32.009-2
Contract clause
All federal solicitations and contracts must include clause 52.232-40 to ensure small business subcontractors receive accelerated payments.
Overview
FAR 32.009-2 requires contracting officers to include clause 52.232-40, "Providing Accelerated Payments to Small Business Subcontractors," in all federal solicitations and contracts. This clause mandates that prime contractors provide accelerated payments to their small business subcontractors, aligning with government efforts to support small businesses by improving their cash flow and financial stability. The inclusion of this clause is mandatory, regardless of contract type or value, ensuring consistent application across federal procurement activities.
Key Rules
- Mandatory Clause Inclusion
- Contracting officers must insert clause 52.232-40 in every solicitation and contract issued by the federal government.
- Accelerated Payments Requirement
- The clause requires prime contractors to make accelerated payments to small business subcontractors, when the government provides accelerated payments to the prime contractor.
Responsibilities
- Contracting Officers: Must ensure clause 52.232-40 is included in all solicitations and contracts.
- Contractors: Must comply with the requirements of clause 52.232-40, providing accelerated payments to small business subcontractors when applicable.
- Agencies: Should monitor compliance and support timely payments to small businesses.
Practical Implications
- This section ensures small business subcontractors receive faster payments, improving their cash flow and ability to perform on government contracts.
- Failure to include the clause or comply with its requirements can result in noncompliance issues for both contracting officers and contractors.
- Contractors should review their payment processes to ensure they can meet accelerated payment obligations when triggered by the government.