Prompt Payment Act

In accordance with the California Prompt Payment Act, properly submitted, undisputed invoices must be paid within 45 calendar days of receipt. In practice, the 45 day period is broken down as follows:

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26

	15 calendar days for Caltrans District processing
	15 calendar days for Caltrans Accounting processing
	15 calendar days for the State Controller's office to get the payment to the consultant

The key to meeting the 45-day deadline is getting the certified invoice to Accounting before the first 15-day period is up. Extending processing time in the District or Accounting puts Caltrans at risk of penalty assessments.

Late payment to the consultant can result in an automatic penalty payment granted to the consultant.

The State Controller's Office calculates penalties for Caltrans, and the Division responsible pays for its share of the penalties.

• Penalties are charged against the appropriation, not the contract balance.
• Late submittals from the district result in penalty payments charged to Project ID 0000001373 (EA 961375), FA, object code 7, 171 with the district number and unit.

The money for the penalties is charged to the allocation of the Division responsible for the delay, and the State Controller's Office adds the amount of the penalties onto the check for the amount due from the invoice. If you need more information on the Prompt Payment Act, see the prompt payment guide on the Division of Accounting's website: http://onramp.dot.ca.gov/hq/accounting/Accounting_Manual/chapter12/12-08.htm

Prompt Payment Act's Relation to Prevailing Wage Requirements

By the terms of the contract, the consultant shall submit certified payrolls for all prevailing wage work. Submission of the payrolls is a condition of payment. Caltrans does not violate the Prompt Payment Act when it delays payment due to the consultant's failure to include required certified payrolls.

Labor Code Section 1771 requires Caltrans to withhold contract payments when certified payroll records are delinquent or inadequate. Such withholding does not violate Prompt Payment Act requirements.