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May 13, 2020 By cs

DoD to deliver $3 billion in accelerated contractor payments over coming weeks

Just over a month ago, the Pentagon told its contracting officers and contract administrators to boost the amount of money it pays vendors in the form of progress payments as one way to increase their cash flow amidst a sagging economy.  And the dollars have indeed started flowing.

As of last week, DoD had made $1.2 billion in additional progress payments because of the higher rates — which rose from 80% to 90% of the total contract value for large companies, and from 90% to 95% in the case of small firms. Ellen Lord, the undersecretary of Defense for acquisition and sustainment told reporters she expected the figure to rise to $3 billion in “the next week or two.”

For context, the department’s outlays for contracts are about $25 billion in total during an average month, making the $3 billion in accelerated payments a not-insubstantial sum. Lord said the added progress payments happened across 1,400 separate contracts, mostly because of a mass-modification the Defense Contract Management Agency processed to boost payment rates.

However, one open question — in the case of large contracts — is how quickly bigger firms are passing the advance payments down through their supply chains. Those figures, Lord said, are more difficult to track.

Keep reading this article at: https://federalnewsnetwork.com/dod-reporters-notebook-jared-serbu/2020/05/dod-to-deliver-3b-in-accelerated-contractor-payments-over-coming-weeks/

The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized.  Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/

Filed Under: Government Contracting News Tagged With: Accelerate, acquisition workforce, advance payment, coronavirus, COVID-19, DCMA, DoD, modification, pandemic, payments, progress payments, prompt payment, readiness, small business

February 7, 2019 By AMK

DoD procurement overhaul report recommendations draw both praise, critique from industry groups

The most important recommendation to come out of the third Section 809 Panel report on defense procurement reform is one that doesn’t directly relate to procurement, according to a leading industry group.

Corbin Evans, director of regulatory policy for the National Defense Industrial Association, told WashingtonExec the most crucial recommendation is for Congress to enact timely regular appropriations bills instead of continuing resolutions. Otherwise, defense acquisition will continue to suffer, regardless of what other reforms are made.

“This has been an NDIA priority for years,” he said. “It’s important to ensure that these bills are done on time and that money can be distributed in a predictable manner.”

Evans also singled out the panel’s recommendation to enable enhanced use of advanced payments at the time of contract awards to small businesses, which comprise about 75 percent of NDIA’s 1,700 members.

Keep reading this article at: https://washingtonexec.com/2019/01/section-809-report-dod-acquisition-reform/

Filed Under: Government Contracting News Tagged With: acquisition reform, advance payment, appropriations, continuing resolution, DoD, industry feedback, NDIA, procurement reform, Section 809 Panel, small business

October 8, 2018 By AMK

Facing industry pressure, Pentagon backs off contract payment changes

Following a wave of criticism from the defense industry and members of Congress, the Pentagon on Monday backed off proposed changes to how companies receive cash flow on their contracts.

In a statement released at the unusual time of 7:19 PM, Deputy Secretary of Defense Patrick Shanahan said the decision to withdraw the proposed acquisition changes stemmed from a lack of “coordination” inside the department.

“Recently, proposed amendments to the Defense Federal Acquisition Regulation Supplement (DFARS) were prematurely released, absent full coordination,” Shanahan’s statement read. “As a result, the Department will rescind the proposed amendments. In coordination with industry, the Department will create a revised rule to implement section 831 of the FY2017 NDAA.”

“The department will continue to partner closely with Congress and industry to examine all reform opportunities, ensuring we provide the best value to taxpayers and critical capabilities to military personnel who defend this great Nation,” Shanahan said.

Keep reading this article at: https://www.defensenews.com/pentagon/2018/10/02/facing-industry-pressure-pentagon-backs-off-contract-payment-changes/

Filed Under: Government Contracting News Tagged With: advance payment, contract payments, DFARS, DoD, industrial base, industry, mobilization, NDAA, payment, payments, Pentagon, performance-based payment

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