One thought which hasn't been completely mentioned as the topic of withholding
a portion of subcontractor payments is the final billing to the prime. In order
to final bill a cost reimburseable agreement, all costs must be posted on the
accounting system. Even if your prime is slow in paying, that may not be reason
enough to delay payment to subcontractors. Your A-133 audit might include
findings about late closings of accounts is your billing of the prime is
delayed by holding a portion of the subcontractor payments.
Just a thought.

Raymond A. Foss
Manager of Asset Management and Cost Analysis
Office of Sponsored Research
University of New Hampshire
(603) 862-3466
(603) 862-3564 fax