§ 4-06 Prompt Payment.
RCNY § 4-06
(a)Policy. It is the policy of the City of New York to process contract payments efficiently and expeditiously so as to assure payment in a timely manner to firms and organizations that do business with the City.
(b)Definitions. In this section, the following words have the meanings indicated. Applicable Interest Rate. Interest shall be the maximum amount allowed by law or such lower uniform interest rate as may be set jointly by the Comptroller and OMB. Designated Billing Office. The office or employee designated in the contract to which a proper invoice is to be submitted by a contractor. Discount Date. The date by which, if payment is made, a specified invoice payment reduction, or discount, can be taken. Invoice Received or Acceptance Date ("IRA Date") – Goods and Services.
(i)For purposes of determining a payment due date for goods and services and the date on which interest will begin to accrue and for no other purpose, an invoice received or acceptance date ("IRA date") is defined as the later of: (A) the date a proper invoice is actually received by the designated billing office if the agency annotates the invoice with the date of receipt at the time of receipt, or (B) the seventh day after either the date on which the goods are actually delivered or the services are actually performed, unless: ((a)) the agency has actually accepted and approved the goods or the services before the seventh day (in which case the acceptance date shall substitute for the seventh day after the delivery or performance date), or ((b)) a longer acceptance period is required by law or included in the contract to afford the agency a practicable opportunity to inspect, test, and accept the goods or evaluate the services (in which case the date of actual acceptance or the date on which such longer acceptance period ends shall substitute for the seventh day after the delivery or performance date). Invoice Received or Acceptance Date ("IRA Date") – Construction and Construction-Related Services. For construction, for purpose of determining a payment due date and the date on which interest will begin to accrue and for no other purpose, an invoice received or acceptance date ("IRA date") is defined as the date when the field engineer certifies on the payment requisition that the work has been accepted. Proper Invoice. A written request for a contract payment that is submitted by a vendor in good faith setting forth the description, price, and quantity of goods or services delivered or rendered, in such form and supported by such documentation as an agency may require, and any other documents required by contract. Required Payment Date or Interest Eligibility Date. The date by which a contract payment must be made in order for an agency not to become liable for interest payments. Receiving Report. This report may be used by a receiving unit to inform others, such as the purchasing, warehousing, accounting, and quality assurance departments, of the receipt of goods purchased or acceptance of services rendered. A receiving unit may, in some cases, also verify that goods and services conform to specification requirements and may include on the receiving report evidence of the acceptance of the goods and services. Retainage. The right of the City pursuant to a contract and/or law to withhold from the invoice and retain a specified percentage of payment until such time as it is to be released pursuant to the contract and/or law.
(c)Standards for prompt payment.
(1)Starting the payment period. The period available to an agency to make a timely payment of an invoice without incurring an interest penalty shall begin on the IRA date.
(2)Required payment date. The required payment date shall be: (i) thirty days; or (ii) in the case of contract changes, sixty days; or (iii) in the case of substantial completion payments or final payments on construction contracts, sixty days after the IRA date, except as described in paragraph (3) below; or (iv) except as provided in subdivision (d)(4)(iv), the required payment date for the release of retained amounts shall be in accordance with the contract and law, and thirty days after the submission of a proper invoice for the return of the retained amounts.
(3)Extension of the required payment date. The date by which a contract payment may be made without the payment of interest may be extended by the time taken to satisfy or rectify any of the following: (i) the Comptroller, in the course of an audit, determines that there is reasonable cause to believe that payment may not be properly due, in whole or in part, due to fault of the vendor; (ii) the necessary City, State, or federal government appropriation required to authorize payment has not been made; (iii) a proper invoice must be examined by the State or federal government prior to payment; (iv) the goods have not been delivered or the construction or services have not been performed in compliance with the terms and conditions of the contract; (v) in the case of substantial or final payments on construction contracts, the ACCO determines that the vendor has failed to properly submit the necessary documents and other submissions prescribed by the contract specifications and requirements or by law in order to enable the agency to process the final payment properly and expeditiously; and (vi) when the required payment date falls on a weekend or City holiday, the required payment date shall be extended to the next following business day.
(4)Proper invoice required to initiate payment. A proper invoice submitted by the vendor shall be required to initiate payment, except where the contract provides that the vendor will be paid at predetermined intervals without having to submit an invoice for each scheduled payment.
(5)Receipt and acceptance of goods and services. Agencies shall ensure that receipt and acceptance are executed within seven days unless otherwise specified in the contract. Receiving reports and invoices shall be stamped or otherwise annotated with the date upon receipt in the designated billing office.
(d)Interest eligibility and computation.
(6)The Comptroller and OMB may, for a limited period of time not to exceed thirty days per calendar year, jointly defer the City's obligation to pay interest when the City is experiencing a shortage of cash. In such event, the CCPO shall provide, at the earliest practicable opportunity, written notice to ACCOs of this action and its expected duration. Notice of this action shall be published by the CCPO in the City Record as soon as is practicable after such determination is made, not to exceed thirty days. The CCPO shall provide similar written notice of subsequent action either to extend or cancel this period of deferral.
(e)Additional requirements for construction and construction-related services contracts.
(ii)If a prime contractor is paid interest earned due to late payments by an agency, the proportionate share of that interest shall be forwarded by the prime contractor to each of its subcontractors and vendors.
(f)Determination of appropriations against which interest penalties shall be charged. Except where otherwise required by law, an interest payment required by these Rules shall be paid from the agency expense budget of the agency awarding the contract, provided however that if the obligation to make an interest payment is incurred in whole or in part due to another agency's involvement in the payment process, then the portion of the total interest payment that is attributable to delays by that agency shall be charged to that agency's miscellaneous budget.
(g)Responsibilities. Each Agency Head is responsible for the following: (1) assuring timely payments and the payment of interest penalties where required; (2) publishing lists of designated agency contacts within their payment centers or finance offices to provide vendors with assistance in determining the status of their invoices; (3) issuing internal instructions, as necessary, to implement these Rules. Such instructions shall include provisions for monitoring the causes of any interest penalties incurred, taking necessary corrective or disciplinary action, and dealing with inquiries from vendors; (4) assuring that effective control systems are established and maintained to provide reasonable assurance that administrative activities required under these Rules are effectively and efficiently carried out; (5) assuring that inspectors general and internal auditors periodically review implementation, as they and their Agency Head deem appropriate. Copies of reports on audits and reviews should be provided to the CCPO and Comptroller upon issuance.
(h)Reporting Requirements. PPB shall coordinate and publish an annual prompt payment performance report detailing each agency's performance pursuant to Section 332 of the Charter. PPB shall additionally make cumulative prompt payment performance statistics available upon request. All reports shall be distributed to the CCPO, OMB, and Comptroller and shall be posted on the City's website in a location that is accessible by the public simultaneously with their publication.
