Effective July 11, 2013, the Office of Management and Budget (OMB) released a memo extending a policy to provide accelerated payment to Small Business Subcontractors.  This memo directs that agencies should, to the full extent permitted by law, temporarily accelerate payment to all prime contractors in order to allow them to provide prompt payment to small business subcontractors. This temporary policy is set to expire on July 11, 2014. The goal is to have all payments made within 15 days of receipt of proper invoices.

This initiative is part of the Administration’s ongoing commitment to supporting small business growth and prosperity, as an engine to drive economic activity and job creation throughout the country.

What you need to know

If you are a prime contractor with small business subcontractor and are in receipt of accelerated payments from the Government, you are required to make accelerated payments to your small business subcontractors to the maximum extent practicable.

If you’re a small business subcontractor you should know that you are entitled to expedient payments when the prime has benefited from them. Unfortunately, however, there is no mechanism to monitor when your prime contractor has received an accelerated payment. The government does not have a mechanism to enforce this on an individual basis.

Reference: FAR (Deviation) 52.232-99

Please feel free to contact Coley GCS for any questions you may have.