Small Business Subcontractors: Accelerated Payments

The Office of Management and Budget has told federal agencies that they should accelerate their payments to prime contractors in order for the primes to pay their subcontractors sooner.  Instead of paying primes 23-30 days after they submit an invoice as is typical, agencies should now pay the prime’s invoices 15 days after submission and the primes are “required …to the maximum extent practicable” to make accelerated payments to their subcontractors.

The new policy is being carried out by a new clause in the Federal Acquisition Regulation (FAR), FAR Sec. 52.232-99, Providing Accelerated Payment to Small Business Subcontractors (DEVIATION).

Although technically this new policy can apply only to government solicitations issued on or after August 16, 2012, agencies can insert this new clause into existing contracts “with appropriate consideration.”
Berenzweig Leonard’s government contract experience is something prime contractors as well as small business subcontractors can count on to help them take advantage of this new accelerated payment policy.

Terrence M. O’Connor is the Director of Government Contracts at Berenzweig Leonard, LLP, a business law firm in the Washington, DC area. He can be reached at TOConnor@BerenzweigLaw.com.