51.105
Payment for shipments
Contractors must promptly pay for government-supplied shipments upon receiving the bill, which is sent only after shipment and serves as proof of liability.
Overview
FAR 51.105 outlines the payment process for contractors who order supplies from Government stock through agencies such as GSA, DoD, and VA. The regulation specifies that contractors will not be billed until after the supplies have been shipped. Once the contractor receives the bill, this serves as sufficient evidence of liability and the basis for payment. Contracting officers are responsible for instructing contractors to make prompt payments upon receipt of these bills. This process ensures timely payment for government-furnished supplies and clarifies the point at which contractors become liable for payment.
Key Rules
- Billing After Shipment
- Contractors are billed only after supplies have been shipped from Government stock.
- Evidence of Liability
- Receipt of the bill establishes the contractor’s liability and obligation to pay.
- Prompt Payment Requirement
- Contracting officers must instruct contractors to pay promptly upon receiving the bill.
Responsibilities
- Contracting Officers: Must direct contractors to make prompt payment upon billing receipt.
- Contractors: Must pay for government-supplied shipments promptly after receiving the bill.
- Agencies (GSA, DoD, VA): Issue bills only after shipment and rely on billing as evidence of contractor liability.
Practical Implications
- This section clarifies when contractors are financially responsible for government-supplied materials.
- Ensures contractors are not billed prematurely, but must pay promptly once billed.
- Delays in payment can impact contractor standing and future access to government supply sources.