in the CONTRACTS Act of 2024) with a proposed value greater than the simplified acquisition threshold. . The table of contents for chapter 39 of title 31, United States Code, is amended by inserting after the item relating to section 3905 the following: 3906. Disclosures for payments on certain contracts. . The head of a Federal agency shall include in any contract terms, and in any modification to such contract, a requirement that a prime contractor disclose to each potential subcontractor that is a disadvantaged small business— whether the prime contractor is receiving progress payments or performance-based payments under such contract; and whether the prime contractor will provide progress payments to a subcontractor for such contract.
The prime contractor shall ensure that each potential subcontractor in receipt of a disclosure described in paragraph
(1)submits to such prime contractor a signed acknowledgment of receipt of such disclosure. A prime contractor for a Federal contract shall include in any subcontracting reports required to be submitted under Section 8(d)(6)(E) of the Small Business Act ( 15 U.S.C. 637(d)(6)(E) ) verification of the timely remittance of any payments to each subcontractor of such prime contractor. The head of a Federal agency shall include in any contract performance evaluation of a prime contractor for such contract an evaluation of the prime contractor's compliance with the requirements of this subsection and the requirements of section 3906 of title 31, United States Code. If a prime contractor submits an offer for a subsequent contract to the head of a Federal agency through a sealed bid or negotiated acquisition proposal and such head determines such contractor is not in compliance with paragraph (1), such head may not award the subsequent contract to such contractor— until such contractor is in compliance with paragraph (1), as determined by such head; and unless such head determines that such award is in the national interest.
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Sec. 9
Requirements relating to prompt payment, progress payments, and performance-based payments
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