Contractors learn how to get agencies to pay up

Know your contract and know the law if you want to get paid on time by the federal government, industry experts told federal contractors Tuesday at a conference in Washington.

Federal contractors who charge that they have submitted invoices to government agencies only to have them linger in paperwork purgatory are spending two days at the conference, which is sponsored by the Government Contracting Institute.

Sunny Davis, former head of the National Association of Credit Management's Government Receivables department, implored vendors and contractors to read the fine print on their contracts Tuesday in her "How to Collect from Uncle Sam" session.

"Read the contract! Know the contract!," Davis stressed during her session. "It's really critical that you look at how you write your contract so you know how you're going to get paid," she said.

Most of the information vendors need is spelled out in their contracts, including where to send invoices, how payment is to be received, when payment is to be received and other details that help streamline the payment process.

"I would love it if we could develop customer service where we could send it off and they would handle it, but the bottom line is we want to get paid," Davis said when one vendor complained about having to make multiple phone calls to track down invoices and other paperwork. "We have to carry the responsibility if we want to get paid."

That's a lesson already learned by Raissa Modrak, controller for Evidence Based Research, Inc., a Vienna, Va.-based public policy analyses organization.

"We invoice every two weeks and we're having trouble with multiple re-submissions of invoices," Modrak said, describing some of the problems while waiting in line to share her frustrations with Davis.

Davis has conducted several conferences and seminars on government collections. In her presentation, she painstakingly covered each facet of the 1982 Prompt Payment Act, including how to collect interest owed on late payments.

The Prompt Payment Act provides governmentwide guidelines for establishing due dates on commercial invoices and provides for interest payment on invoices paid late. Prior to passage of the act, the General Accounting Office reported that the federal government did not have uniform criteria for establishing due dates for vendor invoices. Many invoices were paid too early or too late, sometimes without regard to contract terms, the effect on vendors' cash flow, or the effect on government interest costs.

The subject was of particular interest to Cornell Jacobs, business manager for The Gallup Organization, a management consulting firm.

"I came to find out what processes one needs to know in order to get paid interest on late payments," Jacobs said during a break. "I want to find out how we can enforce this rule."

The annual conference also covers such topics as electronic funds transfer, the government smart card and Web invoicing. The sessions are led by vendors and employees from several agencies, including the Environmental Protection Agency, the Defense Finance and Accounting Service, the Treasury Department and the National Institutes of Health.