Public Promt Payment Act--Gov. Code 2251

Question 1

Cannot be Waived

Answer 1

The provisions of the Public Prompt Payment Act cannot be waived by contract.

Question 2

How long Does a Gov. Entity have to pay a properly Submitted Invoice?

Answer 2

a payment by a governmental entity is overdue on the 31st day after the later of:

(1) the date the governmental entity receives the goods under the contract;
(2) the date the performance of the service under the contract is completed; or
(3) the date the governmental entity receives an invoice for the goods or service.

Question 3

How long does a Vendor/Contractor have to Pay its Subs and Suppliers?

Answer 3

10 days from receipt of the funds.

Question 4

What is the amount of interest that accrues on overdue payments?

Answer 4

1% plus prime. Interest stops accruing when gov entity mails the money.

Question 5

Notice required for error in invoice

Answer 5

Gov. entity must notify vendor of invoice error within 21 days of receiving the invoice. If vendor wins dispute, it get interest.

Question 6

Vendor is entitled to Attorneys fees.

Answer 6

Fees seem to be mandatory.

Question 7

Suspension of work for nonpayment by Vendor and/or Subcontractor.

Answer 7

(1) the governmental entity does not pay the vendor an undisputed amount within the time limits provided by Subchapter B; and
(2) the vendor gives the governmental entity written notice:

(A) informing the governmental entity that payment has not been received; and

(B) stating the intent of the vendor to suspend performance for nonpayment.

Vendor needs to give entity 10 days notice before suspending.

On TxDot highway project the notice period is 20 days.