PNWC's Government Contracting Update

Claiming Reimbursement for Costs Not Paid Lands a Contractor in Prison | PNWC’s Government Contracting Update

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The rules on billing or claiming reimbursements under Government contracts are not always straight-forward and certainly not consistent from one contract type to another. Government contractors must, in every case, consult their contracts to determine billing terms and conditions. Generally, the Government is not in the business of financing a contractor’s operations. Contractors need to spend their own money before seeking reimbursement under their Government contracts. Whether reimbursed by progress payments, milestone payments, or public vouchers, contractors should anticipate a two to three month float from the time they pay their workers or suppliers until they receive reimbursement from the Government. Some contractors try to jump the gun by submitting for reimbursement for costs not yet paid. For small businesses, that might be okay if exemptions are granted but for most Government contractors, that would be prohibited and could result in big trouble. Take Persaud Companies, Inc, for example.

Source: PNWC’s Government Contracting Update: Claiming Reimbursement for Costs Not Paid Lands a Contractor in Prison

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