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Bill of Collections and Overpayments – Federal Contracts November 10 , 2011 Midwest SBLO Meeting

Bill of Collections and Overpayments – Federal Contracts November 10 , 2011 Midwest SBLO Meeting. Introduction. Presented by Ray Suennen Governmental Contracts Compliance Coordinator Integrys Energy Services, Inc RFSuennen@integrysenergy.com. Introduction.

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Bill of Collections and Overpayments – Federal Contracts November 10 , 2011 Midwest SBLO Meeting

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  1. Bill of Collectionsand Overpayments – Federal ContractsNovember 10, 2011Midwest SBLO Meeting

  2. Introduction Presented by Ray Suennen Governmental Contracts Compliance Coordinator Integrys Energy Services, Inc RFSuennen@integrysenergy.com

  3. Introduction This presentation is focused on Bill of Collection notices and Overpayments as related to compliance issues and operational processes

  4. Past Performance One of the factors involved in the evaluation process for awarding contracts is Past Performance The responsiveness to Bill Of Collections and the handling of overpayments is a performance issue

  5. Past Performance FAR 42.1501 Past Performance information is relevant information, for future source selection purposes, regarding a contractor’s actions under Previously awarded contracts.

  6. Past Performance FAR 42.1501 It includes ….. the administrative aspects of performance; the contractor’s history of reasonable and cooperative behavior, and commitment to customer satisfaction, …. the contractor’s record of integrity and business ethics, and generally, the contractor’s business-like concern for the interests of the customer,

  7. Past Performance Contracts may include the following; “Prompt actions taken by the offeror to correct performance problems will be a reflection of management concern for customer satisfaction.”

  8. Past Performance Bill of Collections and Overpayments are administrative aspects that are part of performance and are part of Past Performance

  9. Bill of Collection Notices A Bill of Collection (BOC) is a notice that states - “you are indebted to the United States Government in the amount of $x,xxx.xx” - please remit a check within 30 days of the date of this letter - One paragraph describes your rights - One page describes the collection process if you do not timely pay

  10. Bill of Collection Notices The notice is sent either by - Email to the CCR “Accounts Receivable POC” (point of contact) make sure the CCR email address is a current address and the person knows what to do if a BOC is received - US mail to the company’s name and address - with no person identified

  11. Bill of Collection Notices Bill of Collections - come without prior warning - are often more than a year after the date of the payment in question - are generated by an “auditor type” functioning person who is at a central payment processing location

  12. Bill of Collection Notices Bill of Collections - give generic reasons Erroneous - wrong vendor Duplicate payment A deposit was made in error identifying a date and a tracer number

  13. Bill of Collection Notices Department of Defense BOC notices - Come from the Defense Finance and Accounting Service (DFAS) - Are assigned a BOC # (11032112345C65) - Identifies a contract number, either Your contract number or An inter-agency contract number

  14. Overpayments The reasons for our BOC notices (Action) - Paid another vendor’s invoice (refund) - Paid balance due Included prior invoice amount (refund) Included over payment credit (offset) - Paid same invoice twice (refund) The Government pays by ACH with little identifying data to work with

  15. Scenario Issues A scenario that can occur - Overpayment occurs – wrong vendor paid - Payment is posted to the account - Subsequent invoice reflects credit - Government takes credit and pays net amount - Contract period ends - Customer account balance is zero - Contract is closed (6 months later) - BOC notice is received (12 months later)

  16. Scenario Issues Resolution - Document and schedule what has happened Identify Government took credit Account balance is zero Refund will mean re-billing for amount refunded - DFAS demands payment, because Paid another vendor’s invoice Can not correct their records without refund

  17. Scenario Issues Resolution - Notify your Contracting Officer Provide the correspondence with DFAS Request that CO provides a contact person to work with for approval of the re-bill The re-billing of the refunded amount will need either a new expenditure appropriation or to re-open the closed original contract -

  18. Scenario Issues Resolution Send refund By check To specific address Send DFAS contact copy of check Obtain verification from DFAS of the satisfactory payment of the Bill Of Collection -

  19. Bill Of Collection Examples Timing – For receipt of the payment for the re-bill 43 days – 102 days (our experience) Overpayment amounts $1,049.24 BOC - applied/credit/rebill $8,672.72 BOC - applied/credit/rebill $341,893.90 Refunded at time of receipt $2,042,771.85 Refunded at time of receipt BOCs have not included any interest or other fees

  20. Timing Examples Example # 1 - $8,672.72 Payment error 7/7/08 Payment received & posted to account as unapplied Sep & Oct Adjusted rates & issued credits 2/19/09 Received (net balance) payment 6/20/11 BOC issued (1 year & 121 days) 6/24/11 Issued payment to DFAS 6/24/11 Invoiced for returned amount 10/4/11 Received payment (3 months & 10 days to collect)

  21. Timing Examples Example # 2 - $341,893.90 Paid twice 4/29/09 Invoice created 6/2/09 Payment # 1 received 6/12/09 Payment # 2 received 9/17/09 Refunded payment # 2 ---------- 1 yr & 4+ months later 1/31/11 BOC issued 2/16/11 Replied & requested cancellation 2/16/11 Located repayment & closed

  22. Timing Examples Example # 3 - $2,019,768.22 Payment error Paid us for another vendor’s invoice 3/3/11 Received payment 3/15/11 Notified DFAS of overpayment 4/6/11 Funds withdrawn from our account

  23. Timing Examples Example # 4 - $8,947.42 Paid invoice twice 6/1/10 8,947.42 Invoice created for May 6/17/10 (8,947.42) Received payment # 1 6/24/10 (8,947.42) Received payment # 2 7/2/10 10,462.95 Invoice created for June 7/20/10 (1,515.53) Payment for June (net) 10/6/11 BOC issued 10/24/11 Request payment reclass 11/4/11 DFAS approval & cancel

  24. Overpayments Overpayments FAR 52.212-4 (i)(5) The Contractor shall remit the overpayment to the payment office cited in the contract along with a description of the overpayment …. ---------------------------------- If no payment office cited, request directions from Contracting Officer

  25. Summary Recommendations When payments do not match billings, request clarification (if real late – interest may be added) Notify Contracting Officer of overpayments Refund overpayments (be timely) Maintain a documentation file for overpayments - could be a past performance issue

  26. Summary Recommendations Do not allow Government personnel to take overpayments as credits on subsequent invoices Should minimize the number of Bill of Collections Makes responding to BOC easier Overall collection process should be shorter Will save your employees time and effort

  27. Summary Questions, & Comments

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