ppdis.doc

COMMONWEALTH OF MASSACHUSETTS

Prompt Payment Discount Form

Prompt Payment Discounts (PPD). All contractors entering into business with the Commonwealth must agree to provide a Prompt Payment Discount (PPD) for receiving early and/or on-time payments unless the bidder can provide compelling proof that it would be unduly burdensome. Contractors benefit from PPD by increased, usable cash flow as a result of fast and efficient payments for commodities or services rendered. Contractors who also participate in the Electronic Funds Transfer initiative will maximize their benefit by ensuring that funds are paid directly to their designated accounts, thus eliminating the impact of check clearance policies and traditional mail lead time or delays. Payments that are processed electronically can be tracked and verified through the Comptroller’s Vendor Web system. The Commonwealth benefits because contractors reduce the cost of products and services through the applied discount. Bidders must submit agreeable terms for Prompt Payment Discount offerings using this PPD form with their proposal, unless otherwise specified by the PMT. All Prompt Payment Discounts must be based on a 10, 15, 20 and/or 30 day turn around time for payments. While bidders have flexibility in determining the actual % discount(s) offered to the Commonwealth, a bidder must base that discount using only 10, 15, 20 and/or 30 days and by inputting that discount below into the appropriate row(s) under the column entitled “% Discount Off Proposed Price” beside the appropriate turn around time(s) also listed below. The Procurement Management Team (PMT) will review, negotiate or reject the offering as deemed in the best interest of the Commonwealth. The requirement to offer PPD discounts may be waived by the PMT on a case-by-case basis if participation in the program would be unduly burdensome on the bidder. If a bidder is claiming that this requirement is a hardship or unduly burdensome, the specific reason must be attached to this PPD form.

Bidder Name:

All discounts offered will be taken in cases where the payment date is within the specified number of days listed below and in accordance with the Commonwealth’s Bill Paying Policy, which may be found on the Comptroller’s website. The turn-around-time for payments will be measured from a) date services were rendered, goods received or b) receipt of a valid invoice, whichever is later. If internal systems require an alternate method of measuring payment turn-around times, the Bidder must note the issues below or on an attached page if necessary to be considered by the PMT. In cases where the Bidder considers that offering a Prompt/Early Payment discount would be a hardship, the Bidder must clearly define the issues and reasons for said hardship.

As an example of how to complete this form, if a Bidder is proposing that payments made within 10 days of invoice will receive a 5% discount off the contract price; payments made within 15 days of invoice will receive a 3% discount off the contract price; payments made within 20 days of invoice will receive a 2% discount off the contract price; and payments made within 30 days of invoice will receive a 1% discount off the contract price, then the bidder would insert under the “% Discount Off Proposed Price” column the prompt payment discount percentages proposed that correspond to the appropriate 10, 15, 20 and/or 30 day turn around time under the “Turn-around-time for Payments” column.

The back of this form is intentionally left blank for the bidder to include comments, conditions or clarifications to the discounts proposed below. Bidders may also attach additional pages if necessary.

10 Days

15 Days

20 Days

30 Days

I cannot offer a prompt pay discount because:

Updated 11/10/05