CTCM Contract Financing and Payment Management 1

Question 1

Under Texas prompt payment law, what is the standard deadline for a state agency to pay a vendor invoice after approval?

Accepted Answer

30 days

Answer

Texas Government Code Chapter 2251 requires state agencies to pay properly submitted and approved vendor invoices within 30 days to avoid interest penalties.

Question 2

What interest rate applies to late payments by Texas state agencies under the Texas Prompt Payment Act?

Accepted Answer

A rate set by the Texas Comptroller each fiscal year

Answer

The Texas Prompt Payment Act specifies that the interest rate on late payments is established annually by the Texas Comptroller of Public Accounts.

Question 3

A contract manager receives an invoice that does not match the agreed contract price. What is the correct first step?

Accepted Answer

Return the invoice as defective and notify the vendor in writing

Answer

A defective invoice that does not conform to contract terms must be returned to the vendor with written notice specifying the defects, which resets the prompt payment clock.

Question 4

Which payment method is most appropriate for Texas state contracts involving ongoing services delivered over time?

Accepted Answer

Progress payments tied to milestones or deliverables

Answer

Progress payments tied to milestones or deliverables align payment to actual performance, reducing risk and ensuring the state receives value before full payment.

Question 5

When a Texas state contract includes a retainage provision, what is the primary purpose of withholding a portion of payment?

Accepted Answer

To ensure the contractor completes all work satisfactorily before final payment

Answer

Retainage withholds a percentage of earned payments as financial incentive and security to ensure the contractor fully completes all contract requirements before receiving final payment.

CTCM - Certified Texas Contract Manager Practice Test

CTCM - Certified Texas Contract Manager Practice Test

CTCM Contract Financing and Payment Management 1