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Per SAP, when you use Evaluated Receipt Settlement, you agree with the vendor that they will not submit an invoice in respect of a purchase order transaction. Instead, the system posts the invoice document automatically on the basis of the data in the purchase order and goods receipt. I am trying to reconcile this process with regulatory guidance. Our contracting shop deals primarily with commercial acquisitions above the SAT for Firm-Fixed Price or FP-EPA. Per FAR, we cannot tailor provisions and clauses, in commercial acquisitions, in a way that is inconsistent with commercial practices, without a waiver. Traditionally, invoices are submitted for payment. Per FAR, due to the implementation of statutory requirements, provisions and clauses relating directly to payment and invoice shall not be tailored. This process improvement would directly impact the invoice requirement in FAR Part 12. There are similarities between ERS and Fast Pay; however, Fast Pay is a feature of Simplified Acquisitions and places a limit at $25K per invoice, which we would definitely exceed. Under Fast Pay, invoices are examined after payment but the risk of overpayment is mitigated because the projected losses would be less than the administrative cost of examining all invoices. There is also a concern about how this would affect Prompt Pay which is based on when the invoice is received. If the invoice, claim against the government, is not received by the vendor, it seems that Prompt Pay would come in at the time the recipient received the goods. Payments could be made sooner if there is no discrepancy between what the vendor intends to send versus what the recipient claims to have received and what is on the purchase order. Physical documents, like shipping documents, would not be reviewed unless there were a discrepancy. Please provide feedback on removing the requirement for vendors to submit an invoice, under a commercial acquisition. Also, automating payment, without verifying documents, if the goods, the vendor intends to ship, the recipient receives, and the purchase order prescribes, all align within our automated system.
HAPPY NEW YEAR EVERYONE! This is my FIRST POST HERE :-) and this topic might also be appropriate under CONTRACT CLOSE-OUT I have a contract that has costs which were invoiced prior to the CLIN start date. Normally this might raise a flag, but it's merely a data point at this juncture. I don't know if there are any pre-contractual agreements in place that mitigate the potential for a setback. What I'm really looking for are the CAS, FAR and DFAR clauses that specifically state that absent other contractual agreements, costs prior to start date cannot be billed to the customer. Any assistance or insight would be greatly appreciated.
We are a telecommunications provider to the US Government and provide terrestrial data circuits to remote, and sometimes hostile, regions in the world. Under a 12-month contract, the Government requested a proposal for 12 months of service. The circuit is not considered accepted and billable until the Government performs its testing IAW the acceptance criteria. Given the regions we deliver service to, it is normal for circuit activation and testing to take three or more months from execution of a subcontract agreement to the activation and testing of the circuit. The salient points are: 1. The Government contracted for a terrestrial data circuit with a certain number of Megabits per second (Mbps) at a certain location specified in the SOW. 2. The period of performance was 5/1/15 – 4/30/16. 3. In Section B, the Unit specified was “EA,” and the quantity is “From 0.0000” “By 1.0000” to “To 1.0000” 4. The contract type was fixed price incentive in accordance with FAR Part 16.202. 5. We provided the Mbps to the locations specified in the contract beginning in November 2015. There are opinions internally whether we can bill the full amount based on service being provided for twelve months, even though the service was only accepted at month six or not. Terrestrial carriers (e.g. Verizon, Level3, etc.) typically require a 12 month commitment, so even though this firm price, severable service, extends beyond the PoP we will be billed for the full twelve months. The stronger and most likely reading of the contract is that the full amount of the annual service should not be charged unless the service was provided for the full 12-month period. However, reading the FAR suggests we may be able to bill for 12 months of service. Nonetheless, based on my experience with post hoc reviews by stakeholders OTHER THAN the contracting officer (such as inspectors general), a pro rated invoicing approach rather than invoicing the full amount, may be the correct interpretation. The contract does not state if it contemplated “immediate” commencement of performance, it is notable that the documents clearly provide that the period of performance was to be 5/1/15-4/30/16, which is exactly one year. (clause 152.211-705). In addition, the Statement of Work provides that the period of performance was to be “12 months from contract award.” Whether or not it is of note, there is no feasible way for service to commence immediately after order, and we are not billed by our subcontractor until the circuit is tested and accepted by the Government. The question then becomes whether “performance” in this context means (a) to begin to build the required communications capacity, or (b) to actually provide the required communications capacity. If “performance” requires only working on the development of the promised capacity, as opposed to actually providing the promised capacity as a service, then it appears that the fixed fee would have been owed. The contract does not offer any indication as to what it intended. I would also note that nothing in the contract appears to require a pro rating of the price to reflect the timing of the in-service dates (or acceptance dates). Nonetheless, there does not appear to be any language in the contract indicating that the customer can be charged for anything other than an operable network service that meets all of the speed and other technical parameters, and that this service is subject to a fixed price for a full 12-month service period. The task order has ended, but there is some discussion if we are entitled to invoice and be paid the fixed price established in the contract. The incentive monies are secondary, and will be determined and paid in accordance with the terms of the contract. The task order has ended, but there is some discussion if we are entitled to invoice and be paid the fixed price established in the contract. The incentive monies are secondary, and will be determined and paid in accordance with the terms of the contract. As a follow-on question: The Government awarded a single source follow-on contract for this service to begin 1 May 2016 – 30 April 2017. If the guidance is that we can bill for the full twelve months, should there be concern about billing, effectively, twice for the same service (trailing six months after PoP end, and first six months of follow-on) even though the same service is being provided under a different contract?
My basic question is: What date should be used to determine when the 30-day clock starts for invoice payment? I have a CPFF contract that includes the Prompt Payment Clause and it also includes a local clause with the language "In accordance with the Prompt Payment Act (FAR 52.232-25), payment will normally be made within thirty (30) days after receipt of proper invoice or acceptance of supplies/services, whichever is later". The Prompt Payment Act states: "The due date for making invoice payments by the designated payment office shall be the later of the following two events: (A) The 30th day after the designated billing office receives a proper invoice from the Contractor (except as provided in paragraph (a)(1)(ii) of this clause); (B ) The 30th day after Government acceptance of supplies delivered or services performed". Per the FAR the definition of designated billing office is the office or person designated in the contract where the contractor first submits invoices. It is designated in the contract that invoices are to be submitted to the KO and the COR. Also, since this is a CPFF contract the invoices are submitted to DCAA after they have been approved by the COR. It is the opinion of the Contractor and myself if the Government accepts the invoice the "acceptance" is, in fact, the actual date the COR received the invoice and not the date he/she actually signs the invoice. So if the invoice is dated the 4th and date stamped by the COR on the 5th day of the month and after their review they sign it on the 10th then DFAS should start the 30-day clock from the 5th and not the 10th. For this scenario I am not including the time for DCAA to review or the actual date I have faxed the invoice to DFAS since our position is DFAS should start the 30-day clock after Government acceptance which is the 5th. Our "definition" of acceptance is based on the understanding that when you accept the invoice as proper that date is the date you received the invoice and not the date you signed it. The reason is why should the contractor be penalized the days the COR has to review the invoice. If he/she accepts the original invoice he/she is accepting the date it was received and not the date it was finally signed.