You have submitted an invoice for products or services provided under a prime contract and the government has not paid it. What can you do to get what is owed you?
First check the payment terms of your contract and confirm the invoice is valid and compliant with the requirements of the contract. Verify it was received. Now you need to know if payment has been withheld because of a problem with it. You will want to start inquiring as soon as the payment is past due. Sometimes (hopefully most times!) a simple phone call or email to the customer will reveal the problem so you can address it. If not, this is when you start documenting your collection attempts. For oral conversations, notes should be taken and the content of the call documented. A simple non-confrontational email to the cognizant government person restating the content of the call should follow. If the Contracting Officer is not on the call, he/she should be copied on the email.
When it becomes apparent that the government is not actively working toward resolving whatever is holding up the payment, a formal demand for payment (claim) should be made. It’s important not to let unpaid invoices languish for long. Government personnel assignments change and the people who have the knowledge to validate that services or products were received become unavailable and funding sources can expire.
Non-payment of an accurate, complete and timely invoice is a claim against the government. In the absence of other contract provisions providing an alternate means, claims are handled in accordance with FAR 52.233-1 Disputes and 41 USC Chapter 71 (Contract Disputes). The claim should be submitted to the Contracting Officer. Any claim exceeding $100,000 requires certification by an officer of the company. The language of the certification is laid out in the FAR. For claims of $100,000 or less, the Contracting Officer has 60 days to make a decision. For claims of more than $100,000 the Contracting Officer has 60 days to either make or decision or provide a date by which a decision will be rendered.
If the Contracting Officer denies the claim or fails to respond in the required time (which is deemed to be a denial), the contractor has the right to appeal the decision to one of the following agency boards: Armed Services Board of Contract Appeals, Civilian Board of Contract Appeals, Tennessee Valley Authority Board of Contract Appeals, or the Postal Service Board. The appeal must be filed within 90 days of receipt of the Contracting Officer’s decision. As an alternative, the contractor can seek relief from the United States Court of Federal Claims by filing an action within 12 months of the decision. For claims against the Tennessee Valley Authority, jurisdiction lies with a U.S. District Court.
Fortunately, invoices are routinely paid on time by the government and interest is usually paid without contractor action if there is a delay in processing that is not due to contractor failure to provide all necessary documentation. When there are issues, resolution can usually be handled without going as far as making a claim. But when there is the need for making a claim, it’s important for the contractor to do so in a timely manner.
In my nearly 40 years doing business with the federal government, I only once had a claim for non-payment of invoices.