Is Uncle Sam a Deadbeat?

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Is Uncle Sam a Deadbeat?

By Keith Girard
AllBusiness.com
July 24, 2006

In a new report, the government's administrative watchdog says that small businesses are uniformly the last to get paid when they do work for the Defense Department.

In many cases, this causes a financial hardship for small contractors, interrupting their day-to-day operations and often forcing them to seek credit to cover their costs while awaiting payment, according to the Government Accountability Office (GAO).

A federal law requires government agencies to pay interest on late invoices, but of the 17 small contractors interviewed by the GAO, 10 said they rarely were paid interest on late payments. The Defense Department acknowledged that it gives large contractors priority, but also said its payment system was outdated.




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