Agencies are encouraged to request early pay discounts from contract vendors when feasible. If early pay discount terms are included in a contract, the awarding agency should add the payment terms to the contract’s PO defaults in the Statewide Financial System (SFS).

Please note: Although agencies are encouraged to request early pay discounts whenever feasible, they should not be used as a factor to evaluate proposals/bids.

To encourage additional early pay discounts throughout a contract term, contracts should include language similar to the following:

• Where Contractor generally offers more advantageous special price promotions or special discount pricing to other customers during the Contract term for a similar quantity, and the maximum price or discount associated with such offer or promotion is better than the discount or net pricing otherwise available under this Contract, such better price or discount shall apply for similar quantity transactions under this Contract for the life of such general offer or promotion.
• If the Contractor offers an early payment discount, at any point in time, that is more advantageous to the State than the terms that are contractually obligated, the Contractor shall include the payment terms of the discount on the applicable invoice(s).

For more information see Chapter XII, Section 4.F - Proper Invoice and Chapter XII, Section 5.F - Selecting the Appropriate Payment Terms.

Guide to Financial Operations

REV. 06/07/2018