Government contractors, particularly those who are new to government work and work for a Department of Defense agency, often face delays in submitting pay stubs. There are two common reasons why delays occur: the employee processing the vouchers has a very different agenda than the contractor, and there are common errors in the vouchers themselves that can cause the vouchers to be returned to the contractor for correction.
First, contractors must remember that the employee who first processes the vouchers has different priorities than the contractor:
• The administrative person responsible for processing the vouchers generally does not care if the contractor is paid or not. Your goal is to process the paperwork if it is correct and return it if it is not.
• The administrative person who processes those invoices does not have much knowledge beyond the limited scope of their job. He/she won’t think, “Ohh, the bill says this, but it must mean that.” A contractor who incorrectly designates a cost will have the invoice rejected, not corrected.
What are the mistakes that lead to delays and rejections? According to a former DCAA employee who was responsible for reviewing contractors’ public receipts, these 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 request and/or receive material. When an invoice with the wrong code is sent to the wrong office, the DCAA office will reject the invoice. Double check with the contracting officer that the correct code is being used before submitting the first invoice.
2. Submit vouchers out of numerical sequence.
3. Indirect billing costs based on provisional billing rates that have not had prior approval from the DCAA.
4. Using outdated billing rates (ie, applying last year’s rates to this year’s costs).
5. Failure to submit an application, along with supporting documentation, for new interim billing rates or temporary adjustment rates (final billing rates are used after DCAA completes its audit of the submission of costs incurred and has there has been a formal fee agreement).
6. Math errors, such as:
• Last accrued plus new charges do not equal new accrued
• Go back to the total amount financed instead of showing the actual cost incurred and subtracting the amount that exceeds the financing limit.
• Rate per Base is not the same as the one that appears on the public receipt.
7. Billing costs in excess of the contract financed amount.
8. Billing rate in excess of contractual limitations (some contracts limit the rate to 85% until final billing).
9. Do not bill for Contract Line Item Numbers/Subline Item Numbers (CLIN/SLNIN) when CLIN/SLIN costs and finances the contract.
10. Submit incomplete, incorrect or inadequate data to support the public receipt.
Correct billing is the responsibility of the contractor, not the government. Don’t let these common billing errors cause delays or denials.