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Chamber: Unrealistic $100 penalty on delayed payment to vendors
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Posted on Jun 15 2011
The Saipan Chamber of Commerce describes as “unrealistic” a bill that imposes a $100 civil fine on government employees who fail to promptly process or pay the CNMI government’s vendors and suppliers.
Chamber president Douglas Brennan said while the organization supports the intent of House Bill 17-146, it argues against unrealistic measures “until such time the CNMI can afford the penalties and actions” under the bill.
The Saipan Chamber of Commerce is the largest business organization in the CNMI with some 150 members.
“While SCC finds the intent of HB 17-146 commendable and agrees with its findings where the CNMI is experiencing difficulty in paying its vendors in a timely manner, we offer that questions remain as to the ability of the CNMI government to make those timely payments on government purchases after incurring additional burden through the penalty and interest judgments as outlined in HB 17-146,” Brennan said in a letter to Rep. Ray Yumul (R-Saipan).
Yumul, the author of the bill, said the Chamber’s concerns will be considered along with other comments received.
Once the bill becomes law, it will authorize payments “no later than 30 days after payment becomes due.” This, however, does not include tort obligations.
In the Judiciary and Governmental Operations Committee’s report, it said significant delays in the receipt of invoices and the issuance of payments by the CNMI government “negatively impact a company’s finances and inevitably jeopardize its operations.”
The bill says it is necessary to ensure the vendors’ trust by ensuring that the Department of Finance strictly adheres to processes of acceptance, timely processing, and ultimately prompt payment to vendors.
The House, however, has yet to act on the bill, over a month after the JGO Committee completed its report.
