Senators on Capitol Hill in the United States have debuted a bill that seeks to hasten payments to smaller vendors from the Department of Defense (DoD).
Under the terms of legislation put forth by Senators Ben Cardin of Maryland and Mike Enzi of Wyoming, the DoD would be required to pay smaller contractors, as well as larger firms that deploy small contractors, within 15 days. The bill is being introduced as an amendment to the National Defense Authorization Act, and also takes some cues from the Accelerated Payments for Small Business Act of 2018, which requires all government entities to pay small suppliers within 15 days of receiving invoices.
That’s a marked change from the 30-day terms currently in place. Enzi has noted that payments made with speed are a necessary component of managing cash flow.
Recent headlines beyond The Hill have been covering the struggles of smaller vendors, focusing on the woes washing over U.K. companies amid the very public collapse of Carillion, the construction outsourcing firm.
In that vein, constructionnews.co.uk noted this week that papers focused on the collapse of construction firm Carillion show that the U.K.’s Cabinet Office did not raise red flags about the firm until late 2017, three months after a July writedown of as much as 845 million pounds. According to risk monitoring protocols, alerts would have been raised under the Cabinet Office’s “red amber green” system. The “red” rating comes before identifying a firm as high risk. The foundering firm – which has had a ripple effect on smaller firms in the industry roiled by late payments – was not classified as high risk until almost the end of the year.
The Guardian reported that the committee has also found that public works contacts are too keenly concentrated in the hands of a few firms. Meg Hillier, a Committee chair and Labour MP, said the papers show “clear and compelling problems with the business in the months leading to its collapse. Government had the opportunity to deal with them. Taxpayers, service users and people and businesses plunged into financial difficulty by Carillion’s demise deserve to know what happened.”
In individual company news, Tradeshift, the supply chain management company, is boosting B2B efforts through Tradeshift Pay. The company has introduced an early payments service tied to blockchain. In a press release, the company said that it is rolling supply chain finance, supply chain payments and early payments options into an integrated offering. Tradeshift has said that a goal is to free up working capital while also providing payment options, as buyers can make payments across rails that include virtual cards. The blockchain helps to allow access to early payment discounts, in turn enabling suppliers to be paid more quickly.