For small businesses operating in the industrial supply space, liquidity is king. The Defense Logistics Agency (DLA) offers a mechanism specifically designed to accelerate payments for small purchases: the Fast Payment Procedure, governed by FAR 52.213-1.
Fast Pay allows the government to pay a contractor based on their invoice and a certification that the supplies have been shipped. Unlike standard procedures where payment is triggered by the government's receipt and acceptance at the destination, Fast Pay moves the "acceptance" earlier in the process to the point of shipment.
Fast Pay is typically reserved for small purchases (under the Simplified Acquisition Threshold) and is specifically indicated in the solicitation. To utilize it effectively, contractors must:
Fast Pay is not a "no-strings-attached" payment. The contractor remains liable for ensuring the supplies strictly conform to contract requirements. If the items are found defective upon arrival, the government will seek a refund or replacement. Therefore, rigorous quality control at the point of origin is essential to maintain the privilege of using Fast Pay.
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