Bill of Collections
and Overpayments –
Federal Contracts
November 10, 2011
Midwest SBLO Meeting
page
Introduction
Presented by
Ray Suennen
Governmental Contracts
Compliance Coordinator
Integrys Energy Services, Inc
RFSuennen@integrysenergy.com
page 1
Introduction
This presentation is focused on
Bill of Collection notices and
Overpayments as related to compliance
issues and operational processes
page 2
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
page 3
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.
page 4
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,
page 5
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.”
page 6
Past Performance
Bill of Collections
and Overpayments
are administrative aspects
that are part of performance
and are part of
Past Performance
page 7
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
page 8
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
page 9
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
page 10
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
page 11
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
page 12
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
page 13
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)
page 14
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
page 15
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
page 16
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
page 17
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
page 18
Timing Examples
Example # 1 7/7/08
$8,672.72
Payment error
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)
page 19
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
page 20
Timing Examples
Example # 3 -
$2,019,768.22
Payment error
Paid us for another vendor’s
invoice
3/3/11
3/15/11
4/6/11
page 21
Received payment
Notified DFAS of overpayment
Funds withdrawn from our
account
Timing Examples
Example # 4 -
$8,947.42
6/1/10
8,947.42
6/17/10 (8,947.42)
6/24/10 (8,947.42)
7/2/10 10,462.95
7/20/10 (1,515.53)
10/6/11
10/24/11
11/4/11
page 22
Paid invoice twice
Invoice created for May
Received payment # 1
Received payment # 2
Invoice created for June
Payment for June (net)
BOC issued
Request payment reclass
DFAS approval & cancel
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
page 23
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
page 24
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
page 25
Summary
Questions,
& Comments
page 26