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Accelerated Payments Are Nice Mr. President, But...

Posted By Guy Timberlake, The American Small Business Coalition, LLC, Sunday, September 18, 2011
For once, I got the memo!

No, I'm not referring to the age old office chuckle of being dressed similarly to co-workers, I mean the actual memo (M-11-32) issued by the White House (OMB) on September 14th where the President tells agencies to speed up their activities under the Prompt Payment Act for the benefit of small businesses.

Let's see, if agencies were paying promptly, wouldn't that mean...umm, never mind.

Anyway, I think it's a good thought and a great gesture, but there are other more pressing issues  to be addressed that would in government contracting that would create a greater benefit for small businesses and the economy, at least that's my opinion.

For example, I would imagine there are far more small businesses and a more significant financial impact for small companies doing business as subcontractors. What if in addition to getting the agencies to pay quicker, prime contractors were told to do the same? The government is already getting involved in the labor activities of government contractors, why not expand to telling them how to manage their business relationships?

Okay, I didn't mean for my volume to be up for that last statement, I thought I was only thinking it.

Seriously though, what if expedited payments to prime contractors were tied directly to how they paid their small business subs?

Again, it's a great gesture, but the caveat is the "receipt of relevant documents, including a proper invoice for the amount due and confirmation that the goods and services have been received and accepted by the Federal Government." That's a mouthful, but what it means is if you are not submitting a compliant invoice package, payment can be delayed. Part of that paperwork includes the inspection and acceptance information from the end-users which is a cinch pin for getting payments processed.

Then there is the issue of small companies having business for which to submit invoices in the first place. You can only be paid quicker for something you were awarded or had a chance to compete for. See, there it goes again, I thought that one was just a "think" too.

Accelerated payments are nice Mr. President, but... 


The Chief Visionary

"The person who says it cannot be done should not interrupt the person doing it."

Tags:  payment  set-aside  small business  subcontracting 

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