Rule on Accelerated Payments To Subcontractors Finalized

Beginning December 26 there will be a new clause added to contracts requiring prime contractors that receive accelerated payments from the government to make similar payments to their small business subcontractors. Amy L. O'Sullivan, a partner in the firm's Washington, D.C. office and Government Contracts Group, tells BNA why she believes the new rule is too vague, "Although well intended as part of overall efforts to accelerate payments to small businesses, because the rule lacks specifics (including defining 'accelerated' payments) and enforcement mechanisms, I doubt that it will have much impact." According to BNA, The clause, contained in a final rule published in the Nov. 25 Federal Register, will require accelerated payments to small business subcontractors, to the maximum extent practicable, after receipt of proper invoices and documentation.