A. No warrant, check or other negotiable instrument shall be issued in payment for any purchase of services, construction or items of tangible personal property unless the central purchasing office or the using agency certifies that the services, construction or items of tangible personal property have been received and meet specifications or unless prepayment is permitted under Section 13-1-98 NMSA 1978 by exclusion of the purchase from the Procurement Code. B. Unless otherwise agreed upon by the parties or unless otherwise specified in the invitation for bids, request for proposals or other solicitation, within fifteen days from the date the central purchasing office or using agency receives written notice from the contractor that payment is requested for services or construction completed or items of tangible personal property delivered on site and received, the central purchasing office or using agency shall issue a written certification of complete or partial acceptance or rejection of the services, construction or items of tangible personal property. C. Except as provided in Subsection D of this section, upon certification by the central purchasing office or the using agency that the services, construction or items of tangible personal property have been received and accepted, payment shall be tendered to the contractor within thirty days of the date of certification. If payment is made by mail, the payment shall be deemed tendered on the date it is postmarked. After the thirtieth day from the date that written certification of acceptance is issued, late payment charges shall be paid on the unpaid balance due on the contract to the contractor at the rate of one and one-half percent per month. For purchases funded by state or federal grants to local public bodies, if the local public body has not received the funds from the federal or state funding agency, payments shall be tendered to the contractor within five working days of receipt of funds from that funding agency. D. If the central purchasing office or the using agency finds that the services, construction or items of tangible personal property are not acceptable, it shall, within thirty days of the date of receipt of written notice from the contractor that payment is requested for services or construction completed or items of tangible personal property delivered on site, provide to the contractor a letter of exception explaining the defect or objection to the services, construction or delivered tangible personal property along with details of how the contractor may proceed to provide remedial action. E. Late payment charges that differ from the provisions of Subsection C of this section may be assessed if specifically provided for by contract or pursuant to tariffs approved by the New Mexico public utility commission or the state corporation commission [public regulation commission]. History: Laws 1984, ch. 65, § 131; 1987, ch. 348, § 17; 1989, ch. 334, § 1; 1993, ch. 282, § 15; 1997, ch. 104, § 1; 1997, ch. 222, § 1. Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law. Laws 1998, ch. 108, § 80 provided that all references to the state corporation commission be construed as references to the public regulation commission. The 1997 amendment, effective June 20, 1997, deleted "state" preceding "central purchasing office" and "state" preceding "using agency" throughout the section; deleted "by the state" following "received" in Subsection B; in Subsection C, added "Except as provided in Subsection D" and substituted "thirty" for "sixty" in the first sentence, added the second sentence, substituted "thirtieth" for "sixtieth" in the third sentence and added the last sentence; and added Subsection D and redesignated former Subsection D as Subsection E. Laws 1997, ch. 104, § 1 and Laws 1997, ch. 222, § 1, enacted identical amendments to this section. The 1993 amendment, effective June 18, 1993, inserted "unless" preceding "prepayment" in Subsection A; and in Subsection D, substituted "New Mexico public utility commission" for "New Mexico public service commission" and made a stylistic change. Prepayment prohibition applies to tangible personal property, services and construction. — Each subsection of 13-1-158 NMSA 1978 governing payment for purchases, including the prohibition on prepayment, specifically references "services" in addition to construction or items of tangible personal property, and therefore a central purchasing office or procuring agency is prohibited from prepaying for the purchase of any service or construction, unless prepayment is authorized by exemption of the purchase under 13-1-98 NMSA 1978. 2024 Op. Ethics Comm'n No. 2024-04. Section does not allow partial payment prior to certification of receipt of services, construction or items of tangible property. — Section 13-1-158(A) NMSA 1978 prohibits the payment of any warrant, check or negotiable instrument unless an exception applies or the agency certifies the services, construction, or items of tangible property have been received and meet specifications, and therefore a partial payment prior to that certification of receipt would be an impermissible payment under the plain language of the statute. 2024 Op. Ethics Comm'n No. 2024-04. Tangible personal property must be delivered in order to meet the "receipt" requirement for delivery of goods. — To the extent the tangible personal property is not subject to an exclusion from the prepayment prohibition, goods must be, as a general matter, delivered on site and received by the agency to constitute "receipt" for purposes of 13-1-158(A) NMSA 1978, and therefore the plain language of the statute would preclude a contract term allowing goods to be stored by the vendor. If the goods remained in the vendor's possession, it would be impractical for the agency to make the inspection required by 13-1-157 NMSA 1978. 2024 Op. Ethics Comm'n No. 2024-04. Multi-year contracts are permissible, but must otherwise meet the Procurement Code's specific conditions required for such agreements. — A procuring agency may prepay for web-based and electronic subscriptions so long as the purchase is under $10,000, and therefore prepayment of a multi-year contract for electronic subscriptions not exceeding ten thousand dollars does not violate 13-1-158(A) NMSA 1978, while multi-year contracts exceeding ten thousand dollars, although permissible, do not fall within the exemption specified in 13-1-98(J) NMSA 1978, and therefore a procuring agency may not pay for the services prior to the agency's certification that the services have been received and meet specifications. 2024 Op. Ethics Comm'n No. 2024-04. General rule against prepayment. — Where the purchase of items of tangible personal property is subject to the Procurement Code, there is a general rule against prepayment. 2023 Op. Ethics Comm'n No. 2023-04. Municipality prohibited from prepaying for the purchase of a firetruck. — The Procurement Code generally prohibits prepayment for the purchase of items of tangible personal property, an exception of which are those purchases that are excluded from the Procurement Code's scope, and therefore where a municipality is considering purchasing a firetruck, an item subject to the Procurement Code, under a statewide price agreement with the National Association of State Procurement Officials, the municipality may not prepay for the firetruck and may only pay for the truck after the municipality's central purchasing office certifies that the truck has been received and meets the specifications that the municipality bargained for. Moreover, the fact that the municipality could get a discount for prepayment and the fact that the vendor would provide the municipality with a performance bond following the receipt of any prepayment do not operate as exceptions to the Procurement Code's general rule against prepayment. 2023 Op. Ethics Comm'n No. 2023-04. Am. Jur. 2d, A.L.R. and C.J.S. references. — Application of 28 USCS § 2516(a) to government contractor's claim for interest expense or for loss of use of its capital caused by delay attributable to government, 59 A.L.R. Fed. 905.
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