Overview
FAR 13.401 defines the "fast payment procedure," which allows the government to pay a contractor before formal verification of receipt and acceptance of supplies. This process relies on a contractor's certification of shipment and their commitment to remedy any delivery or quality issues post-payment.
Key Rules
- Pre-Verification Payment: Payment is authorized based on an invoice submission rather than confirmed government acceptance of goods.
- Contractor Certification: The submission of an invoice constitutes a formal certification that the contractor has delivered the supplies to a post office, common carrier, or the government's point of first receipt.
- Liability for Defects: The contractor is legally obligated to replace, repair, or correct any supplies that are not received, damaged in transit, or fail to conform to the purchase agreement.
- Debt Determination: The Contracting Officer (CO) is primarily responsible for calculating and determining debts owed to the government if a contractor fails to fulfill their obligation to replace or correct faulty or missing supplies.
Practical Implications
- This procedure significantly accelerates cash flow for contractors by bypassing the standard inspection-before-payment cycle.
- It shifts the administrative burden and risk to the contractor, requiring them to proactively manage transit issues and product quality even after payment has been received.