Steve McBrady

The Prompt Payment Act requires the government to pay an interest penalty when it fails to make a payment by the required payment date. But, for CDA statute of limitations purposes, when does that penalty claim accrue?   This issue was addressed in the recent Public Warehousing Co. (May 2, 2016) decision, where the Board held the SOL on a contractor’s claim for interest penalties under the PPA does not accrue until the government actually makes the underlying payment.  Rejecting the government’s argument that the interest claim should accrue as soon as government fails to make the underlying payment, the Board held that “the events that fix the government’s alleged liability and allow a claim for interest penalties to be asserted do not occur until the government pays the underlying invoice without paying the interest penalty due.”