[Comments on Proposed Amendments to OMB Circular A-125]

GAO was requested to comment on proposed amendments to OMB Circular A-125. These amendments are designed to provide additional guidance to federal agencies on the proper timing of payments made to contractors, particularly where progress payments or advance financing are provided by the government. GAO expressed concern that: (1) the amendments favored small businesses; (2) the tenfold increase in the threshold level was too high; and (3) the paragraph concerning payment date included all forms of contract financing. GAO suggested that: (1) small businesses not be favored; (2) a tenfold increase in threshold levels was not necessary and savings may be more than offset by higher prices for procurements under the threshold; and (3) the paragraph dealing with payment date should not apply to progress payments.