Pennsylvania Consolidated Statutes

62 Pa. Cons. Stat. § 3935 (2026)

 Penalty and attorney fees.

✓ current as of May 2026
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§ 3935.  Penalty and attorney fees.

(a)  Penalty.--If arbitration or a claim with the Board of Claims or a court of competent jurisdiction is commenced to recover payment due under this subchapter and it is determined that the government agency, contractor or subcontractor has failed to comply with the payment terms of this subchapter, the arbitrator, the Board of Claims or the court may award, in addition to all other damages due, a penalty equal to 1% per month of the amount that was withheld in bad faith. An amount shall be deemed to have been withheld in bad faith to the extent that the withholding was arbitrary or vexatious. An amount shall not be deemed to have been withheld in bad faith to the extent it was withheld pursuant to section 3934 (relating to withholding of payment for good faith claims).

(b)  Attorney fees.--Notwithstanding any agreement to the contrary, the prevailing party in any proceeding to recover any payment under this subchapter may be awarded a reasonable attorney fee in an amount to be determined by the Board of Claims, court or arbitrator, together with expenses, if it is determined that the government agency, contractor or subcontractor acted in bad faith. An amount shall be deemed to have been withheld in bad faith to the extent that the withholding was arbitrary or vexatious.

Notes of Decisions
Cited in 24 cases (3 in the last 5 years), 2006–2025 · leading case: A. Scott Enter. v. City of Allentown, Aplt., 142 A.3d 779 (Pa. 2016).
A. Scott Enter. v. City of Allentown, Aplt., 142 A.3d 779 (Pa. 2016). · cites it 9× “We hold such an award is not mandatory, and therefore reverse the order of the Commonwealth Court and remand the case to the trial court for proceedings consistent with this Opinion.”
James Corp. v. North Allegheny Sch. Dist., 938 A.2d 474 (Pa. Commw. Ct. 2007). · cites it 7× “The third section, 62 Pa.C.S. § 3935, 15 authorizes the award of penalties and attorney’s fees against the government agency where it withheld payments due under the contract in bad faith.”
Dep't of Gen. Servs. v. Pittsburgh Bldg. Co., 920 A.2d 973 (Pa. Commw. Ct. 2007). · cites it 8× “As the designated petitioner before this Court, PBC argues, in its cross-petition for review, that the Board abused its discretion in denying PBC attorney fees and penalty interest since Section 3935 of the Commonwealth Procurement Code (Procurement Code), 62 Pa.C.S. § 3935,…”
A. G. Cullen Constr., Inc. v. State Sys. of Higher Educ., 898 A.2d 1145 (Pa. Commw. Ct. 2006). · cites it 2× “62 Pa.C.S. § 3935(b) (emphasis added). Recognizing the terms "arbitrary" and "vexatious" are not defined by the Procurement Code, our Superior Court explained: [A]bsent a definition in a statute, statutes are presumed to employ words in their popular and plain everyday sense,…”
Merscorp, Inc. v. Del. Cnty., 207 A.3d 855 (Pa. 2019). “Scott Enterprises , section 3935 of the Procurement Code, is a prompt payment statute for government projects and provides that a court " may award" certain amounts in addition to damages.”
Cecil Twp. Mun. Auth. v. North Am. Specialty Sur. Co., 836 F. Supp. 2d 367 (W.D. Pa. 2011). · cites it 4× “”) As a result of that violation, North American is entitled to interest on the unpaid contract balances and/or retainage as well as penalties, attorneys’ fees, and costs as provided for in 62 Pa.C.S. § 3935. (Doc. No. 4, Counterclaims, ¶¶ 10-16.”
East Coast Paving & Sealcoating, Inc. v. North Allegheny Sch. Dist., 111 A.3d 220 (Pa. Commw. Ct. 2015). · cites it 2× “62 Pa.C.S. § 3935 (emphasis added). In summary, each statute provides for penalty and attorney fees but the trigger under each statute differs.”
A. Scott Enter., Inc. v. City of Allentown, 102 A.3d 1060 (Pa. Commw. Ct. 2014). · cites it 2× “62 Pa.C.S. § 3935. The contract provided for the City to pay Contractor for costs should the project be suspended.”
Meyer v. Cmty. Coll. of Beaver Cnty., 2 A.3d 499 (Pa. 2010). “, 62 Pa.C.S. § 3935 (providing for damages, penalties and attorney’s fees in connection with the implementation of the Government Procurement Code).”
F. Zacherl, Inc. v. Flaherty Mech. Contractors, LLC, 131 A.3d 1030 (Pa. Commw. Ct. 2016). · cites it 2× “62 Pa. C.S. §3935 (emphasis added). The Prompt Pay Act “level[s] the playing field” between a government agency, which can use its taxing power to fund litigation, and a private contractor, which lacks this resource.”
Clairton Slag, Inc. v. Dep't of Gen. Servs., 2 A.3d 765 (Pa. Commw. Ct. 2010). “62 Pa.C.S. § 3935. This provision, however, is only applicable to contracts for “construction.”
Clipper Pipe & Serv., Inc. v. Ohio Cas. Ins., 115 A.3d 1278 (Pa. 2015). “§ 512, with 62 Pa.C.S. § 3935. Accord, e.g., E. Coast Paving & Sealcoating, Inc.”
— 62 Pa. Cons. Stat. § 3935(a) — 3 cases
A. Scott Enter. v. City of Allentown, Aplt., 142 A.3d 779 (Pa. 2016). “We hold such an award is not mandatory, and therefore reverse the order of the Commonwealth Court and remand the case to the trial court for proceedings consistent with this Opinion.”
Dep't of Gen. Servs. v. Pittsburgh Bldg. Co., 920 A.2d 973 (Pa. Commw. Ct. 2007). “As the designated petitioner before this Court, PBC argues, in its cross-petition for review, that the Board abused its discretion in denying PBC attorney fees and penalty interest since Section 3935 of the Commonwealth Procurement Code (Procurement Code), 62 Pa.C.S. § 3935,…”
— 62 Pa. Cons. Stat. § 3935(b) — 6 cases
James Corp. v. North Allegheny Sch. Dist., 938 A.2d 474 (Pa. Commw. Ct. 2007). “The third section, 62 Pa.C.S. § 3935, 15 authorizes the award of penalties and attorney’s fees against the government agency where it withheld payments due under the contract in bad faith.”
A. G. Cullen Constr., Inc. v. State Sys. of Higher Educ., 898 A.2d 1145 (Pa. Commw. Ct. 2006). “62 Pa.C.S. § 3935(b) (emphasis added). Recognizing the terms "arbitrary" and "vexatious" are not defined by the Procurement Code, our Superior Court explained: [A]bsent a definition in a statute, statutes are presumed to employ words in their popular and plain everyday sense,…”
Dep't of Gen. Servs. v. Pittsburgh Bldg. Co., 920 A.2d 973 (Pa. Commw. Ct. 2007). “As the designated petitioner before this Court, PBC argues, in its cross-petition for review, that the Board abused its discretion in denying PBC attorney fees and penalty interest since Section 3935 of the Commonwealth Procurement Code (Procurement Code), 62 Pa.C.S. § 3935,…”
Zavala, Inc. v. Five-R-Excavating, Inc., 973 A.2d 427 (Pa. 2009).
Zavala, Inc. v. Five-R Excavating, Inc., 973 A.2d 427 (Pa. 2009).
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