LM_ABITWT

Significant delays in voucher review/approval

31 posts in this topic

I have a serious problem with one of my CORs not reviewing vouchers submitted to him for several months and then when he does review he finds a problem with it and we have to re-submit and then another long period of time passes and the COR finds another problem or has another question.

This goes on for several months and we're not getting paid for 180 days or sometimes longer.

I understand that it's our job, as the contractor, to ensure our invoices are 100% accurate, but what recourse do I have to get my COR to review the invoices more timely?

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Two things: First, you do not want to end up on the bad side of the COR. Enough said. Second, if the problem is defective invoices, then you should fix that problem before you complain about the COR. Once you have fixed that problem you can sit down and talk things over with the COR, but I think that before you take formal action to pressure the COR you should look back to my first point.

Have you talked with the COR about the problem? If so, what was the response?

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We have had conversations with teh COR about this problem and he basically told us that he manages several programs and is very busy. He says will try to do a better job and review them in a more timely manner . However, we have yet to see that happen. Understand your point about our invoices must be correct otherwise, we have no room to complain. Historically the invoices have been fine, but the amount of time it is taking him to finally approve is drawing a tremendous amount of attention from our sr. mgmt. They feel we are meeting our part of the contract, but the government is not meeting there's. Our contract contains 52.232-25 and Alt I, but I do not see anything that addresses a COR's untimely review of an invoice other than it states the authorizing representative will review/return within 7 days. We looking at a minimum of 60 days before he even begins to look at it.

I understand your point of not getting on the wrong side of the COR, but we've tried to be patient with him, but that doesn't seem to be working out for us. Any additional guidance you can provide would be much appreciated.

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Okay. I would write a letter to the CO with a copy to the CO's boss stating that the problem is serious and threatens performance. I would ask that specific action be taken within a specific period of time. I would send it by a method that will give you a written record of the CO's receipt. Certified mail, return receipt requested tends to get attention. Stand by for repercussions, but hopefully also for positive action. Be prepared for retaliatory nitpicking over each voucher.

If you don't get timely action in response to your letter, start filing a claim pursuant to the Disputes clause for each and every voucher for which you do not receive payment within 30 days of the COR's receipt. State that since the government has not acted upon your request within 30 days as required by the Prompt Payment clause you consider the voucher to be in dispute. You should get legal help for that.

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Was the payment office adding prompt payment act interest to your payment, when they finally got around to issuing you a check? If not, you may have an action for an additional claim on unpaid PPA interest.

But as Vern already advised, if you are going to play hard ball, talk to an attorney first.

Hope this helps.

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Was the payment office adding prompt payment act interest to your payment, when they finally got around to issuing you a check? If not, you may have an action for an additional claim on unpaid PPA interest.

But as Vern already advised, if you are going to play hard ball, talk to an attorney first.

Hope this helps.

If the clause requires the government to review the voucher within seven days, you need to cite that in your notices to the KO. Your attorney can explain the consequences of failure to timely review invoices.

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Joel,

We seem to differ a bit on this issue. My take on it is that "Government acceptance is deemed to occur constructively on the 7th day after the contractor delivers supplies or performs services in accordance with the terms and conditions of the contract, unless there is a disagreement over quantity, quality, or contractor compliance with a contract requirement."

So I'm thinking that the clause can be silent and the 7 day rule would apply. In fact, we should assume the 7 day rule applies, unless the clause is worded differently.

H2H

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help:

The original poster said that the contract is CPFF, so the Prompt Payment clause, FAR 52.232-25, must be used with its Alternate I in accordance with FAR 32.908( c)(3). Alternate I adds a paragraph (e) to the clause, which says that paragraph (a)(5)(i), which contains the seven day "constructive acceptance" rule, does not apply to invoices for interim payment. Instead, paragraph (e) says that non-compliant invoices "will be returned within 7 days after the date the designated billing office received the invoice." Note that it says "will be returned," not "shall be returned." So we need to know if the invoices in question are for interim payment or delivery payment.

I think that's still useful to the contractor in this case, but not as useful as the constructive acceptance rule.

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Is this contract invoiced through WAWF or a similar system ?

Seems to me that when a COR on a contract of mine failed to review and put a notoation that there was something wrong with one of my invoices within 7 days, then WAWF just went ahead and processed the invoice without her input.

After that happened 2 times, the COR learned that no, the world doesn't sit around waiting until she feels like doing her job.

From that point on, she went into WAWF and approved invoices in time.

LM ABITWT's problem isn't really with the COR; the CO isn't doing their job.

This COR cannot handle their job responsibilities, but it's not their place to fire themselves.

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Vern thanks for the clarification. I withdraw my comment about Joel's comment.

H2H

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The question that interests me is: What is the COR doing with the voucher? What is he looking at? What is he looking for? I have always wondered that about COR reviews of vouchers/invoices for CR and T&M contracts. When a COR "approves" a voucher or invoice, what does the approval signify? What is okay about the voucher or invoice.

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Following on to Vern's point, if the contract is with DoD, look at DFARS 242.803. The way I read that section, the COR should not be reviewing your vouchers. I know that DPAP has issued a couple of memos on this point trying to get contracting offices to comply with the DFARS.

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Following on to Vern's point, if the contract is with DoD, look at DFARS 242.803. The way I read that section, the COR should not be reviewing your vouchers. I know that DPAP has issued a couple of memos on this point trying to get contracting offices to comply with the DFARS.

I wouldn’t say that the COR should not be reviewing vouchers; just that the COR should not be in the critical path for processing vouchers for payment. Witness this excerpt from the DOD COR Handbook – “The COR’s responsibilities begin with understanding the contract and establishing the COR file. Monitoring the contract includes such activities as evaluating and maintaining data, documenting performance, and review/verification of invoices.” [emphasis added.]…

“Typical COR post-award responsibilities include:


  • Monitoring contract performance;
    • Training;
    • Travel;
    • GFP
    • Personnel and labor;

    [*]Inspection and acceptance or rejection of deliverables;

    [*]…”

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Following on to Vern's point, if the contract is with DoD, look at DFARS 242.803. The way I read that section, the COR should not be reviewing your vouchers. I know that DPAP has issued a couple of memos on this point trying to get contracting offices to comply with the DFARS.

I can't believe that DOD or any responsible acquisition organization would tell COR's or others not to make some sort of review of vouchers. DCAA auditors are AUDITORS, not technical or management. In addition, DCAA, as far as I know, uses sampling techniques. They don't verify every item in an invoice. I think that many folks think that they go through every item with a fine tooth comb, like a travel voucher examiner, who have been known to question $ .50 worth of expenses.

The COR must be able to determine whether the right things are being done, do the expenses make sense, are they necessary, etc. The COR should detect trends to avoid wasteful or unreasonable costs/expenses/activities, etc. I don't think that auditors do that.

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Review vouchers for what? They usually don't know anything (or much) about cost allowability, and they are not often in a position to verify hours worked or other costs incurred, at least not all of them. So when a COR approves a voucher just what is he or she saying?

It's one thing to affirm that work was done and that the work delivered or done conformed to contract requirements, but do you need to see a voucher to do that, other than to see what work it covers?

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excerpt from the DOD COR handbook reference invoice and payment date 22 March 2012.

CORs can approve invoices on fixed-price contracts. However, for cost-reimbursement,

time and-materials, and labor-hour contracts, CORs can review — but not approve —

invoices. For other than fixed-price contracts, DCAA has the sole authority for verifying

claimed costs and approving interim payment requests. Only the Contracting Officer can

approve final payment requests.

Basically the COR has to monitor the contractors performance, track the monthly reports, and surveillance reviews. As far as costs go, the COR will probably be looking at on service contracts the hours worked vs the hours billed and labor category as compared to the monthly reports the contractor submits and information gather from the COR's technical monitors, (if he has any) (if he even does that quite honestly)

If he sees an issue he is to contact the ACO and DCAA and get the issue rectified

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"Review" to what end? How can the COR verify the hours worked? Is he sitting side-by-side with every worker verifying that each of them is working on what they're supposed to be working on? Look at SF 1094, Public Voucher. What is a COR looking for? The only thing I can see is the list of articles or services, to see if the contractor is billing for the right kind of thing. But for other than supplies or simple services, how can a COR verify quantities?

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unfortunately he can't.

The COR will probably not get into the "weeds", or as you asked "Is he sitting side-by-side with every worker verifying that each of them is working on what they're supposed to be working on?" but will be looking bigger picture. Is the task getting done if is services to meet the required timeline.

The management reports, metrics and various other propaganda that the contractor provides will be what the COR utilizes in addition to the QASP.

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But under a cost-reimbursement or T&M contract it does not matter if the task is being done. The contractor gets paid anyway. The contractor gets paid even if the government terminates the contract for default. If there is a problem with performance the COR shouldn't wait until he's reviewing a payment voucher to say something. As for verification of costs and hours worked, that's what auditors do, based on accounting records.

I simply don't see the point in having a COR review payment vouchers for CPFF or T&M contracts. As a CO I never had a COR even look at a CPFF payment voucher. In this case you have a COR who is taking as long as 60 days to do a pointless thing, unless there is more to this than we have been told.

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Here is what 52.216-7(a)(1) says on this: "The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract." DFARS 242.803 designates the DCAA auditor as the authorized rep of the CO for this purpose. These authorities are contractual and regulatory in nature. The COR Handbook is neither and cannot be inconsistent with higher authority such as the FAR and DFARS.

Pursuant to the responsibility delegated to DCAA by DFARS 242.803, DCAM 6-1003 states: "the contract auditor is the authorized representative of the contracting officer to: (1) receive reimbursement vouchers, interim rate adjustment vouchers, and final rate adjustment vouchers directly from contractors."

Finally, see the DPAP letter at this link on approval of vouchers http://www.acq.osd.mil/dpap/policy/policyvault/2008-0171-DPAP.pdf

This is all consistent with DCAA's charter, DODD 5105.36, which states that DCAA will "Approve, suspend, or disapprove costs on reimbursement vouchers received directly from contractors, under cost-type contracts, transmitting the vouchers to the cognizant Disbursing Officer." Notice that the Directive and DCAM state that the auditor will receive the vouchers directly from the contractor.

From all this, I get that DoD contractors are to submit interim vouchers directly to DCAA for review and approval as part of the payment process. They should not go to a COR first. However, I don't see any problem with the COR getting an information copy of the vouchers for performance of his/her responsibilities.

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The memo says that CORs "may review contractor billings as part of their contract performance surveillance (e.g., hours billed and labor mix are commensurate with contract effort performed/accomplished)....

Such a review does not make a heck of a lot of sense to me, since it cannot be the basis for any decision about reimbursement under a CR contract other than the reasonableness of incurred costs, and even then is unlikely to be grounds for not reimbursing the contractor. It would require a CO decision. I don't think the government can refuse to pay a T&M contractor for hours actually worked on any grounds of unreasonableness.

As far as I'm concerned, having a COR review vouchers or invoices for CR and T&M contracts simply does not make a heck of a lot of sense, especially if it's resulting in unwarranted payment delays. But the government will do this as long as contractors won't demand that the government respect their contractual rights. The government does these things because contractors are afraid to insist that their rights be respected.

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The memo says that CORs "may review contractor billings as part of their contract performance surveillance (e.g., hours billed and labor mix are commensurate with contract effort performed/accomplished)....

Such a review does not make a heck of a lot of sense to me, since it cannot be the basis for any decision about reimbursement under a CR contract other than the reasonableness of incurred costs, and even then is unlikely to be grounds for not reimbursing the contractor. It would require a CO decision. I don't think the government can refuse to pay a T&M contractor for hours actually worked on any grounds of unreasonableness.

As far as I'm concerned, having a COR review vouchers or invoices for CR and T&M contracts simply does not make a heck of a lot of sense, especially if it's resulting in unwarranted payment delays. But the government will do this as long as contractors won't demand that the government respect their contractual rights. The government does these things because contractors are afraid to insist that their rights be respected.

Amen. The way contractors frequently react to being abused by contracting officers is the same way many battered spouses react to the batterer "if I am just nicer to him/her, (s)he will stop beating me." However, it just doesn't work.

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Retreadfed,

Actually, many of the larger contractors are insisting that their contractual rights be respected, via appeals filed at the ASBCA and CoFC. There's a tsunami of litigation headed the government's way--forced on contractors by flawed DCAA audits and COs who refuse to exercise independent business judgment in their "quasi-judicial" role of arbiter. I know this is so because I hang out with folks from the larger contractors at industry gatherings.

I found it interesting that the recent article posted on this site, dealing with the Contracting Officer's Final Decision, failed to mention the requirements imposed on the CO by the Courts in such cases as Penner Installation. Vern has written at least one very good blog post on that particular subject ... yet the agency attorney didn't feel it merited any mention in his article. Not to trash the author, because any writing for publication is hard, but I found the omission to be very interesting.

Anyway, keep watching the Courts. You'll see what I'm talking about, as the decisions are issued.

H2H

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