GSA Prompt Payment Discount Terms
For GSA contractors who offer or are considering to offer prompt payment discounts, there are a few important details to keep in mind. GSA contractors can check to see if any prompt payment terms were agreed upon on their Standard Form 1449 or Final Proposal Revision.
Contractors are required in accordance with Clause I-FSS-600, Contract Price list (JUL 2004), to reflect their prompt payment discounts on their awarded pricelist – especially on the copy posted on GSA Advantage. Contractors are also required to list any offered terms on invoices.
Contractors who offer standard Net 30 payment terms have not agreed to any prompt payment discounts. However, they can provide them to individual orders and invoices. The good news is that GSA contractors that have agreed on prompt payment discounts may also offer additional discounts. Furthermore, contractors should be aware that if orders are paid by government purchase cards, the buyer should not receive any offered prompt payment discounts.
Some contractors may question whether prompt payment discounts are negotiable. The answer is, mostly no. Government customers are typically not permitted to negotiate any form of prompt payment discounts due to contractual agreements. However, the negotiation aspect does possess a loophole in the sense that agencies can waive prompt payment discounts in exchange for other price discounts. Therefore, contractors can still receive a “price discount” as long other appropriate considerations are reviewed and evaluated legal and possible. In order for the prompt payment discount to be waived, the pricelist cannot mention or state any desire for a prompt payment discount.
Another consideration for the prompt payment terms is the 1% 10 Days, Net 30 clause under the GSA Schedule Contract. GSA Schedule buyers can benefit from this discount by receiving a 1% discount on the invoice by paying within the first 10 days. Contractors should keep in mind, the term “10 Days, Net 30” must be displayed on all invoices for this discount to be acknowledged and given from the agency.
The prompt payment discount allows for a cost effective way for GSA contractors to work with their government customers. The benefits may not seem that lucrative, but when working with agencies that conduct million dollar deals, the perk for this discount become very enticing to buyers and contractors alike.