7 Days. On a federal construction contract, the prime must put a clause in your subcontract that requires paying you for satisfactory work within 7 days after the prime receives the government's payment. It must also owe interest on late amounts. Check that the clause is in your subcontract, then track the date the prime was paid.
General info, not legal or financial advice. Your subcontract terms matter.
What does the federal 7-day rule actually say?
The rule comes from the Prompt Payment Act at 31 U.S.C. 3905: https://www.govinfo.gov/link/uscode/31/3905?type=usc&year=mostrecent&link-type=html . FAR 52.232-27 turns it into contract language: https://www.acquisition.gov/far/52.232-27
Paragraph (c) of that clause requires the prime to include three things in each subcontract:
- A payment clause to pay the sub for satisfactory performance within 7 days of receiving payment for that work
- An interest penalty clause for late payments, at the rate Treasury sets for these interest payments
- A flowdown clause so each sub passes the same terms to its own subs and suppliers
Material suppliers count. The statute covers subcontracts for property or services, including a material supplier.
Subs online ask why GC payments run so long. Others point out that a performance bond protects the owner, not an unpaid sub. On federal work, the 7-day clause is one of the sub's own protections.
When can a prime hold back money under the clause?
The rule does not ban retainage or withholding. It sets conditions on them.
Retainage is allowed if your subcontract sets a percentage. Holding it does not trigger the late interest. A prime may also withhold part of a payment under the subcontract for a performance problem. To avoid interest, it must give you written notice. Under FAR 52.232-27(g), that notice states the amount, the specific causes and what you must do to get paid. A copy goes to the contracting officer.
Once you correct the problem, the clause requires payment within 7 days, or interest starts. A late payment with no written notice is a different situation than a withholding with one. Keep every notice you receive.
How do you find out whether the prime has been paid?
Ask the government. Under FAR 32.112-2, when a sub or supplier asks, the contracting officer shall promptly say whether the prime has submitted payment requests and whether final payment was made: https://www.acquisition.gov/far/32.112-2 . This applies to contracts other than for commercial products or services.
If you assert that you were not paid under your subcontract terms, FAR 32.112-1 lets the contracting officer check the prime's compliance. The officer may encourage the prime to pay or, where the payment clauses allow, reduce or suspend the prime's payments: https://www.acquisition.gov/far/32.112-1
Find the contract number in your subcontract, and send a short email to the contracting officer named on the prime contract. Stick to dates, amounts and the question.
Worked example
All names and numbers are made up.
Granite Line Concrete billed $86,000 for October work on a federal building job. The agency paid the prime on November 3, so the 7-day date was November 10. Payment arrived November 24, 14 days late. Treasury lists a Prompt Payment rate of 4.75% for July 1 to December 31, 2026: https://fiscal.treasury.gov/payments-from-government/prompt-payment . At that rate, simple interest on $86,000 for 14 days is about $157. Confirm the rate your clause points to. The bigger cost was two payrolls covered from the operating account while the money sat with the prime.
What should you do this week on a federal sub job?
- Find the prompt payment and interest language in your subcontract, and note the FAR 52.232-27 reference.
- Log the date you submitted each pay request and the period it covers.
- Ask the prime, in writing, the date it received each government payment.
- If a payment passes 7 days, send a short written request that cites the clause and the amount.
- If you get no answer, email the contracting officer under FAR 32.112-2.
- Keep every withholding notice, with the amount, causes and fix requested.
A clean pay request makes the clock easier to prove. Start with the contractor funding guide at https://mcafax.com/notebook/construction-business-loans and compare paths at https://mcafax.com/notebook/where-to-get-business-funding .
