prompt payment | The Contracting Education Academy

August 21, 2020 By cs

DoD working on policy to pay back contractors faster for work stopped by COVID

The Defense Department has been slowly reimbursing companies for work that is unable to be completed because of the coronavirus.

However, Pentagon acquisition chief Ellen Lord said it may be coming faster in the near future.

Lord told members of the Professional Services Council that DoD sent a policy over to the Office of Management and Budget (OMB) that would push through claims for payments of $2 million or less.

“We have developed a streamlined path forward for low dollar value reimbursements under $2 million, and a path to settle globally at a company or division level that will eliminate the need to have proposals and negotiations on the contract-by-contract basis,” Lord said.

DoD is planning to use a tiered system that will look at claims depending on how large they are and impose varying levels of oversight over them.

Keep reading this article at: https://federalnewsnetwork.com/dod-reporters-notebook-jared-serbu/2020/08/defense-department-working-on-policy-to-pay-back-contractors-faster-for-work-stopped-by-covid/

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/

March 9, 2020 By cs

HHS’ shutdown of assisted acquisition services remains painful, wasteful

The Department of Health and Human Services is not just failing its agency and contractor customers but also, once again, demonstrating why “the government” gets maligned as wasteful, insular and uncaring.

With its decision to end its assisted acquisition services through its Program Support Center, HHS is putting more than $1 billion in contracts at risk. It’s hanging large and small agencies out to dry — ranging from the Defense Department to the Environmental Protection Agency to the Office of Special Counsel — by canceling contracts and giving them little time to prepare for the changes. And it is withholding payment to potentially hundreds of small and large contractors, putting some at risk of closing down or facing employee layoffs and additional contract costs.

At the same time, HHS is paying tens of thousands of dollars in prompt payment penalties to those same contractors for avoidable mistakes, inching ever closer to what experts would call waste and abuse.

“Since the beginning, HHS PSC was inflicting pain on themselves,” said Ron Robinson, a former program manager for Copper River Technologies, which provided contract support and financial analyst services until December when PSC ended its three-year contract two years early. “It is horrible the way HHS has handled this. They should be held accountable, and it doesn’t seem like anyone wants to. There wasn’t communication. There was a lack of transparency. You see that time and again with them suspending warrants and putting four people on administrative leave without telling them why.”

Keep reading this article at: https://federalnewsnetwork.com/reporters-notebook-jason-miller/2020/03/hhs-shutdown-of-assisted-acquisition-services-remains-painful-wasteful/

March 15, 2013 By AMK

DoD discontinues accelerated payments to prime contractors; small businesses exempt

The Department of Defense (DoD) has issued a notice that DoD has discontinued its temporary practice of providing accelerated payments to all contractors. This new rule is found at 78 FedReg 12745, issued on Feb. 25, 2013.

DoD originally provided notice in the Federal Register at 77 FedReg 63298, on October 16, 2012, that it had taken steps to accelerate payments to all DoD prime contractors, in order to implement the temporary policy established in OMB Memorandum M-12-16, Providing Prompt Payment to Small Business Subcontractors (July 11, 2012).

With the latest notice, DoD discontinues its temporary practice of accelerating payments to all prime contractors. This action does not affect DoD’s policy to assist small business prime contractors by paying them as quickly as possible after receipt of an invoice and all proper documentation, while also maintaining necessary DoD internal controls.

DoD plans to continue phased implementation of the policy at DFARS 232.903 and 232.906. This notice is effective February 25, 2013.

July 18, 2012 By AMK

Prompt payments may become contract selection factor

The Obama administration has directed agencies to make contract payments faster to all their prime contractors for the next year with the understanding that those companies will pass along those accelerated payments to their small-business subcontractors, officials said July 11.

The administration is aiming to get money into the hands of more small businesses, although it’s a short-term relief. Indeed, officials are setting clear expectations for prime contractors by making payment habits a future factor in the bid selection process.

Keep reading this article at: http://fcw.com/articles/2012/07/11/subcontractor-prompt-payment-omb.aspx.

The July 11, 2012 OMB policy directive can be found at: https://contractingacademywebpdf.s3.amazonaws.com/Providing-Prompt-Payment-to-Small-Business-Subcontractors-OMB-07.11.2012.pdf.

The Defense Department has been slowly reimbursing companies for work that is unable to be completed because of the coronavirus.

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.

The Department of Health and Human Services is not just failing its agency and contractor customers but also, once again, demonstrating why “the government” gets maligned as wasteful, insular and uncaring.

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