10 steps to winning a government contract - Step 9

Getting paid

May 9, 2006
By: John DiGiacomo, Jim Kleckner

Once you have your contract and have delivered product on time and within specifications, it's time to find out how to get paid in a timely fashion.


So you have your contract and have delivered on time and within specification. Now it's time to address payment.

Getting paid is a fascinating topic to discuss. Some companies fight tooth and nail to get in with commercial contractors because they think they're easy to deal with, but they also admit that cash flow can be a problem.

"Major prime commercial contractors pay in 90 or 120 days, if they pay at all," some say.

The federal government is different. By law, the government must pay you in 30 days or less. Currently, you can get paid in about 15 days with electronic funds transfer (EFT). The catch, however, is that the clock starts running only when the government receives a proper invoice. You are responsible for sending out an invoice that's filled out correctly.

To pay you, the government needs to know:

  • The name and address of your company.
  • The invoice date. Try to date the invoice as close as possible to the date you mail it.
  • The contract number. Without that, it's hard to know what you did.
  • The description, quantity unit measure, unit price, and extended price of the product delivered.
  • Shipping and payment terms.
  • The contact person at your company responsible for receiving the payment.
  • The name, position, and contact information for the person the government should notify if something is wrong with the invoice.
  • Other information, such as evidence of shipment and delivery.
  • Your Central Contractor Registration (CCR) information.
  • Any EFT information.

You may use your own company invoice with the government, but if you do, you must make sure it meets these requirements. If it doesn't, it can slow or stop payment. It may be easier to use the government DD Form 250; this is a material inspection and receiving report (MIRR). If you're working with a packaging house that's used to dealing with the government, they can complete this form for you. The form can be used for:

  • Contractor invoice.
  • Commercial invoice support.
  • Shipping.
  • Receiving.
  • Packing list.
  • Evidence of acceptance at origin or destination.
  • Evidence of government contract quality assurance at origin or destination.

This form can help you keep track of your government contracts. The government even provides an explanation of the form and its use.

Most Procurement Technical Assistance Centers (PTACs) hold classes or workshops on how to fill out DD Form 250. You also can get help from a local federal government small-business office. To find one in your area, visit www.dod.mil/dfas/comm pay/vptraining.htm.

Also, PTAC mailing lists often include information on Wide Area Workflow (WAWF). An electronic document delivery system, WAWF helps you get paid on time by reducing lost or misplaced documents; helps you route documents quickly; offers opportunities for discounts; provides total visibility of document status; eliminates the cost and time of U.S. mail; secures transactions with an audit trail; and provides downloadable software from the Internet at no cost.

Another note: If you're going to fill out several bids, visit the Online Representations and Certifications Application (ORCA). This e-government initiative replaces the paper-based representations and certifications process you see in bid documents. To fill it out, you must have a CCR and have all your information in front of you when you get online. To find out what ORCA is and what information is available, visit https:// orca.bpn.gov/faq.aspx.

Once you have registered with these offices and sites, you will be on your way to getting paid. As always, if you need help, contact your local PTAC.

John DiGiacomo is the director of the Rock Valley College Procurement Technical Assistance Center, 605 Fulton, Rockford, IL 61103, 815-921-2091, JDiGiacomo@ rvc.cc.il.us, www.wingov.com.

Jim Kleckner is a retired acquisition specialist from the Department of Defense and owner of Government Contracting Assistance, 2168 Spaulding Ave., West Dundee, IL 60118-3521, 847-426-7003, klecknerj@yahoo.com.

John DiGiacomo

Director, Procurement Technical Assistance Center
Rock Valley College
605 Fulton
Rockford, IL 61103
Phone: 815-921-2091

Jim Kleckner

Government Contracting Assistance
2168 Spaulding Ave.
West Dundee, IL 60118
Phone: 847-426-7003

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