BOP Program Statement 2011.13 § 8

The additional penalty payment has two parts, all interest due to the current date and the additional

penalty.

a. Requirements. The vendor must request the additional penalty in writing, no later than 40

days after the date payment is made. To be a valid request:

■ The request must be postmarked by the 40th day after payment was made.

■ If there is no postmark, the request is valid if the designated agency office receives and

annotates or stamps it with the date of receipt by the 40th day.

■ If the request is not annotated or stamped with the date of receipt, it is valid if the date placed

on the request by the vendor is within the 40-day period.

The request must specifically assert that late payment interest is due on a specific invoice and

request payment of all overdue late payment interest and any additional penalty that may be

required. A copy of the invoice on which the lat e payment interest was due but unpaid must be

attached; as well as a statement that payment for the principal was received and the date of receipt.

b. Vendor Entitlement. A vendor is entitled to an additional penalty payment when the

vendor:

■ Is owed a late payment interest penalty of $1.00 or more.

■ Receives a payment dated after the due date that does not include an interest penalty or is less

than what is owed.

P2011.13 5/29/2014 14

■ Is not paid the interest penalty by the agency within 10 days after the payment is made.

c. Penalties. The additional penalty is equal to 100 percent of the original late payment

interest penalty. For example, if the original late payment interest penalty is $100, the additional

penalty will be $100.

Regardless of the amount of the late payment interest penalty, the additional penalty must not be

less than $25 or greater than $5,000. For example, if the additional penalty is $12, the vendor will

receive an additional penalty of $25.

The additional penalty does not apply to utility bills; late payments for these are determined

through the rate-setting process.

Example:

Invoice Amount: $15,000

Due Date: April 30

Date paid: June 13

Interest Rate: 7%

Overdue Days: 44

Interest Due as of June 13: $128.57

Interest Due June 13-August 4: $1.29

On July 21, a written request is received from the vendor for payment of the overdue late payment

interest and an additional penalty. The vendor’s written request was within 40 days of payment

being made (June 13 + 40 days = July 23). The vendor is entit led to the additional penalty.

The institution now owes the vendor as follows:

Interest unpaid June 13: $128.57

Interest due June 13 to August 4: $ 1.30

Additional interest penalty: $128.57

(100% of the interest due but not paid on June 13)

Total amount due to the vendor: $258.44