National Association of Government Contractors

Proposal to Expedite Small Business Payments

The complexity of federal procurements and advancing technology, often mean that small businesses often and the forefront of development with agile skill-sets are best positioned to handle some jobs.
However, small business is often unable to compete for contracts they might be best suited for--aside from daunting process--once a contract might be awarded, smaller firms do not have the resources of larger businesses to sustain operations while awaiting payment. 
In hopes of addressing this issue, House lawmakers are also throwing their support behind small business contractors with the Accelerated Payments for Small Businesses Act, H.R. 2322, which would ensure small businesses working as prime or subcontractors for the federal government are paid within 15 days, rather than the 30-day payment standard.
"The current 30-day timeline leaves small businesses without a vital source of income for a full month, severely disadvantaging them. By accelerating the payment to 15 days, small businesses can begin planning new contracts, hiring more people, and growing their companies," Congressman Troy Balderson (OH) one of the bill's sponsors has stated.
The move may give smaller businesses improved capabilities when bidding on contracts directly. Currently, partnering with another small business or larger contractor has always been an important tactic for small businesses, but it is becoming increasingly important, according to small business contracting experts.
"The government is spending more money, but we're seeing fewer numbers of contracts," said fellow panelist David Loines, director or the Small Business Administration's Office of Government Contracting's Area II Office, which oversees federal procurements in the Washington region.
Contracting with teams that include both small businesses and large contractors is becoming a primary avenue for federal agencies to meet their small business set-aside goals, he said.
The Accelerated Payments for Small Businesses Act could improve the ability of small business to compete for contracts, or sub-contract, by ensuring more efficient payment.

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