Government contractors, particularly those who are new to government work and are working for a DoD agency, often face delays when submitting vouchers for payment. There are two common reasons why delays happen: the clerk processing the vouchers has a very different agenda from the contractor, and there are common mistakes on the vouchers themselves that can cause the vouchers to be kicked back to the contractor for correction.
First, contractors have to remember that the clerk who first processes vouchers has different priorities from the contractor:
• The clerical person responsible for processing vouchers doesn’t usually care whether the contractor gets paid or not. His/her goal is to process the paperwork if it’s correct, and kick it back if it isn’t.
• The clerical person processing those bills isn’t very knowledgeable beyond the narrow scope of his/her job. He/she won’t think, “Ohh, the bill says this, but it must mean that.” A contractor who designates a cost incorrectly will have the invoice rejected, not corrected.
What are the mistakes that lead to delays and rejection? According to a former DCAA employee who was responsible for reviewing public vouchers from contractors, here are the 10 most common mistakes contractors make:
1. Using the wrong Department of Defense Activity Address Code (DoDACC). This six-digit number identifies a unit, activity, or organization that has the authority to requisition and/or receive material. When a bill is submitted using the wrong code it goes to the wrong office, the DCAA office will reject the bill. Double-check with the contracting officer that the correct code is being used before submitting the first bill.
2. Submitting vouchers out of numerical sequence.
3. Billing indirect costs based on provisional billing rates that have not had prior DCAA approval.
4. Using outdated billing rates (i.e. applying last year’s rates to this year’s costs).
5. Failing to submit a request, along with supporting documentation, for new interim billing rates or for temporary adjustment rates (final billing rates are used after DCAA completes its audit of your incurred cost submission and there has been a formal rate agreement.
6. Mathematical errors, such as:
• Last cumulative plus new charges do not equal new cumulative
• Backing into the total funded amount rather than showing the actual incurred cost and subtracting the amount in excess of the funding limit.
• Rate times Base does not equal the amount shown on the public voucher.
7. Billing costs in excess of the funded amount of the contract.
8. Billing fee in excess of contractual limitations (some contracts cap fee at 85% until final billing).
9. Not billing by Contract Line Item Numbers/Sub Line Item Numbers (CLIN/SLNIN) when the contract is costed and funded by CLIN/SLIN.
10. Submitting incomplete, incorrect, or inadequate detail to support the public voucher.
Correct billing is the contractor’s responsibility, not the government’s. Don’t let these common billing errors lead to delays or rejection.