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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.

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Guest Vern Edwards

If the contract is CPFF, then does it include the clause at 52.232-25 with Alternate I?

Also, is the invoice for an interim payment or for the delivery of services that have been performed and accepted?

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The contract includes 52.232-25 with Alternate 1. The invoice(s) are for services that have been performed and accepted. The SF1034 designates the payment as "provisional".

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Guest Vern Edwards

The person I'd like to hear from on this is here_2_help. Let's stand by for a bit and see if he sees this and will answer the question. Others might post, but he's the one I absolutely trust to get it right.

Hang in there for a bit.

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Vern,

I appreciate the vote of confidence. I'm on TDY today without access to any reference material (including legal cases). Here's what I think I know: the 30-day clock starts running upon receipt of an "proper" invoice OR Government acceptance--whichever is later. The invoice receipt date is determined IAW 5 CFR 1315.4( B). The receipt date is recorded by the receiving activity. If the receiving activity fails to annotate the receipt date, the receipt date is the date recorded on the invoice by the contractor.

See this DOD guidance -- http://comptroller.d...mr/10/10_07.pdf

Best I can do right now,

H2H

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I generally agree with H2H. However, some clarification is in order. "Acceptance" as used in the Prompt Payment clause refers to acceptance of supplies or services, not acceptance of an invoice. For an invoice, the clause talks about receipt of a proper invoice by the designated billing office. Thus, if a proper invoice is received by the designated billing office after supplies or services have been accepted by the government, the 30 day time period would start when the invoice is received by the billing office.

By the way, if you are in DoD why are you and not DCAA faxing the invoice to DFAS? Under the DFARS, DCAA has the exclusive authority to approve interim vouchers on cost reimbursement and T&M contracts.

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H2H and Retread have it right. The invoice may still be wrong, I see issues like this weekly. Wrong ACRNs, CLINs, etc; the payment office will determine if the invoice is proper and when the time counter starts. CORs, QARs sign forms all the time that are not correct (not putting them down, there is a lot to verify).

DFAS will pay interest if late.

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The way we have set it up is after I receive the signed invoice and SF 1034 from the COR I send it to DCAA. After DCAA has reviewed and approved the invoice they email it back to me and I fax the documents to DFAS. DCAA never had an issue doing it that way. Actually, they seemed surprised of their need to be included in the process. That's a conversation for another day. So for example: Invoice is dated July 2, 2012; COR date stamps it July 3, 2012; COR signs it July 6, 2012; DCAA signs the SF1034 on July 11, 2012; I fax the invoice and SF1034 to DFAS on July 11, 2012. On what day does the 30-day clock start. I think the clock should start on July 3, 2012. That is the day, in theory, the invoice was accepted as proper. I don't think the contractor should be penalized for our review time.

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tguns

A Proper invoice has to be totally correct. No errors, why would the clock start 3 July when is hasn't been reviewed to ensure it is accurate? A submission does not mean it is correct; the billing office (my assumption is where it was fax to) would be the best date to start in your example.

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Back in the office today. This is what was tickling my memory yesterday--

OMB regulations establish as a general rule that PPA interest penalty begins to accrue 30 days following the later of the date of actual receipt of the invoice if annotated or seven days after delivery of the supplies ordered, or the invoice date if not annotated, absent circumstances and exceptions not germane to disposition of the present motion. The actual acceptance date is relevant to the extent that it occurs prior to the end of the “constructive acceptance” period of seven days for this contract. … The government’s interpretation of the Prompt Payment clause ignores ¶ (a)(5)(i) of that clause which states that ‘acceptance is deemed to occur constructively on the 7th day (unless otherwise stated in this contract) after the Contractor delivers the supplies….’ Although FAR 32.908©(1) and FAR 32.904( B)(4) authorize extension of the seven day ‘constructive acceptance’ period if justified, no such modification of the date was specified here or permitted for this … contract. The ‘constructive acceptance’ provision in the clause is reiterated in FAR 32.904. See also DFARS 232.905(1). Of course, the government is entitled to take reasonable and appropriate actions to ensure conformance of the delivered supplies with contractual requirements. However, inspection delays extending beyond the prescribed seven days do not postpone accrual of interest penalty where there are no disagreements regarding quantity, quality or contractor compliance with contractual requirements.

http://www.asbca.mil.../2010/56864.pdf

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...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.

This may be an overly simplistic interpretation, but the language doesn't say anything about review time. I would think that if an invoice ultimately proves to be proper, the clock would have started ticking upon receipt by the KO/COR ("the office or person designated in the contract where the contractor first submist invoices") regardless of when the invoice was actually determined to be proper.

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Guest Vern Edwards

The original question was: "What date should be used to determine when the 30-day clock starts for invoice payment?"

Do we have an answer to that?

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I understand that the submission of the invoice does not mean it is proper. My position is why should the contractor be penalized for the days taken for us to review the invoice. If we accept the invoice, as originally submitted, within the prescribed 7 days, we have, in theory, accepted the invoice on the date it was date stamped by the COR/KO/Billing Office.

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Vern, I gave the correct cite but did not quote from 5 CFR.

"( B)Receipt of invoice. For the purposes of determining a payment due date and the date on which interest will begin to accrue if a payment is late, an invoice shall be deemed to be received:

(1) On the later of:

(i) For invoices that are mailed, the date a proper invoice is actually received by the designated agency office if the agency annotates the invoice with date of receipt at the time of receipt. For invoices electronically transmitted, the date a readable transmission is received by the designated agency office, or the next business day if received after normal working hours; or

(ii) The seventh day after the date on which the property is actually delivered or performance of the services is actually completed; unless—

(A) The agency has actually accepted the property or services before the seventh day in which case the acceptance date shall substitute for the seventh day after the delivery date; or

( B) A longer acceptance period is specified in the contract, in which case the date of actual acceptance or the date on which such longer acceptance period ends shall substitute for the seventh day after the delivery date;

(2) On the date placed on the invoice by the contractor, when the agency fails to annotate the invoice with date of receipt of the invoice at the time of receipt (such invoice must be a proper invoice); or

(3) On the date of delivery, when the contract specifies that the delivery ticket may serve as an invoice."

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Please bear with me. Based on here_2_help's post I am understanding the date the clock starts is the day the COR/KO/Billing Office receive the emailed invoice from the contractor. So, with the assumption the invoice is proper, if the email is received on July 3, 2012 and after review and approval from the COR and DCAA I fax the invoice to DFAS on July 12, 2012 the clock should start on July 3, 2012 and the contractor should expect payment by August 3, 2012. So based on the language I previously stated was in my contract "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" basically can be construed to mean that if the invoice is "proper" then receipt of a proper invoice and acceptance of the services are the same date (July 3, 2012). Therefore, the contractor is essentially not penalized for the Government's review time in that even though I may not have received the final approval from DCAA until July 12, 2012 based on the fact the invoice was approved you can say that we, the Government, accepted the services on July 3, 2012.

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Here is what 52.232-25 has to say about review time.

If the invoice does not comply with these requirements, the designated billing office will return it within 7 days after receipt (3 days for meat, meat food products, or fish; 5 days for perishable agricultural commodities, dairy products, edible fats or oils, and food products prepared from edible fats or oils), with the reasons why it is not a proper invoice. The Government will take into account untimely notification when computing any interest penalty owed the Contractor.

Based on this, review time is included in the 30 day time period. If the government takes more than 7 days to return a defective invoice, the excess time is deducted from the 30 days when the invoice is resubmitted. In tguns post number 8, the date the interest clock starts to run is 3 June when the COR received its.

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Guest Vern Edwards

Where does the contract tell you to send your vouchers for payment?

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Per the contract, the contractor sends the invoice to the COR and Contract Specialist (me). The COR is responsible to indicate the date received and date accepted. Although the contract states that DCAA is to forward the invoice to DFAS they email to me and I fax it to DFAS for payment.

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Tgun, I am still not clear on whether you are talking about interim vouchers on cost reimbursement contracts for services or completion vouchers on cost reimbursement contracts. If it is the former, your activity may want to reconsider the way you are processing vouchers in light of DFARS 242.803 which states

The contract auditor is the authorized representative of the contracting officer for—

( A ) Receiving vouchers from contractors;

( B ) Approving interim vouchers for provisional payment (this includes approving the fee portion of vouchers in accordance with the contract schedule and administrative contracting officer instructions) and sending them to the disbursing office;

( c ) Authorizing direct submission of interim vouchers for provisional payment to the disbursing office for contractors with approved billing systems;

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I am talking about basic monthly invoices for services for a contract wiith one base period and four, one-year options. I was not aware of DFARS 242.803 at the time of award. Despite knowing now we are going to continue processing invoices as we are. To that end, does the DFARS reference not require the COR/KO to receive and approve the invoice at any stage of the process.

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Please bare w/me. This is my 1st post. However, I have used this site quite a bit & have found a great deal of expert knowledge which has been extremely helpful.

My question is related to this post. I just got involved on a FFP services contract & I was cc'd on an e-mail from the contract specialist to the KTR inquiring about invoice payment and the response was to remind the KTR "that the Government has 7 more days from the time we receive your invoice to review it and either accept it or reject it." So, this essentially, gives the Gov't a total of 37 days to pay the invoice. Unless my interpretation of the Prompt Payment act & FAR 32.904 is completely off base, this is news to me (& I also checked w/some other contracting folks in my offc). I am under the same understanding of tguns that the KTR shouldn't be penalized for our review time & that the 7 day review time to accept or reject (& notify the KTR of rejected invoice) is w/i the 30 days that the Gov't has to pay. I just wanted to get some clarification because it appears to me that the specialist misinformed the KTR & I want to right this ship!

P.S. My agency does not use WAWF.

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Your understanding of the clause is correct. Review time is included in the 30 days for payment. Thus, the government does not have 37 days to make payment.

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