In a completely unexpected set of developments, President Obama and key Congressional Republican and Democratic lawmakers have agreed overnight on a tentative agreement regarding the federal budget. The agreement lowers changes of a government shut down and extends U.S. borrowing authority until early 2017.
At its present form, the tentative agreement will keep the Federal Government financed until September 2017. The tentative agreement, which still has to be approved by Congress, also raises the debt limit, which will allow the U.S. Department of the Treasury to borrow whatever it needs until March 2017.
What does this mean for Federal Contractors? The message is clear: keep working and continue to timely invoice the Federal Government for the work performed under your contract. While March 2017 may seem a long way off, for some it is just around the corner.
Generally, the Federal Government pays its bills in the order it received them, unless there is a government shut down, or otherwise prohibited by law. In order to ensure timely payments, make sure that you provide accurate and detailed invoices. Also check whether your contract contains any advance payment or accelerated payment clauses, and under what circumstances they apply. Missing several rounds of payments owed could have serious financial consequences for any business.
Under the Prompt Payment Act, 31 U.S.C. 39, federal agencies are required to make timely payments. This law also requires federal agencies to pay an interest penalty automatically, without any specific request from the contractor. See generally FAR Part 32.9 Prompt Payment. If you have any questions regarding specific payment disputes, late payments, claims, or requests for equitable adjustments, seek legal advice from Government contract attorneys.