The Defense Department has decided that it will continue its policy of paying bills within five days of receiving an invoice, despite new Office of Management and Budget regulations saying that bills should be paid within 30 days, but as close to 30 days as possible. The OMB rules were intended to implement the new Prompt Payment Act while giving the government the maximum use of its money. Not surprisingly, OMB officials are unhappy that Pentagon officials are reaffirming their policy.
In an Oct. 7 memorandum, William A. Long, deputy undersecretary of defense for acquisition policy, told DOD procurement officials that "as a practical matter, paying offices have followed long established payment practices and generally have been disbursing within a few days after receipt of a proper invoice or progress payment request." For all contracts, except meats and perishable agricultural commodities, Long said DOD would try to pay "within five days, but not later than 30 days."
OMB spokesman Edwin L. Dale Jr. said, "We don't want them to be that timely. We're going to go over and sit down with them and go over that. We do not agree with their plan, but it is only an interpretive misunderstanding." DOD officials said their policy reflects the intent of the law and, in some cases, will maintain longtime payment practices.