BOP Program Statement 2011.13 § 2

For purposes of this PS, the following definitions apply:

a. Acceptance. Acknowledgment by the Bureau of Prisons (BOP) that g oods or services

received agree with the order.

b. Applicable Interest Rate. Rate established by the Secretary of the Treasury for interest

payments, which is in effect on the day after the due date. This rate is published in the Federal

Register on or about January 1 and July 1.

c. Banking Information. Information needed for Electronic Fund Transfer (EFT), including

the vendor’s bank account number and the vendor’s financial institution’s routing number.

d. Contract. Any enforceable agreement, i ncluding rental and lease agreements, purchase

orders, service contracts, blanket purchase agreements, and other obligating documents, between a

vendor and the BOP.

e. Day. A calendar day, including weekends and holidays, unless otherwise indicated.

f. Designated Agency Office. The office designated in the contract to first receive and review

the invoice. This office ensures that the invoice is proper; it may be different from the office

issuing the payment.

g. Discount Date. The date the payment must be made to take a specified reduction or discount.

h. Due Date. The date on which a payment should be made.

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i. Electronic Fund Transfer (EFT). Any transfer of funds, other than a transaction originated

by cash, check, or similar paper instrument, that is initiated through an electronic terminal,

telephone, computer, or magnetic tape, for ordering, instructing, or authorizing a financial

institution to debit or credit an account.

j. Invoice. A bill, written document, or electronic transmission provided by the vendor

requesting payment for goods or services rendered.

k. Payment Date. The date placed on the check from Treasury, or the settlement date for EFT

payments.

l. Receipt of Invoice. For determining the start date and the date on whi ch interest begins to

accrue, an invoice is deemed to be received on the later of:

■ For invoices that are mailed, the date a proper invoice is actually received by the designated

agency office if the invoice is stamped or annotated with the date of receipt at the time of

receipt. For electronically transmitted invoices, the date a readable transmission is received

by the designated agency office, or the next business day if received after normal working

hours.

■ The seventh day after the date on which the property is actually delivered or the performance

of services is actually completed (unless actually accepted by the agency before the seventh

day or otherwise stated in the contract).

■ The date placed on the invoice by the vendor, if the agency fails to annotate or stamp the

invoice with the date of receipt at the time of receipt.

m. Receiving Report. Written or electronic evidence of acceptance of goods or services by a

Government official.

n. Settlement Date. The date an EFT payment is credited to the vendor’s financial institution.

o. Taxpayer Identification Number (TIN). The nine-digit Employer Identifying Number

(EIN) or the individual’s Social Security Number (SSN). This number must be included on all

vendor payment vouchers submitted to Treasury.

p. Utilities. Electricity, water, sewage, telephone services, and natural gas.

q. Vendor. Any person, organization, or business concern engaged in a business, including

state and local governments and foreign governments (but excluding Federal entities).

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3. REVIEWING DOCUMENTS

The three key documents that are needed, and must be reviewed, to make a payment are the

invoice, receiving report, and contract.

a. The Invoice. When reviewing invoices, follow the procedures below. Invoices received

must be date-stamped with the date the invoice was received in the designated agency office. The

contract is reviewed to determine the designated agency office. Review each invoice

immediately upon receipt to determine if it is a proper invoice.

(1) Proper Invoices. The following correct information comprises a proper invoice and is

required as payment documentation:

■ Name and address of the vendor or contractor and invoice date.

■ Contract number or other authorization for delivery of property or service.

■ Vendor invoice number, account number, or other number required by the contract.

■ Description, price, and quantity of property or services actually delivered or rendered.

■ Shipping and payment terms.

■ Bill of Lading number and weight, if applicable.

■ Other substantiating documentation or information required by the contract.

■ Name, title, and telephone number of official to be notified in the event of a defective invoice.

■ The TIN.

■ Banking information, unless EFT is waived under 31 CFR 208.4.

(2) Defective Invoices. If the designated agency office determines the invoice to be improper, it

is considered a defective invoice. The invoice must be returned to the vendor specifying why the

invoice is not proper and requiring the vendor to resubmit the invoice with the necessary

corrections. The designated agency office returns the invoice as soon as possible, but no later

than:

■ Three days for meat or meat food products and fresh or frozen fish and seafood.

■ Five days for perishable agricultural commodities, dairy products, and food products prepared

from edible fats and oils.

■ Seven days for all other categories after receipt of the invoice.

The date of return is the date the defective invoice is mailed back to the vendor.

If the defective invoice is returned to the vendor within the specified time frame, the paying office

has the original number of days to make payment, as established in the payment terms, from the

receipt of the corrected invoice. The resubmitted invoice must be clearly annota ted as corrected.

If the defective invoice is not returned to the vendor within the specified time frame, the number of

days available to make a timely payment upon receipt of the corrected invoice is reduced by the

number of days late in notifying the vendor of the defective invoice.

Example 1: Pandora’s Boxes, Inc.

Defective Invoice Received: August 5

Invoice Returned to Vendor: August 20

Payment Terms: 30 days

When the corrected invoice is resubmitted by the vendor, the number of days available to make the

payment without incurring an interest penalty is 22 days. The defective invoice was returned 15

days after receipt  eight days in excess of the allowable seven. The payment terms, 30 days, are

reduced by the number of late days, eight, to arrive at the new payment terms of 22 days.

Example 2: Paul’s Peppers

Defective Invoice Received: November 3

Invoice Returned to Vendor: November 12

Payment Terms: 10 days

When the corrected invoice is resubmitted by the vendor, the number of days available to make the

payment without incurring an interest penalty is six days. Since the allowable time to return a

defective invoice for agricultural products is five days, the invoice was returned four days late.

The payment terms, 10 days, are reduced by the number of late days, four, to arrive at the new

payment terms of six days.

b. The Receiving Report. Payment cannot be made before the Government receives and

accepts the goods or services, even if an early payment discount may be lost.

(1) Proper Receiving Report. A proper Receiving Report contains:

■ Name of vendor.

■ Contract or other authorization number.

■ Product or service description.

■ Quantities received.

■ Date goods were delivered or services were provided.

■ Date goods or services were accepted.

■ Signature and printed name of the receiving official.

(2) Timely Acceptance. To determine the start of the payment period, acceptance of goods or

services must take place within seven days following their receipt, unless other terms are included

in the contract. If the person completing the receiving report uses an acceptance date in excess of

seven days following receipt of the goods or services and the contract does not specify a longer

acceptance period, the acceptance date to use in determining payment date is the seventh day after

receipt.

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Example: An invoice was received and date-stamped on November 5. The receiving report

states the goods were received on October 30 and accepted on November 9. It took 10 days to

accept the goods; therefore, the date determining the acceptance date is November 6 (October 30

plus seven days).

c. The Contract. The following information from the contract is required as payment

documentation:

■ Payment terms.

■ A notation that a partial payment is prohibited as stated in the contract, if applicable.

■ For construction contracts, due dates for approved progress payments or milestone payments

for completed phases, increments, or segments of a project.

■ If applicable, a statement that the special payment provisions of the Packers and Stockyard Act

of 1921 (7 United States Code [USC]182(3)) or the Perishable Agricultural Commodities Act

of 1930 (7 USC 499a(4)) or the Fish and Seafood Promotion Act of 1986 (16 USC 4003(3))

apply.

■ Name, title, telephone number, and complete mailing address of the officials of the

Government’s designated agency office and the vendor receiving the payments.

■ Reference to requirements under the Prompt Payment Act, including the payment of interest

penalties on late invoice payments, and including progress payments under construction

contracts.

■ Reference to the requirements under the Debt Collection Improvement Act of 1996, including

the requirement that payments must be made electronically except where the EFT requirement

is waived under 31 CFR 208.4.