In July of 2012 the Office of Management and Budget (OMB) released a memo which included a temporary rule focused on accelerated payments to small business. The rule also allowed Federal agencies to accelerate payments to large prime contractors with small business subcontractors. The OMB took it one step further and made Federal agencies accountable for prime contractor payment disbursements to their small business subcontractors.

On February 25, 2013 it was announced that the Department of Defense has discontinued practice of this temporary rule. DoD still has a policy to assist small business prime contractors by paying them as soon as possible, however, they will no longer make accelerated payments to large prime contractors with small business subcontractors.

Federal agencies are generally required to make payments to their contractors within 30 days of receiving proper documentation. Agencies are typically required to prioritize payments to small business contractors, with the goal of paying these contractors within 15 days.

We will continue to monitor news that impacts our government contractors and keep our readers apprised of any updates.  Contact Coley GCS if you have any questions.