A new legislative proposal, Senate Bill 5176, aims to enhance financial accountability among public bodies in Washington State by mandating timely payments for public works and services. Introduced on January 24, 2025, the bill stipulates that state agencies, counties, cities, and other public entities must pay interest at a rate of one percent per month—minimum one dollar—on overdue payments related to contracts for public works, personal services, goods, and travel.

The bill seeks to address the persistent issue of delayed payments that contractors often face, which can hinder project timelines and financial stability for businesses. Under SB 5176, payments are considered timely if made within 30 days of receiving a properly completed invoice or goods and services. Notably, if a payment is withheld due to unsatisfactory performance, public bodies are required to notify contractors within eight working days, detailing the reasons for the delay and necessary remedial actions.

The proposal has sparked discussions among lawmakers and stakeholders, with proponents arguing that it will protect small businesses and ensure fair treatment in public contracting. Critics, however, express concerns about the potential administrative burden on public agencies and the implications for project funding, particularly those reliant on federal grants.

As the bill progresses through the legislative process, its implications could reshape the landscape of public contracting in Washington, potentially leading to faster payments and improved cash flow for contractors. If passed, SB 5176 could set a precedent for similar legislation in other states, emphasizing the importance of timely financial transactions in public sector dealings.