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Cewheaton

FFP Subcontract; Long Lead Material Milestone Payment

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Hello,

We have a terminated Vendor that we are trying to close out. The provided material procurements list does not include any of the materials outlined in a Milestone Payment early on in the POP of Long Lead Material Purchases. This invoice was approved and vouchered. My question, is would you approach this? When a vendor sends an invoice, it is certifying that the costs are accurate and are a result of the completion of a milestone. Upon closing the subcontract, to find out that no materials were procured and the invoice was vouchered and paid, I would think it is a violation.

How would you approach this contractually?

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Hi Cewheaton,

1. Did you terminate the vendor for convenience or for default? If convenience, what TforC clause was in your subcontract? If you used a government clause, please cite it. If you used a homegrown clause, please quote it.

2. How was the subcontractor to bill your company? Please quote the billing instructions from the subcontract. Did you have a payment clause (e.g., 52.232-32 or equivalent)? If so, please quote the clause and its requirements.

3. Was there a Milestone Plan (or Perfomance-Based Payment series of "events") in the subcontract? If so, what was the description of the Milestone/event for which the subcontractor billed you? What was the exact description on the subcontractor's invoice? Did it match the description on the subcontract's Milestone Plan?

4. When the subcontractor's invoice was approved, who approved it for payment? What reviews were performed to ensure that payment was appropriate? What documents were reviewed--for example, was the invoice compared to the subcontract? Was it compared to a shipping receiver or bill of lading? Why did your company believe it was appropriate to pay the subcontractor's invoice?

5. You say that no materials were procured (by the subcontractor). Did the invoice your company paid state anywhere that it was based on costs incurred?

In other words, I think there is more information to be provided before I can provide a suggested approach.

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Also- Is the vendor a subcontractor to your company?  In other words, are you prime contractor to the government? 

Since you asked how to approach the situation contractually, please elaborate about the contract type (FP?; Cost reimbursement?;   services; supply; construction?; etc.).  Did the government pay you? Are you the Government? 

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22 hours ago, Cewheaton said:

How would you approach this contractually?

As I noted in yesterday's post, I would start by reading the (sub)contract.

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16 minutes ago, here_2_help said:

As I noted in yesterday's post, I would start by reading the (sub)contract.

Amen.  

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