With the approval of the National Defense Authorization Act on May 24, the House of Representatives also passed into law legislation for small businesses to receive payments on time.
Congressman Steve Knight, R-Palmdale, authored legislation in March for the Department of Defense to establish a goal of paying all small business contractors within 15 days of receiving a proper invoice.
“Small business operate on razor-thin margins and are dependent on a consistent cash flow in order to maintain their operations,” Knight said. “When the government is late in their payments, these businesses often are forced to furlough employees and scale down activity. This ultimately hurts their long-term viability and put them at risk of closure.”
The Accelerated Payments for Small Businesses Act also establishes a similar goal for government contractors that have small business sub-contractors.
The NDAA sets federal defense and national security policies of the United States for each fiscal year.Knight is a member of the House Small Business Committee and serves as chairman of the Subcommittee on Contracting & the Workforce. The Accelerated Payments for Small Businesses Act is endorsed by the National Defense Industrial Association and the Professional Services Council.