Table of Contents Overview……….………………………………..3 Terms………….…………..………………..…....4 Guidance……………...………………………….5 Responsibility………………………………….6-7 Determining Payment Due Date……...................8 Payment Documentation……………….…….9-10 Rejection of Invoices……………………….…..11 Exception to Acceptance…………………….…12 Process Table……………….………………..…13 2
Overview This training was designed to supplement Acquisition Alert 11-04 Delegation of Invoice Approval AuthorityAlert 11-04 Delegation of Invoice Approval Authority. This training will outline the responsibility of the Contracting Officer and the Contracting Officer Technical Representative as it pertains to payment of contractor invoices. 3
Terms Invoice Payment - a Government disbursement of monies to a contractor under a contract or other authorization for supplies or services accepted by the Government. (FAR 32.001) Prompt Payment - the date on which a check for payment is dated or, for an electronic funds transfer (EFT) the settlement date. (FAR 32.902) Designated billing office - the office or person (governmental or nongovernmental) designated in the contract where the contractor first submits invoices and contract financing requests. (FAR 32.001) Designated payment office - the office designated in the contract to make invoice payments or contract financing payments. Normally, this will be the Government disbursing office. (FAR 32.001) Delegation of Authority – to appoint a person who is authorized to perform specific duties under a contract. (Oversight and Compliance) 4
Guidance on Invoice Payments Authority to approve or disapprove payment of invoices is the responsibility of the Contracting Officer (CO), unless the CO elects to delegate the function to a designee in accordance with FAR 42.302. Pursuant to NOAA Administrative Order (NAO) 203-31, Section 6.02, NOAA CO’s have the authority to delegate the review and approval of invoices payments to other designated officials. Acquisition Alert 11-04, has granted delegation of authority for review and approval of all invoices submitted on NOAA contracts and orders to the Contracting Officer Technical Representatives (COTR), unless this authority is expressly retained by the CO. 5
Contracting Officer Responsibility Officially delegate authority to approve invoices by issuance of delegation memorandum to the identified COTR. Ensure the individual delegated with approval authority has a clear understanding of the terms and conditions of the contract. Ensure the contract identifies the COTR as the designated billing office to receive invoices. Provide a copy of the delegation memorandum or copy of contract/order containing the delegation to the Finance Office. Determine when it is necessary to retain invoice approval authority. Rescind delegation of authority in any instance where the delegate fails to comply with proper invoice processing, terms and conditions of the contract or poses an unacceptable risk to NOAA. 6
Contracting Officer Technical Representative Responsibility Read and sign delegation memorandum and return to CO. Become familiar with the terms and conditions of the contract. Date stamp the invoice with date received and ensure all invoices are submitted per FAR 32.905 If invoices are accurate and complete, process invoice per the payment provisions in the contract or order. If the invoice is not accurate, return the invoice to the contractor with the reasons why it is not a proper invoice per FAR 32.905. Coordinate with CO to determine appropriate payment for any rejected items, materials or services. Coordinate with CO when questions arise processing payments or if disputes arise regarding payments due or made. 7
8 Determining Payment Due Date In accordance with FAR 32.904 The due date for making invoice payments is determined by several factors: Payments are due either on the 30 th day after the designated billing office receives a proper invoice or on the 30 th day after the Government accepts the supplies or services (which ever is the latter of the two). Payments for construction contracts are due 14 days after the designated billing office receives a proper payment request. Perishable items payment due dates vary in accordance with FAR 32.904(f)
9 Contractor Provided Payment Documentation A proper invoice must include the following per FAR 32.904: Name and address of contractor Invoice date and invoice number Contract number or authorization for supplies or services performed Description, quantity, unit of measure, unit price, extended price of supplies or services performed. Shipping and payment terms Name and address of contractor official to whom payment is to be sent. Name, title, phone number, and mailing address of person to notify in the event of a defective invoice. Taxpayer Identification Number Electronic Funds Transfer banking information.
10 Government Provided Payment Documentation COTR authorization to pay must be accompanied by the following to Finance: Receiving report-must contain at a minimum: Contract number or other authorization for supplies delivered or services performed. Description of supplies delivered or services performed. Quantities of supplies received and accepted or services performed, if applicable. Date supplies delivered or services performed. Date the designated Government official accepted supplies or services. Signature, printed name, title mailing address and telephone number of the designated Government official responsible for acceptance or approval functions. Ensure a copy of the Delegation Memorandum has been provided to Finance.
Rejection of Contractor Invoices If an invoice is found to be inaccurate or does not contain sufficient payment documentation, it must be rejected within 7 days of receipt from the contractor. It is imperative inaccurate or improper invoices be rejected within 7 days for the sole purpose of computing an interest penalty that might be due the contractor. Government acceptance shall be 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 (FAR 32.904). If an invoice is rejected, the COTR must contact the CO in writing, documenting the rejection. The CO will incorporate the documentation into the official contract file. 11
12 Exception to Acceptance Except for a contract for the purchase of a commercial item, including a brand-name commercial item for authorized resale (e.g., commissary items), the contracting officer may specify a longer period for constructive acceptance in the solicitation and resulting contract, if required to afford the Government a reasonable opportunity to inspect and test the supplies furnished or to evaluate the services performed. The contracting officer must document in the contract file the justification for extending the constructive acceptance period beyond 7 days. Extended acceptance periods must not be a routine agency practice and must be used only when necessary to permit proper Government inspection and testing of the supplies delivered or services performed (FAR 32.904).
13 HCO ResponsibilityCO ResponsibilityCOTR Responsibility Review and approve invoices for payment or delegate authority. Officially delegate authority to review and approve invoice payments. Read and sign delegation memorandum provided by CO. If there are questions contact CO immediately for clarification. Determine acceptability of goods and services or delegate authority Provide delegation memorandum to COTR and Finance. Click for sample document. Click for sample document Become familiar with contract terms and conditions to ensure invoice complies with contract before approving payment. Delegate authority if deemed necessary per NAO 203-31 Section 6.02. Ensure the delegated individual has a clear understanding of contract and their responsibilities. Date stamp invoice with date received and ensure all invoices are submitted iaw FAR 32.905. Rescind delegation if delegated individual fails to comply with proper invoice process, contract pricing, contract terms or advance approval requirements. If invoices are accurate and complete, process invoice iaw the payment provisions in the contract or order. If the invoice is not accurate, return the invoice iaw FAR 32.905 to avoid paying interest on any claims. Notify CO in writing documenting invoice rejection. Coordinate with CO to determine appropriate payment reduction for any rejected items, materials or services. Coordinate with CO to obtain guidance when processing invoice or if disputes arise regarding payments due or made. Forward complete approval package to Finance Office for payment.