FAR Amendments Designed to Speed Up Payment to Subcontractors

On November 25, 2013,  the DOD, GSA, and NASA issued a final rule amending the Federal Acquisition Regulations (FAR) to incorporate a new clause to provide accelerated payments to small business subcontractors.

The new clause [FAR 52.232-40] requires prime contractors, upon receipt of accelerated payment from the Government, to make accelerated payment to small business subcontractors, to the maximum extent practicable, after receipt of a proper invoice and all proper documentation from small business subcontractors. [ Note: If the Government does not accelerate payment to a prime contractor, that prime contractor is under no obligation to accelerate payments to its small business subcontractors.  78 FR 70478 ]

This clause will be inserted into all new solicitations issued after the effective date of this rule [December 26, 2013] and resultant contracts, including solicitations and contracts for the acquisition of commercial items. 

This rule does not provide any new rights under the Prompt Payment Act and does not affect the application of the Prompt Payment Act late payment interest provisions.

52.232-40  Providing Accelerated Payments to Small Business Subcontractors (Dec 2013)

(a) Upon receipt of accelerated payments from the Government, the Contractor shall make accelerated payments to its small business subcontractors under this contract, to the maximum extent practicable and prior to when such payment is otherwise required under the applicable contract or subcontract, after receipt of a proper invoice and all other required documentation from the small business subcontractor.

(b) The acceleration of payments under this clause does not provide any new rights under the Prompt Payment Act.

(c) Include the substance of this clause, including this paragraph (c), in all subcontracts with small business concerns, including subcontracts with small business concerns for the acquisition of commercial items.  78 FR 70479

For more about the Federal Acquisition Regulations (FAR), click here. For a complete copy of all the FAR regulations, or to download a complete set, click here. 

For more about Michigan Construction Law Update, click here.

OMB Publishes Updated Guidance for Implementing ARRA

On April 3, 2009, the Office of Management and Budget (OMB) published (here) Implementing Guidance for the American Recovery and Reinvestment Act of 2009 ("Recovery Act").

This is the second installment of detailed government-wide guidance for carrying out programs and activities enacted in the Recovery Act. This updated guidance supplements, amends and clarifies the initial guidance issued by OMB on February 18, 2009 (Initial Implementing Guidance for the American Recovery and Reinvestment Act of 2009, M-09-10). Updates to the guidance are based on ongoing input received from the public, Congress, state and local government officials, grant and contract recipients and federal personnel.

New Ethics, Disclosure Rules for Federal Contractors

On December 12, 2008, new federal rules on mandatory disclosure and ethics and compliance went into effect. Among other things, the rule requires government contractors to disclose evidence of violations of certain criminal laws by their employees or subcontractors and to implement certain internal controls within their companies.

The new rule requires, for contracts and solicitations after the December 12, 2008 effective date, the insertion of the clause at FAR 52.203-13, Contractor Code of Business Ethics and Conduct, in all contracts in which the value of the contract is expected to exceed $5 million and the performance period is 120 days or more (a "covered contract").

For more information, click here.

The Federal Construction Contracting Blog has a number of posts here on these new regulations, tracking back to when they were first proposed.