How fast does the government have to pay a progress payment?

The due date is 14 days after the designated billing office receives a proper payment request, unless the contract sets a longer period to allow inspection.

Why was my invoice sent back?

An invoice missing any required item is not a proper invoice. The billing office must return it within 7 days after receipt with the reasons, and the due date is counted from receipt of a proper invoice.

Can the government hold back part of my payment?

Yes, if satisfactory progress has not been made the contracting officer may retain up to 10 percent of a progress payment until it is, and releases most withheld funds when the work is substantially complete.

Guide

How does a veteran-owned trade contractor get paid on a federal construction contract?

Updated October 27, 2026

On a fixed-price federal construction contract, the government makes progress payments monthly as the work proceeds, or more often if the contracting officer decides, based on approved estimates of work accomplished. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts] A progress payment is due 14 days after the designated billing office receives a proper payment request, and a final payment is due 30 days after the later of a proper invoice or government acceptance. [FAR 52.232-27, Prompt Payment for Construction Contracts] Payment goes by electronic funds transfer to the banking information in your SAM.gov registration. [FAR 52.232-33, Payment by Electronic Funds Transfer, System for Award Management]

Progress payments and what each request must show

Progress payments are made on estimates of work accomplished that meet the contract’s quality standards, as approved by the contracting officer. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts] Each request must itemize the amounts requested against the elements of work in the contract, list the amount included for work by each subcontractor, the total amount of each subcontract, and the amounts already paid to each subcontractor, plus any other supporting data the contracting officer requires. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts] The contracting officer may count material delivered on the site and preparatory work, and material stored elsewhere only if the contract allows it and you show you own it and will use it on the job. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts]

Every progress payment request must carry a signed certification, or payment will not be made. You certify that the amounts are only for work done under the contract, that subs and suppliers have been paid from earlier payments and will be paid on time from this one, and that the request does not include amounts you plan to hold back from a sub. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts]

When the money is due

Under the Prompt Payment clause for construction, a progress payment is due 14 days after the designated billing office receives a proper payment request. [FAR 52.232-27, Prompt Payment for Construction Contracts] The contracting officer may set a longer period in the solicitation and contract to allow time to inspect the work, and must document why. [FAR 32.904, Determining payment due dates] The final payment, and payment for any separately priced building or division of the job that has been accepted, is due on the later of the 30th day after the billing office receives a proper invoice or the 30th day after government acceptance. [FAR 52.232-27, Prompt Payment for Construction Contracts] Final payment also requires completion and acceptance of all work, a properly executed voucher, and a release of all claims against the government, other than claims you specifically list as excepted. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts]

If payment is late and the conditions in the clause are met, the payment office pays an interest penalty automatically, without a request from you. When the due date falls on a weekend or legal holiday, payment the next working day is not late. [FAR 52.232-27, Prompt Payment for Construction Contracts]

What makes an invoice proper

The clock does not start until the billing office has a proper invoice. It must include your name and address, invoice date and number, the contract number with order and line item numbers, a description of the work, payment terms, the name and address of the official to be paid (matching the contract), and a contact person for a defective invoice. [FAR 52.232-27, Prompt Payment for Construction Contracts] Progress payment requests also need the substantiation and certification described above, and the invoice must include anything else the contract requires. [FAR 52.232-27, Prompt Payment for Construction Contracts] If an invoice is not proper, the billing office must return it within 7 days with the reasons. [FAR 52.232-27, Prompt Payment for Construction Contracts]

Payment must also be backed by a receiving report or other government document authorizing payment, which shows the date the government official accepted the work or approved the progress payment. [FAR 32.905, Payment documentation and process] Submit invoices to the designated billing office named in the contract. [FAR 52.232-27, Prompt Payment for Construction Contracts]

Retainage

If you made satisfactory progress during the period, the contracting officer authorizes payment in full. If not, the contracting officer may retain up to 10 percent of the payment until satisfactory progress is achieved. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts] When the work is substantially complete, the contracting officer may keep an amount adequate to protect the government and releases the rest of the withheld funds. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts] Retained amounts are due as the contract states, or if it is silent, 30 days after the contracting officer approves release. [FAR 52.232-27, Prompt Payment for Construction Contracts] On request, progress payments also reimburse premiums you paid for performance and payment bonds once you show full payment to the surety, and retainage does not apply to that portion. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts] For the bonds themselves, see our guide to bonding for a first federal construction job.

Get your SAM.gov banking information right

All payments are made by electronic funds transfer using the banking information in the System for Award Management, and you are responsible for updating SAM when that information changes. [FAR 52.232-33, Payment by Electronic Funds Transfer, System for Award Management] If your SAM banking information is wrong, the government does not have to pay until it is corrected, and your invoice is not treated as a proper invoice for prompt payment purposes. [FAR 52.232-33, Payment by Electronic Funds Transfer, System for Award Management] If a transfer goes astray because your information was wrong, or you changed it within 30 days of the payment being released, and the money has left the payment office, the government is deemed to have paid and recovering the funds is on you. [FAR 52.232-33, Payment by Electronic Funds Transfer, System for Award Management] Keep your registration current by renewing it every 365 days. [SAM.gov, Entity registration]

Defense jobs use Wide Area WorkFlow

On Department of Defense contracts, payment requests and receiving reports must be submitted electronically, and the only acceptable electronic form is Wide Area WorkFlow, with limited exceptions. Fax, email, and scanned documents are not acceptable. [DFARS 232.7002, Electronic payment requests policy] To use it, you need a designated electronic business point of contact in SAM and you must self-register at the Wide Area WorkFlow site, which also offers web-based training and a practice site. [DFARS 252.232-7006, Wide Area WorkFlow Payment Instructions] The contract’s payment instructions clause tells you which document type to submit. [DFARS 252.232-7006, Wide Area WorkFlow Payment Instructions]

Paying your subcontractors

The Prompt Payment clause requires you to put a payment clause in each subcontract that obligates you to pay the sub for satisfactory performance no later than 7 days after you receive payment for it, plus an interest penalty clause for late payments, and to require subs to flow both down to their own subs and suppliers. [FAR 52.232-27, Prompt Payment for Construction Contracts] You may still negotiate retainage in a subcontract, and you may withhold for a sub’s deficient work if you give the required written notice and send a copy to the contracting officer. [FAR 52.232-27, Prompt Payment for Construction Contracts]

Agencies aim to make accelerated payments to small business contractors, with a goal of 15 days after receipt of a proper invoice and all other required documentation when the contract sets no specific payment date. That goal does not create new Prompt Payment Act rights. [FAR 32.009-1, Accelerated payments to small business contractors] When your contract includes the accelerated payments clause, you pass that speed on: within 15 days of receiving accelerated payment, you pay your small business subs to the maximum extent practicable, with no fee charged to them. [FAR 52.232-40, Providing Accelerated Payments to Small Business Subcontractors] For how much of the job you can sub out at all, see our guide to limitations on subcontracting.

Common questions

How often can I bill on a federal construction job?: The fixed-price construction payments clause provides for progress payments monthly as the work proceeds, or at more frequent intervals if the contracting officer decides. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts]
How fast does the government have to pay a progress payment?: The due date is 14 days after the designated billing office receives a proper payment request, unless the contract sets a longer period to allow inspection. [FAR 52.232-27, Prompt Payment for Construction Contracts] [FAR 32.904, Determining payment due dates]
Why was my invoice sent back?: An invoice missing any required item is not a proper invoice. The billing office must return it within 7 days after receipt with the reasons, and the due date is counted from receipt of a proper invoice. [FAR 52.232-27, Prompt Payment for Construction Contracts]
Can the government hold back part of my payment?: Yes, if satisfactory progress has not been made the contracting officer may retain up to 10 percent of a progress payment until it is, and releases most withheld funds when the work is substantially complete. [FAR 52.232-5, Payments under Fixed-Price Construction Contracts]
How fast do I have to pay my subs?: Your subcontracts must require payment for satisfactory performance no later than 7 days after you receive payment for that work, with an interest penalty clause for late payment. [FAR 52.232-27, Prompt Payment for Construction Contracts]

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Sources

Checked against these sources on October 27, 2026. Rules change, so always read the current solicitation and regulation. This guide is general information, not legal advice.