The Department of Defense, NASA and the General Services Administration amended the Federal Acquisition Regulation to accelerate government agencies’ payment deadline to small business contractors to 15 days.
In a notice published Tuesday on Federal Register, DOD, NASA and GSA said they finalized the rule in order to improve small businesses’ cash flow and federal market opportunities.
The rule, which takes effect on March 16, was originally proposed in September 2021 as part of the National Defense Authorization Act for Fiscal Year 2020.
It requires agencies and prime contractors to pay primary and subcontracting small businesses within 15 days of receiving a proper invoice.
Under the new rule, prime contractors will not be allowed to renegotiate with subcontractors over the accelerated payments. The revision also excludes the conditional language “if a specific payment date is not established by contract.”
The amendment is applicable to government projects involving commercial services or commercially available off-the-shelf products.