55 Chapters
Medium 9781567262438

Chapter 2: The History of the Act

Arnold, William G. Berrett-Koehler Publishers ePub

The Prompt Payment Act, originally passed in 1982, was updated several times during its first years of existence. The Office of Management and Budget (OMB) published Circular A-125 to implement its requirements, supplanted by the Final Rule on Prompt Payment in 1999. This chapter documents the history of the Prompt Payment Act and its evolution.

1. Why did Congress pass the Prompt Payment Act?

Prior to enactment of the Prompt Payment Act, there was considerable dissatisfaction among government contractors about the timeliness of government payments. A 1978 report issued by the General Accounting Office (GAO; now called the Government Accountability Office) stated that 39 percent of all bills paid by the government were paid late.1 Con gress passed the Prompt Payment Act to force federal agencies to pay commercial vendors in accordance with contract provisions. Prior to the Prompt Payment Act, it was not unusual for agencies to routinely pay bills due in 30 days in 60, 90, or even 120 days instead.

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Medium 9781523096084

3 Performance Measures—The Keys to Success

Arnold, William G. Berrett-Koehler Publishers ePub

Most OMB requirements regarding performance budgets are administrative in nature and aren’t discussed in this book. Of the requirements worth noting, Chapter 2 presented the important framework requirements and this chapter discusses a set of interrelated requirements—setting performance goals and measuring your success in achieving them—that is of paramount importance.

Good performance measures are the key to successful performance budgeting. They serve two major purposes. First, they help sell your program to decision makers. Second, and more importantly, they help you achieve your desired results during execution of your program. Good performance measures don’t just give you feedback on how well you’ve done—they can be the cause of important improvements. Always remember this axiom of performance management: What gets measured, gets done!

Selecting a function for measurement, choosing consequences—either positive or negative—related to the results of that measurement, and communicating those consequences to the workforce will make things happen. It doesn’t particularly matter whether the motivation to change arises from possible rewards or sanctions, or just to give attention to a particular activity. What matters is that people will work toward meeting performance goals once they are announced.

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Medium 9781567262438

Chapter 9: Discounts and Rebates

Arnold, William G. Berrett-Koehler Publishers ePub

Vendors may offer discounts for early payment of invoices. Rather than borrowing money to finance operations, vendors are often willing to receive a smaller amount of money in exchange for being paid quickly. When vendors offer discounts, it is up to the government paying office to determine whether paying early is economically justified and whether the office can make the payment by the discount deadline.

109. What does the notation “.5/10 Net 30” mean?

This is how discounts are normally stated. In this example, it means, “If you pay this invoice within ten days, you may take a 0.5 percent discount. If you fail to pay within ten days, the entire (net) amount is due within 30 days.” The ten days is referred to as the “discount period,” and the 0.5 percent is called the “discount rate.”

110. If the contract terms state “Net 30,” and the invoice offers a discount (e.g., .5/10 Net 30), may I take the discount, or do the contract terms prevail?

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Medium 9781567262445

Appendix 1: GAO Database: Antideficiency Act Reports, Fiscal Years 2005-2008

Arnold, William G. Berrett-Koehler Publishers ePub
Medium 9781523096084

Epilogue The Future of Performance Budgeting

Arnold, William G. Berrett-Koehler Publishers ePub

I begin this book with a declaration that performance budgeting is an idea whose time has come—and I hope that, after reading this book, you’ll agree with me. Performance budgeting makes sense. It helps agencies manage their operations efficiently and effectively. It provides vital information to decision makers, and it helps government provide better value to taxpayers.

Unfortunately, there has been a mixed reaction to current efforts to implement performance budgeting in government. Executive branch agencies and Congressional authorization and appropriation committees have resisted changing the old ways of doing business.

For performance budgeting to succeed, the administration and Congress must cooperate. David M. Walker, former Comptroller General of the United States, in testimony before the House Budget Committee said it best:

In order for performance budgeting and program reviews to hold appeal beyond the executive branch, and to actually have an impact on legislation, garnering congressional buy-in on what to measure and how to present this information is critical. Without congressional involvement and buy-in, these efforts are unlikely to play a major role in the authorization, appropriations, and oversight processes. Although congressional support is critical to sustain any major management initiative, Congress’s constitutional role in setting national priorities and allocating the resources to achieve those priorities makes it especially important for performance budgeting and reexamination efforts. Lack of consensus by a community of interested parties on goals and measures and the way that they are presented can detract from the credibility of performance information and, subsequently, its use. Fifty years of past executive branch efforts to link resources with results have shown that any successful effort must involve Congress as a full partner. We have previously reported that past performance budgeting initiatives faltered in large part because they intentionally attempted to develop performance plans and measures in isolation from the congressional authorization, appropriations, and oversight processes. . . .

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