Virginia House Bill HB818

Virginia 2022 Regular Session

• Introduced: 1/12/22
• Refer: 1/12/22

Caption

Virginia Public Procurement Act; prompt payment of bills by state agencies, etc.

Impact

The impact of HB818 is predominantly felt within the procurement processes of state agencies. By enforcing prompt payment practices, the bill is expected to improve the cash flow for companies providing goods and services to the state, thereby fostering a healthier business environment. This modification is particularly beneficial for smaller contractors and subcontractors who often face delays in receiving payments that can critically affect their operations. The intent is to promote financial stability and bolster relationships between the state and its vendors.

Summary

House Bill 818 amends the Virginia Public Procurement Act to establish requirements for prompt payment by state agencies for goods and services acquired from privately owned enterprises. This legislation seeks to ensure that state agencies fulfill their contractual obligations in a timely manner, specifically mandating that payments should be made by the designated payment date set out in contracts. A significant aspect of this bill is the stipulation that final payments to prime contractors cannot occur without confirmation that all subcontractors have been paid in full, aiming to protect the interests of those involved in the supply chain.

Contention

There may be concerns regarding the enforcement mechanisms embedded within HB818, especially how compliance will be monitored and the implications for state agencies that fail to adhere to the new payment requirements. Questions could arise about potential administrative burdens for agencies and how they will manage cash flow when dealing with multiple contracts and various delivery timelines. Furthermore, the bill's requirement for prime contractors to ensure payment to subcontractors reflects a move towards improved accountability but may also lead to complications in contractual relationships if not managed effectively.