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This is probably a really stupid question, but I am used to that. My background as a contracting officer is in the area of Cost contracts, so I am not that familiar with how Fixed Price contracts are paid out. Does the contractor simply divide the total amount of the contract by 12 and then invoice monthly? Or does he have to submit his invoice showing the work they accomplished during the invoice period? The only clauses in the contract relative to payment is DFARs 252.232-7003 (WAWF Clause). Or is it something to be worked out between the contractor and the customer? Any advice is appreciated. Thanks.

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This is probably a really stupid question, but I am used to that. My background as a contracting officer is in the area of Cost contracts, so I am not that familiar with how Fixed Price contracts are paid out. Does the contractor simply divide the total amount of the contract by 12 and then invoice monthly? Or does he have to submit his invoice showing the work they accomplished during the invoice period? The only clauses in the contract relative to payment is DFARs 252.232-7003 (WAWF Clause). Or is it something to be worked out between the contractor and the customer? Any advice is appreciated. Thanks.

Please double check. One of the payment clauses called out in FAR 32.111 must be in the contract. The simplest answer is that generally, the contractor gets paid after the supplies or services have been delivered and accepted.

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This is probably a really stupid question, but I am used to that. My background as a contracting officer is in the area of Cost contracts, so I am not that familiar with how Fixed Price contracts are paid out. Does the contractor simply divide the total amount of the contract by 12 and then invoice monthly? Or does he have to submit his invoice showing the work they accomplished during the invoice period? The only clauses in the contract relative to payment is DFARs 252.232-7003 (WAWF Clause). Or is it something to be worked out between the contractor and the customer? Any advice is appreciated. Thanks.

For possibly more detailed explanation, please describe what the contract is for in general, but you do not have to identify it specifically. Hard to believe that there is no payment clause or prompt payment clause in the contract. This might have to be corrected.

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For possibly more detailed explanation, please describe what the contract is for in general, but you do not have to identify it specifically. Hard to believe that there is no payment clause or prompt payment clause in the contract. This might have to be corrected.

It is for the provisioning of enterprise networking, implementation, fielding and sustainment support for the development, adaptation, deployment, and sustainment of infrastructure and computing environment. There is the Prompt Payment clause in the contract and FAR 52.232-33 (Electronic Funds Transfer). Like I said, I am used to paying for actual costs incurred so this has me buffaloed. Seems like there should be some kind of Payment Schedule and not just flat, monthly payments. BTW - we inherited a bunch of similar contracts from elsewhere.

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It is for the provisioning of enterprise networking, implementation, fielding and sustainment support for the development, adaptation, deployment, and sustainment of infrastructure and computing environment. There is the Prompt Payment clause in the contract and FAR 52.232-33 (Electronic Funds Transfer). Like I said, I am used to paying for actual costs incurred so this has me buffaloed. Seems like there should be some kind of Payment Schedule and not just flat, monthly payments. BTW - we inherited a bunch of similar contracts from elsewhere.

Assuming you have a firm fixed price contract covering 12 months of services, put aside the intriguing obstacles your automated procurement system will present to you (Good luck!), and do the following: modify the contract to create a line item for the services covering a quantity of "12", a unit of "months", a "unit price" equal to the 12 month price divided by 12, and a "total price" equal to the unit price multiplied by 12.

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To me, napolik's advice makes sense only if you have twelve months of severable services or if you are buying a level-of-effort. But this might not be your case. I suppose you want the provisioning work completed, and one month's work will look very different from another month's work, and one month's work has no value to you by itself with nothing following. If your contract line item is for 1 JOB or something similar, and if your contract as written doesn't allow for progress, interim, or performance-based payments, then you pay the contractor the fulll amount at the end of the contract. If your contract line item is for 12 MONTHS or something similar, then that's how you pay.

If your contract does not allow for progress payments but you want to be nice to the contractor and provide such, please obtain some exchange of consideration so that it won't be a gift to the contractor.

If you're obtaining provisioning from a sole source original equipment manufacturer, well, your negotiating leverage might be weak. But you can always start by administering the contract as it is written.

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Good points, all. To pick up where ji left off, in the old days, for lump sum construction we used to have clauses that required the contractor to submit a schedule of values for review and approval, which then formed the basis for payment. Maybe they are still around, but I am extemporizing here, not doing research, just suggesting an avenue to explore with research. A good rule of thumb was to pay only for completed, measurable, usable pieces of work (milestone payments, not progress payments). Would it help your situation to use such an approach to negotiate some clarity into your contract via supplemental agreement?

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Guest Vern Edwards

The first question is: What kind of payment are you talking about -- a commercial interim payment, a contract financing payment, or a delivery payment? See the definitions at FAR 32.001.

If you are talking about a delivery payment, then payment is always the stipulated price for a stipulated delivery "item" ("contract line item" or "deliverable"). The "item" might be a specified product or a service. Look at the contract line item "schedule" (or "CLIN schedule") and note what the item or items are. It might be a single thing or units of a thing (EACH), or a single job (JO) or units of a job (MONTH or HOUR). The contractor is then paid the stipulated price for the unit of delivery, when the product or service is delivered and accepted. The contract should include a payment clause to this effect, such as 52.212-4(i), 52.232-1, 52.232-2, or 52.232-5(h).

If you are talking about a commercial interim payment or contract financing payment, then you must find the clause that specifies the nature o the payment and how it will be made, such as 52.232-5(B), 52.232-16, or 52.232-32.

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