The Government Is Delaying Payment: What Can a Federal Contractor Do?

By Aron C. Beezley and Owen E. Salyers of Bradley Arant Boult Cummings LLP
Originally published on October 15, 2026

When the federal government delays payment, a contractor should not simply wait and hope the problem resolves itself. Depending on the circumstances, a federal contractor may be entitled to prompt payment interest, may need to correct an invoice problem, or may have a contract claim that should be submitted to the contracting officer.

For federal contractors, delayed payment can create serious cash-flow problems—particularly for small businesses and companies performing work with significant payroll, subcontractor, or materials costs. Understanding why payment is delayed and what contractual remedies may be available is therefore critical.

This article explains what federal contractors should know when the government has not paid an invoice on time.

What Should a Federal Contractor Do If the Government Is Late Paying an Invoice?

A contractor facing a delayed payment should generally:

• Review the contract’s payment provisions and applicable FAR clauses.
• Confirm that the invoice was properly submitted.
• Determine when payment was actually due.
• Find out whether the government has rejected, disputed, or withheld the invoice.
• Document communications with the contracting officer and payment office.
• Determine whether a Prompt Payment Act interest penalty applies.
• Consider whether the payment dispute should be pursued as a formal contract claim.

The appropriate response depends heavily on whether the delay is simply an administrative payment problem or reflects a substantive dispute about the contractor’s performance, entitlement, or the amount owed.

When Is the Government Required to Pay a Federal Contractor?

Federal contracts generally contain provisions governing when invoice payments are due. FAR Subpart 32.9 addresses prompt payment, and FAR 52.232-25, Prompt Payment, is used in many federal contracts.

Under the standard Prompt Payment Clause, the payment due date is generally 30 days after the date the designated billing office receives a proper invoice or the date the government accepts the supplies or services, whichever is later. The deadline is, however, subject to the specific rules in the contract and applicable FAR provisions.

For contracts for commercial products and commercial services, FAR 52.212-4 contains separate payment and invoice provisions and incorporates the Prompt Payment Act and implementing regulations.

The contract itself should therefore be the starting point. Contractors should not assume that every federal contract has identical payment deadlines.

What Is a “Proper Invoice”?

One of the first questions to investigate is whether the government actually received a proper invoice. Under FAR 32.905, a proper invoice generally must contain specified information, including the contractor’s name and address, invoice date and number, contract number or other authorization, description and pricing information, shipping and payment terms, and the appropriate payment information. The particular contract may require additional documentation.

An invoice problem can affect when the payment clock begins to run. Contractors should thus preserve:

• The original invoice;
• Proof of submission;
• The date the government received it;
• Receiving or acceptance documentation;
• Any notice that the invoice was rejected or considered defective;
• Corrected invoices; and
• Communications with the contracting officer and payment office.

A contractor should also determine whether the government rejected a proper invoice incorrectly. FAR 32.906 provides that, when a designated billing office erroneously rejects a proper invoice and the invoice is resubmitted, the original receipt date is used for calculating the payment due date and any applicable interest penalty.

Is a Federal Contractor Entitled to Interest When the Government Pays Late?

Potentially, yes. The Prompt Payment Clause provides for an interest penalty when payment is late and specified conditions are satisfied. Among other things, the clause requires that the government has received a proper invoice without disagreement concerning quantity, quality, or contractor compliance.

What If the Government Says There Is a Problem with the Invoice?

The contractor should determine exactly what the government believes is wrong. Possible issues include:

• Missing documentation;
• Incorrect contract or order numbers;
• Incorrect line-item information;
• Missing receiving documentation;
• Incorrect quantities or prices;
• Incorrect electronic funds transfer information;
• Failure to satisfy a contract-specific invoicing requirement; or
• An alleged performance or compliance problem.

The contractor should avoid treating every delayed payment as an ordinary billing issue. A disagreement about whether the contractor actually performed the required work, whether the government accepted the work, or how much the government owes may become a contract dispute rather than merely a late-invoice problem.

What If the Government Disputes the Amount It Owes?

This is where federal contract claims become particularly important. Under the Contract Disputes Act and FAR 33.206, a contractor claim generally must be submitted in writing to the contracting officer for a decision within six years after the claim accrues, unless the parties have agreed to a shorter period. Claims exceeding $100,000 generally must also contain the certification required by the Contract Disputes Act and FAR 52.233-1. A contractor should therefore be careful about relying solely on informal emails, telephone calls, or repeated requests for payment when a genuine legal dispute exists. An informal request for payment is not necessarily a substitute for a properly presented contract claim.

Can a Contractor Recover Interest on a Contract Claim?

Yes. Under the Prompt Payment Act, a contracting officer lacks authority to award interest once the matter has matured into a formal contract claim governed by the Contract Disputes Act.

However, this is where the interest provisions of the Contract Disputes Act and FAR 33.208 come into play. Under these provisions, if a contractor’s claim is granted by the contracting officer or by a board or court of competent jurisdiction, the government is required to pay interest on the claim from the date the contracting officer receives the claim through the date of payment.

What Documents Should a Contractor Gather Before Pursuing a Payment Dispute?

Before escalating a payment problem, contractors should assemble a complete payment file. At a minimum, consider gathering:

• The prime contract and applicable modifications;
• Task or delivery orders;
• Applicable payment and disputes clauses;
• Invoices;
• Proof of invoice submission and receipt;
• Receiving reports;
• Acceptance documentation;
• Contracting officer correspondence;
• Payment-office correspondence;
• Records of rejected or corrected invoices;
• Relevant contract-performance records;
• Timesheets or other supporting cost records, when applicable;
• Subcontractor and supplier-payment records;
• Government direction affecting the work; and
• A chronology showing when the contractor performed, invoiced, communicated with the government, and received—or did not receive—payment.

A clear chronology can be particularly valuable when determining whether a matter is simply a late payment or a broader contract claim.

Should a Federal Contractor Contact a Lawyer About a Delayed Government Payment?

A contractor should consider obtaining legal advice when a payment problem involves more than a straightforward administrative delay. Examples include situations where:

• The government disputes whether the work was properly performed;
• The government refuses to pay an otherwise valid invoice;
• The government is withholding a substantial amount;
• The contractor believes the government caused additional costs;
• The contracting officer has rejected a claim;
• A cure notice, show cause notice, or termination issue is involved;
• The government alleges defective performance or noncompliance;
• A contractor is considering submitting a claim;
• The amount in dispute is significant; or
• A deadline for a claim or appeal may be approaching.

Early legal review can help a contractor identify the applicable contract provisions, preserve its rights, and avoid turning an administrative payment problem into a larger contractual dispute.

What Should Contractors Do When Payment Is Delayed?

A delayed federal payment should be treated as a contract-management issue, not merely an accounting problem. The first step is to determine why the payment is late. If the issue is a defective invoice, correcting the problem may resolve it. If the government improperly rejected a proper invoice, the contractor may need to establish the original submission date and seek applicable interest. If the government disputes the contractor’s entitlement to payment, the matter may require a formal claim under the Contract Disputes Act. Most importantly, contractors should document the problem and act before applicable deadlines expire.

Frequently Asked Questions

• How long does the federal government have to pay a contractor?
  There is no single payment deadline that applies identically to every federal contract. The applicable deadline depends on the contract, the applicable payment clause, the type of contract, invoice requirements, acceptance, and other circumstances. FAR Subpart 32.9 and the contract’s payment provisions should be reviewed to determine the applicable due date.
• Can a federal contractor charge the government interest for late payment?
  A contractor may be entitled to a Prompt Payment Act interest penalty when the requirements of the applicable payment clause are satisfied. A separate interest remedy may also apply to amounts found due on a contract claim under the Contract Disputes Act.
• What if the government says my invoice is defective?
  Determine precisely what information or documentation the government believes is missing or incorrect. If the invoice was actually proper and was erroneously rejected, the original receipt date may remain relevant when calculating the payment due date and any applicable interest penalty.
• What if the government refuses to pay because it disputes my performance?
  A substantive disagreement about performance, contract compliance, entitlement, or the amount owed may constitute a contract dispute rather than an ordinary late-payment issue. The contractor may need to submit a written contract claim to the contracting officer under the applicable disputes procedures.
• How long does a federal contractor have to submit a contract claim?
  Under FAR 33.206 and the Contract Disputes Act, contractor claims generally must be submitted in writing to the contracting officer within six years after accrual, unless the parties agreed to a shorter period. Specific contracts and circumstances can affect the analysis.

Need Help With a Delayed Federal Government Payment?

A delayed government payment can quickly become a significant cash-flow and contract issue. Contractors should determine whether the problem involves an invoice-processing delay, a payment dispute, a government withholding, or a potentially compensable contract claim.

If the government has failed to pay an invoice, disputed your entitlement to payment, or rejected a claim, experienced government contracts counsel can review the contract, payment history, correspondence, and applicable deadlines and help determine what remedies may be available.

 

Aron C. Beezley is the co-leader of Bradley’s nationally-ranked Government Contracts Practice Group. He was named the Law360 “MVP of the Year” for Government Contracts in 2025 and is nationally recognized for his government contracts practice by Chambers USA, Law360, Benchmark Litigation, and Super Lawyers. Beezley’s experience includes representation of government contractors in numerous industries and in all aspects of the government-contracting process, including negotiation, award, performance, and termination. He can be reached at abeezley@bradley.com or 202.719.8254.

 

Owen E. Salyers is an Associate in Bradley’s Construction and Government Contracts Practice Groups. He advises clients on all aspects of the government procurement cycle, including proposal assembly, bid protests, contract administration and compliance assistance, internal investigations, dispute avoidance, claim preparation and management, and dispute resolution. Salyers can be reached at osalyers@bradley.com or 704.338.6142.

 

Republished with permission. The article, “The Government is Delaying Payment: What Can a Federal Contractor Do?,” was originally published on GovCon Source by Bradley Arant Boult Cummings LLP. Copyright 2026.