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FAR Class Deviation Accelerates Payments to Small Business Primes 

by | Apr 21, 2020 | Government Contracts

On March 30, 2020, the Civilian Agency Acquisition Council (CAAC), the civilian agency component of the FAR Council, expanded the availability of accelerated payments. It issued a FAR class deviation to add small business prime contractors to those entitled to accelerated payments. In doing so, the CAAC implemented a change made in the National Defense Authorization Act of 2020 that had not yet been implemented through the FAR notice and comment process. The class deviation allows an agency to immediately implement statutory changes without waiting for the changes to be formally made in FAR perhaps months down the road. 

In addition, the CAAC added some teeth to the existing FAR provision, FAR 32.009-1 allowing small business subcontractors to get accelerated payment from large primes. In addition to inserting a “goal” of small business subcontractor getting payment within 15 days, the CAAC prohibited a prime from exacting consideration from a small business subcontractor to implement the change.  

Finally, CAAC asked agencies to spread the word about the class deviation “to ensure full awareness of and compliance with” the new statute. 

To date, several agencies have implemented the CAAC class deviation: the Department of Health and Human Services, The Department of Homeland Security, and the General Services Administration.   

GSA’s class deviation, effective April 10, 2020, has an interesting wrinkle. The change applies to contracts and orders where GSA is the only agency making payment. This means, according to GSA, that the accelerated payment expansion “does not apply to Federal Supply Schedule Contracts or Multi-agency contracts.”   

Small businesses would want to consult www.acquisition.gov to learn if an agency it contracts with has already adopted the interim FAR language. 

Terrence O’Connor is a Partner and Director of Government Contracts at Berenzweig Leonard.