Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, February 3, 1994                   TAG: 9402030169
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO 
SOURCE: Washington Post
DATELINE: WASHINGTON                                 LENGTH: Short

IT'S THE POSTAL SERVICE'S TURN TO SAY: THE CHECK'S IN THE MAIL.

Sort of.

The U.S. Postal Service, one of the government's biggest contractors, is watching its pennies to the extent that it has changed its payment system to make sure suppliers of everything from automation equipment to Zip code directories do not get paid a minute too soon. Talk about on-time delivery.

Under the terms of the Prompt Payment Act, the government has 30 days to pay suppliers. Until now, postal contractors often have been paid a week or so before the 30-day limit. That was cash in the bank, and they liked it.

But new computer software used by the Postal Service is smart enough to hold payment until exactly the 30th day, meaning that is the day the check goes out. Then the Postal Service gets to enjoy the "float" as the days pass before the check is delivered to the contractor and cashed.

"It's a good business decision," said Sandra Harding, a spokeswoman for the Postal Service. Since the service has about 170,000 contracts for goods and services worth about $2.6 billion, these things add up.

If suppliers think they can get paid faster by requesting electronic fund transfers, a computerized transfusion of cash right into their bank accounts, that will not work either.

A Postal Service memo suggests that contractors who choose computerized payment will have to offer "a small vendor discount." That means they will have to charge less for what the Postal Service buys from them, though it has not been decided how much less.