Bimonthly payments?

Ok, so I am adminstering a contract where the contractor (a small business) wants to be able to invoive and be paid bimonthly. We have not problem doing this, but we cant dtermine what clause to use. I have asked 2 KO's and looked in the FAR and cannont determine the clause. I thought prompt payment, but that is for 30 days. Can anyone point me in the right direction? TIA

Is the contract a cost-reimbursement type of contract? If so, does it include FAR 52.216-7, Allowable Cost and Payment? If not, what tpe of contract do you have, and what Payment clause is included?

It's just a FFP service contract. I will double check what payment clause is in included.

Is the contract a cost-reimbursement type of contract? If so, does it include FAR 52.216-7, Allowable Cost and Payment? If not, what tpe of contract do you have, and what Payment clause is included?

Whether the contract is a for a non-commercial or commercial item also has bearing. Suggest a read of FAR 32.1 and 32.2 and any agency supplements. See FAR 32.104( specifically. While it does not provide for bi-monthly payments it does give the open door to accommodate a small business when the payment is a form of contract financing. I would suggest that it is the opportunity to make bi-monthly payments if in the best interest of the Government and meets specific needs of a small business contractor.

Be careful! "Bimonthly" is ambiguous. It can mean every two months or twice per month.

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This warrants some consideration in return.

Switching to twice-a-month payments can be a tremendous benefit to a small business.

Normally, when a business bids, they built their prices based, at least in part, on their costs. This will cut costs appreciably.

If they knew that they could have got more frequent payments up front, don't you think that they would have factored that in ? Don't you think that might have elicited more bids ?

Consideration could be a lower price, but it could be something else of value to the Government: perhaps an additional report, or a white paper on a thorny issue. Maybe the contractor could take responsibility for opening up 2 days a week. Negotiate on behalf of your Government client. What would benefit them ?

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ashleyh,

I like Brian's approach -- do what is best for your organization -- if your FFP services contract specifies monthly invoicing, then it's monthly invoicing unless you decide there is a benefit to your organization to entertain a change proposal (including consideration) from the contractor.

But please don't go to twice-a-month invoicing just because the contractor wants it. The contractor should have other mechanisms to finance its operations.

Perhaps your contract is based on monthly items (such as an annual need described in the contract's schedule as 12 MONTHS, where each month's service is severable). In this case, your contract probably includes the Payments clause at FAR 52.232-1 without any progress payments or other contract financing clauses. In this case, you pay for each completed month and your contract has no authority for progress or other contract financing payments -- and this is probably the right answer and should be left alone.

Maybe all of the competitors in the original acquisition proposed with an understanding that progress or other contract financing payments would not be available. If other competitors had known that contract financing would be available, they might have proposed differently and one of them might have ended up as the successful offeror. After all, contract financing is a real cost that every prudent contractor has to bear, and the Government's carrying of that real cost should result in a lower proposed contract price. So if you do give the contractor some contract financing arrangement after award, please be sure to obtain an appropriate price reduction or other consideration to reflect the contractor's lower costs and the Government's increased administrative and financial burden.

ji

Be careful! "Bimonthly" is ambiguous. It can mean every two months or twice per month.

Nope. The only meaning of "bimonthly" is every two months.

Twice a month would be "semi-monthly."

We all know the difference between "semi-annual" and "bi-annual" (or for gardeners, "biennial"), but we all seem to get confused when we change years to months.

Nope. The only meaning of "bimonthly" is every two months.

Twice a month would be "semi-monthly."

We all know the difference between "semi-annual" and "bi-annual" (or for gardeners, "biennial"), but we all seem to get confused when we change years to months.

"Only meaning"? Not true. See Merriam-Webster's Third New International Dictionary, Unabridged (2002):

bimonthly: : occurring, appearing, or done every two months; sometimes : occurring, appearing, or done twice a month -- compare SEMIMONTHLY

For gosh sakes just say something like "twice-monthly" or "twice per month" payments.

Again I find myself so old that what was taught when I was in school has eroded due to popular misuse, to the point where what used to be always wrong is now sometimes right.