The Prompt Payment Act Answer Book

Chapter 2

The History of the Act

The Prompt Payment Act, originally passed in 1982, was updated several times during its first years of existence. The Office of Management and Budget (OMB) published Circular A-125 to implement its requirements, supplanted by the Final Rule on Prompt Payment in 1999. This chapter documents the history of the Prompt Payment Act and its evolution.

1. Why did Congress pass the Prompt Payment Act?

Prior to enactment of the Prompt Payment Act, there was considerable dissatisfaction among government contractors about the timeliness of government payments. A 1978 report issued by the General Accounting Office (GAO; now called the Government Accountability Office) stated that 39 percent of all bills paid by the government ...