What is one potential risk of failing to adhere to the Prompt Payment Act?

Failing to adhere to the Prompt Payment Act can lead to increased penalties and fines, which is a significant risk for organizations involved in government procurement and contracting. This act is designed to ensure that contractors and vendors are paid promptly for their goods and services. When an organization does not comply with the timelines and requirements set forth by this act, penalties can be imposed, including interest on late payments and potential litigation costs. These financial repercussions can escalate quickly, resulting in a greater fiscal burden for the organization and potentially damaging its relationships with vendors and contractors. Understanding this risk is critical for ensuring compliance and maintaining positive business relationships.

On the other hand, the other options suggest outcomes that typically do not arise from noncompliance with the Prompt Payment Act. Improved vendor reputation, enhanced budget forecasts, and lower operational costs are generally positive results that would not be expected from failing to meet legal and contractual payment obligations.