OMB has issued a memo, M-14-10, extending a policy of providing expedited payments to prime contractors in order to ensure small business subcontractors are paid more promptly. The policy has been extended through 2016.
The policy establishes a goal of paying prime contractors within 15 days of receiving a proper invoice.
According to the memo, the Federal Acquisition Regulatory Council also created a new clause for agencies to incorporate into their contracts requiring prime contractors to accelerate payments to their small business subcontractors when they receive accelerated payments from the government. The memo said the FAR Council is also considering strategies that might be used over the longer term to help maintain effective cash flow and prompt payment to small business subcontractors.
