Jump to content
The Wifcon Forums and Blogs

Recommended Posts

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.

Share this post


Link to post
Share on other sites
Guest Vern Edwards
52 minutes ago, ContractMO said:

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.

I can't find any mention of evaluated receipt settlement anywhere in the FAR system. When you say "Per SAP," do you mean Simplified Acquisition Procedures or are you referring to the software company?

Share this post


Link to post
Share on other sites
2 minutes ago, Vern Edwards said:

I can't find any mention of evaluated receipt settlement anywhere in the FAR system. When you say "Per SAP," do you mean Simplified Acquisition Procedures or are you referring to the software company?

I was referring to the software company's description of their ERS process.

Share this post


Link to post
Share on other sites
Guest Vern Edwards
15 minutes ago, ContractMO said:

I was referring to the software company's description of their ERS process.

I assume that you work for the government. If so, then you presumably know that FAR 12.302(b) expressly prohibits tailoring of the Invoice provision of FAR 52.212-4 under any circumstances. Moreover, eliminating a "proper invoice" will be a complication with respect to compliance with the Prompt Payment Act, see FAR Subpart 32.9. If your agency wants to use ERS, and you don't want to receive an invoice as a prerequisite to payment, then you're going to have to work that out through some policy people. I don't think you can get approval for a FAR deviation in this case. I suspect that implementation of ERS will require action by OFPP, OMB, and perhaps Congress.

Share this post


Link to post
Share on other sites
3 hours ago, Vern Edwards said:

I assume that you work for the government. If so, then you presumably know that FAR 12.302(b) expressly prohibits tailoring of the Invoice provision of FAR 52.212-4 under any circumstances. Moreover, eliminating a "proper invoice" will be a complication with respect to compliance with the Prompt Payment Act, see FAR Subpart 32.9. If your agency wants to use ERS, and you don't want to receive an invoice as a prerequisite to payment, then you're going to have to work that out through some policy people. I don't think you can get approval for a FAR deviation in this case. I suspect that implementation of ERS will require action by OFPP, OMB, and perhaps Congress.

GAO released, Streamlining the Payment Process While Maintaining Effective Internal Controls, in May of 2000.

GAO was asked whether it would be permissible to make payments, under purchase order acquisitions, without a vendor's invoice solely on the basis of a receiving report or other documentary evidence showing receipt and acceptance. They reviewed the proposed process and responded stating, Title 7 does not preclude payments from being authorized without an invoice if adequate internal controls exist such as: 1)payment initiated after receipt and acceptance 2) controls against duplicate payment 3) payments coincide with due dates.

I assume FAR 12.302(b), which prohibits tailoring...under any circumstances, would trump this feedback from GAO.

Share this post


Link to post
Share on other sites
Guest Vern Edwards
35 minutes ago, ContractMO said:

GAO was asked whether it would be permissible to make payments, under purchase order acquisitions, without a vendor's invoice solely on the basis of a receiving report or other documentary evidence showing receipt and acceptance. They reviewed the proposed process and responded stating, Title 7 does not preclude payments from being authorized without an invoice if adequate internal controls exist such as: 1)payment initiated after receipt and acceptance 2) controls against duplicate payment 3) payments coincide with due dates.

The "Title 7" GAO was talking about was not Title 7 of the United States Code or of the Code of Federal Regulations. It was Title 7 of GAO's Policy and Procedures Manual for Guidance of Federal Agencies, which has no legal force or effect. The GAO characterized the May 2000 publication that you cited as a "guide." GAO did not address the issues that you have raised for acquisitions in excess of the Simplified Acquisition Threshold.

Work with your policy people.

Share this post


Link to post
Share on other sites
7 minutes ago, Vern Edwards said:

The "Title 7" GAO was talking about was not Title 7 of the United States Code or of the Code of Federal Regulations. It was Title 7 of GAO's Policy and Procedures Manual for Guidance of Federal Agencies, which has no legal force or effect. The GAO characterized the May 2000 publication that you cited as a "guide." GAO did not address the issues that you have raised for acquisitions in excess of the Simplified Acquisition Threshold.

Work with your policy people.

Thank you for the feedback.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×