As an industry group pushes for the Defense Logistics Agency to reverse its policy on accelerated payments, the Pentagon says the adjustment would require a new appropriation.
In a new report on how small defense companies are weathering the coronavirus crisis, the National Defense Industrial Association said it is recommending DLA "reverse [its] policy position to no longer accelerate payments to small businesses."
"Accelerating these payments to 15 days or less would have a direct positive impact on the cash flow of small businesses," the association argued, noting that it has "received reports that DLA is moving forward with a policy to reinstate an accelerated payment schedule."
In an interview with Inside Defense, Corbin Evans of NDIA said DLA last year moved from a two-day payment schedule to a 30-day schedule.
"We're asking for a reinstatement of at least 15 days," he said, noting the association has heard from many small businesses that the change would be useful.
This policy "was one that was constantly cited" in the responses NDIA received from small businesses, Evans added.
He said NDIA views the change as consistent with the other policies the Pentagon has recently issued to help companies more rapidly receive payments.
Pentagon spokesman Lt. Col. Mike Andrews told Inside Defense the issue is being tracked closely by DOD's industrial policy, defense pricing and contracting and small business programs offices.
"DLA made that change prior to COVID-19, and any reversal will require an increase to their working capital fund via a new appropriation," Andrews added. "The department will continue to work this, but at this time we don't have anything to announce."