ALP 23

CHARGES FOR DELINQUENT PAYMENTS
(a) The Contractor shall be subject to interest, administrative, and penalty charges on
delinquent payments. If a payment is not received by the due date, the Contractor shall pay an
interest charge on the delinquent payment for each day the payment is delinquent beyond the due
date. If a payment becomes 60 days delinquent, the Contractor shall pay, in addition to the
interest charge, an administrative charge to cover additional costs of billing and processing the
delinquent payment. If a payment is delinquent 90 days or more, the Contractor shall pay, in
addition to the interest and administrative charges, a penalty charge for each day the payment is
delinquent beyond the due date, based on the remaining balance of the payment due at the rate of
6 percent per year. The Contractor shall also pay any fees incurred for debt collection services
associated with a delinquent payment.
(b) The interest rate charged shall be the greater of either the rate prescribed quarterly in
the Federal Register by the Department of the Treasury for application to overdue payments, or
the interest rate of 0.5 percent per month. The interest rate charged will be determined as of the
due date and remain fixed for the duration of the delinquent period.
(c) When a partial payment on a delinquent account is received, the amount received
shall be applied first to the penalty charges, second to the administrative charges, third to the
accrued interest, and finally to the overdue payment.