Procurement

OMB extends rules requiring quick contractor payments

transferring funds

A measure to expedite payment from the federal government to subcontractors was set to expire on July 11, but the Office of Management and Budget has extended it to July 2014.

Memorandum M-12-16, issued in July 2012 by then-acting OMB Director Jeffrey Zients, directs agencies to have a goal of paying their prime contractors within 15 days of invoice receipt, so that subcontractors receive payment more quickly.

Agencies have accelerated their payments and included clauses with prime contractors addressing the timeliness of their payments to subcontractors, according to OMB.

"This extension will allow OMB and agencies to continue to evaluate the impact of accelerated payment on small business subcontractors," the new OMB memo, signed by federal CIO and acting Deputy Director of Management Steven VanRoekel, states. "It will also allow the Federal Acquisition Regulatory Council to solicit public input on strategies that might be used over the longer term to help maintain effective cash flow and prompt payment to small business subcontractors."

The original memo directed agencies to encourage prime contractors to:

• Accelerate payments to their small business subcontractors;

• Consider modifying their existing contracts with small business subcontractors without consideration or fees to include a clause providing that the prime contractor will pay the small business subcontractor along an accelerated timetable to the maximum extent practicable; and

• Insert a similar clause in their future contracts with small businesses subcontractors.

It also mandated reports on the speed of payment to subcontractors. The overall memo was an expansion of the administration's Quick Pay plan, an initiative introduced in September 2011 to speed up payments to small prime contractors.

About the Author

Reid Davenport is an FCW editorial fellow. Connect with him on Twitter: @ReidDavenport.

The Fed 100

Save the date for 28th annual Federal 100 Awards Gala.

Featured

  • computer network

    How Einstein changes the way government does business

    The Department of Commerce is revising its confidentiality agreement for statistical data survey respondents to reflect the fact that the Department of Homeland Security could see some of that data if it is captured by the Einstein system.

  • Defense Secretary Jim Mattis. Army photo by Monica King. Jan. 26, 2017.

    Mattis mulls consolidation in IT, cyber

    In a Feb. 17 memo, Defense Secretary Jim Mattis told senior leadership to establish teams to look for duplication across the armed services in business operations, including in IT and cybersecurity.

  • Image from Shutterstock.com

    DHS vague on rules for election aid, say states

    State election officials had more questions than answers after a Department of Homeland Security presentation on the designation of election systems as critical U.S. infrastructure.

  • Org Chart Stock Art - Shutterstock

    How the hiring freeze targets millennials

    The government desperately needs younger talent to replace an aging workforce, and experts say that a freeze on hiring doesn't help.

  • Shutterstock image: healthcare digital interface.

    VA moves ahead with homegrown scheduling IT

    The Department of Veterans Affairs will test an internally developed scheduling module at primary care sites nationwide to see if it's ready to service the entire agency.

  • Shutterstock images (honglouwawa & 0beron): Bitcoin image overlay replaced with a dollar sign on a hardware circuit.

    MGT Act poised for a comeback

    After missing in the last Congress, drafters of a bill to encourage cloud adoption are looking for a new plan.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group