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Federal Contracting
Prompt Payment – Small BusinessClass Deviation
February 14, 2013Midwest SBLO Meeting
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Introduction
Presented by
Ray Suennen
Governmental Contracts
Compliance Coordinator
Integrys Energy Services, Inc
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FAR 52.232-99
New FAR Clauses: 52.232-99
Providing Accelerated Payments to Small Business Subcontractors
Implements the temporary policy provided by Office of Management and Budget (OMB) Policy Memorandum M-12-16, Providing Prompt Payment to Small Business Subcontractors, dated July 11, 2012
Applies to goods and services3
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FAR 52.232-99
Providing Accelerated Payments to Small Business Subcontractors – the Order
“The Executive Branch policy that, to the full extent permitted by law, agencies shall make their payments to small business contractors as soon as practicable, with the goal of making payments within 15 days” of receipt of relevant documents.
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FAR 52.232-99
Providing Accelerated Payments to Small Business Subcontractors (Jul 2012) (Deviation)
The FAR 52.232-99 Clause
(a) Upon receipt of accelerated payments from the Government, the contractor is
required to make accelerated payments to small business subcontractors to the maximum extent practicable after receipt of a proper invoice and all proper documentation from the small business subcontractor.
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FAR 52.232-99
Accelerated Payments to Small Business Subcontractors (Jul 2012) (Deviation)
The FAR 52.232-99 Clause
(b) Include the substance of this clause, including this paragraph (b), in all subcontracts with small business concerns.
This is a flow down clause
including to small businesses.6
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
Goal of accelerated payments;
- improves the cash flow for small businesses
- increases liquidity
- unlocks capital for the purposes of investment and growth
- increases Small Business participation in Federal contracting
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
Effective date; July 11, 2012
Expiration date: July 10, 2013
The FAR Council is undertaking rulemaking and public comments to further implement OMB’s policy
Does this mean it is likely to be permanent?
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
As of February 11, 2013, FAR 52.232-99 is not posted on the Government’s FAR
website
As of the January 1, 2013 CCH FAR publication, it is not included
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
FAR 1.404, Class Deviations
Allows for immediate implementation for a broad class of contracts
FAR 1.108(d)(3)
Application of FAR changes to solicitations and contracts - Contracting Officer may, at their discretion, include the changes in any existing contract with appropriate consideration
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
Appropriate consideration does not have to be bilateral agreed to
Agencies should, to the full extent permitted by law, temporarily accelerate payments to all prime contractors, in order to allow them to provide prompt payments to small business subcontractors
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
Is this a first step by the Government to redefine the “Prompt Payment Act” on a permanent basis, by creating a new and separate category for small businesses?
prompt payments to small business subcontractors – 15 days ???
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FAR 52.232-99
Providing Accelerated Payment to Small Business Subcontractors
1) How will the appropriate persons in your company know if your company is receiving accelerated payments?
If your company does receive accelerated payments,
1) how will your company monitor which small business subcontractors should receive accelerated payments?
2) Are the Small Business Subcontractors actually receiving accelerated payments?
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What are your
questions
and
comments?
Summary
