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Acquisition Policy Flash! 13-21

What's Changed?

Extension of Prompt Payments to Small Business Subcontractors

Purpose:  The purpose of this Acquisition Flash is to inform the VA Acquisition Workforce of the extension of Office of Management and Budget (OMB) Memorandum M-12-16, “Providing Prompt Payment to Small Business Subcontractors”, dated July 11, 2012.

Dated:  July 17, 2013

Background:  OMB Memorandum M-12-16, issued July 11, 2012, established the Executive Branch policy that, to the full extent permitted by law, agencies shall take the steps outlined within the memorandum to ensure that prime contractors are able to pay their small business subcontractors in a prompt fashion.  In particular, agencies were asked, to the full extent permitted by the law, temporarily accelerate payments to all prime contractors, to allow them to provide prompt payments to their small business subcontractors.  Agencies were encouraged to make payments to all prime contractors as soon as practicable, with a goal of paying all prime contractors within 15 days of receiving proper documentation.  The policy of automatically accelerating all payments to prime contractors terminated on 13 July 2013, one year from the date of OMB Memorandum M-12-16.

Update:  This Acquisition Flash is to advise you that on July 11, 2013, OMB Memorandum M-13-15 extends the temporary policy to July 11, 2014.

Action:  Effective immediately, contracting officers shall continue to insert the attached clause in all new solicitations and resultant contracts and, to the extent feasible, modify existing solicitations to insert the attached clause.  Contracting officers may amend existing contracts to insert this clause in accordance with FAR 1.108(d).

Applicability:  This policy applies to all new solicitations and resultant contracts.  Additionally, this policy also applies to existing solicitation and existing contracts where modification or amendment is feasible.

Additional Information:  As always, we welcome your questions and comments, which can be submitted to our procurement policy mailbox at  We look forward to getting your emails with questions and comments and will respond to your inquiries within 48 hours.