DMB044 Posted January 30, 2009 Report Share Posted January 30, 2009 The prime contractor authorized advance payments to a subcontractor for deposits to be placed in reserving mill and shop time. Because the mill was unable to accept even the deposit at that time, the subcontractor applied the advances to offset other incurred costs. While the subcontract was not overpaid as a result of the action, the advances were not used for the purpose intended. Is this a no-harm, no-foul situation? Link to comment Share on other sites More sharing options...
Retreadfed Posted February 1, 2009 Report Share Posted February 1, 2009 The prime contractor authorized advance payments to a subcontractor for deposits to be placed in reserving mill and shop time. Because the mill was unable to accept even the deposit at that time, the subcontractor applied the advances to offset other incurred costs. While the subcontract was not overpaid as a result of the action, the advances were not used for the purpose intended. Is this a no-harm, no-foul situation? What is your concern in regard to this? Are you with the government or prime contractor? What type of contract is the prime contract? Link to comment Share on other sites More sharing options...
joel hoffman Posted February 2, 2009 Report Share Posted February 2, 2009 Can't read your mind. What kind of contract is this (service, supply, construction, etc.) and is it FFP or something else? What payment and prompt payment clauses are in the contract? Link to comment Share on other sites More sharing options...
DMB044 Posted February 13, 2009 Author Report Share Posted February 13, 2009 Can't read your mind. What kind of contract is this (service, supply, construction, etc.) and is it FFP or something else? What payment and prompt payment clauses are in the contract? Link to comment Share on other sites More sharing options...
DMB044 Posted February 13, 2009 Author Report Share Posted February 13, 2009 Sorry about the delay in responding, Joel. I have been inundated. The subcontract is a FFP where the deposits were made for a production run of steel plate. The subcontractor billed the prime, citing the progress payment schedule and the line items related to the deposits. No evidence of an actual deposit was provided between the sub and the mill. The subcontractor used the deposit money to offset costs incurred against the other line items, which consisted of the design, fabrication, delivery and installation/construction of the end items. To complete the picture, after several months of inquiries about the status of the steel plate, we were advised that the mill was under a military priority 'DX' rating, and if the Federal agency was unable to obtain priority, delivery would have to wait. As a result of the delay and other considerations, the customer requested the t for c. By the way, is there an independent means to verify when a specific mill was under a priority protocol and the duration of that priority? Thanks for you response, Joel. Link to comment Share on other sites More sharing options...
.gif)
Recommended Posts