Subcontracting Payment Rules: Make the Payment or Incur the Penalty

The Payment of Subcontractors proposed rule, which appeared in the Federal Register in January 2016, is the latest in a series of efforts to hold the Prime accountable for timely payments to its Subs.

Those who follow these blogs know that ‘payment’ is a hot button topic for me whether it is payment to the Prime by the Government or payment to the Subcontractor by the Prime. We’ve previously highlighted the “Accelerating Payments to Small Businesses” rule whose aim is to enable small businesses subcontractors to receive payments within 15 days of receipt of a proper invoice. And not quite a year ago, I reviewed the finer points of the “Paid to Cost” rule, which requires payment to Subs thirty days after the Prime submits its invoice to the Government.

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