DoD Contracting: Techniques to Ensure Timely Payments to Subcontractors
GENERAL ACCOUNTING OFFICE WASHINGTON DC NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIV
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Subcontractors depend on cash flow generated by progress or other periodic payments from prime contractors to meet payrolls and pay other bills. A long-standing congressional concern is whether federal prime contractors are paying subcontractors in a timely manner. Payments to subcontractors sometimes constitutes well over 50 percent of the prime contract costs. This report responds to section 806 of the National Defense Authorization Act for Fiscal Years 1992 and 1993, which requires GAO to 1 identify existing statuatory and regulatory provisions that help provide timely payments to subcontractors working on federal contracts and 2 evaluate the feasibility and desirability of additional proposed payment protections for subcontractors that are enumerated in the legislation.
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