Contracts To Be Handled Flexibly

The Government will handle non-works contract payment schedules as flexibly as possible to support businesses and ease the cash flow difficulties of government contractors during the pandemic period.

The Financial Services & the Treasury Bureau made the announcement today and explained that the Chief Executive unveiled a series of measures involving over $130 billion on April 8 to keep businesses going, maintain employment and relieve financial burdens of individuals and businesses amid the challenges of COVID-19.

The bureau noted that the Secretary for Financial Services & the Treasury has appealed to all procuring departments to do their best to handle payment schedules for their goods or service contracts flexibly as appropriate.

Specifically, in cases where contracts involve upfront or milestone payments, procuring departments are urged to provide larger sums for upfront payments to contractors and break up milestones in payment schedules into more deliverables.

Such action would enable more timely and frequent payments to help ease the cash flow difficulties of government contractors, the bureau said.

To further improve contractors’ liquidity, the financial services chief has advised procuring departments to settle payments to contractors expeditiously upon satisfactory completion of deliverables and receipt of proper invoices.

Bureaus and departments should also exercise maximum flexibility and do their best to compress the normal payment cycle from 30 days to two weeks, or where possible, one week, the bureau said.

This is on the condition that the operational needs of the procuring departments and reasonable protection of the Government's interests are not compromised, it added.