MILLER ON PROCUREMENT.**ADVANCED PAYMENTS** In the commercial market place it is not at all unusual for a company to require prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. for goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . This is particularly true when dealing with software/hardware maintenance where there is an annual fee that is paid up front. When dealing with the government, advanced payments, in general are prohibited by 31 U.S.C. 3324. This statute reads as follows: "(a) Except as provided in this section, a payment under a contract to provide a service or deliver an article for the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Government may not be more than the value of the service already provided or the article already delivered. "(b) An advance of public money may be made only if it is authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by - "(1) a specific appropriation or other law..." The primary purpose of the statute is to protect the government from the risk of non-performance. Although as stated above there are some exception, such as prepayment for training, magazine and newspaper subscriptions, grants, partial payments and progress payments, even these exceptions are limited. We often get questions from clients where and agency was prepaying for a service such as software maintenance and then a new CO comes on board and refuses to prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. . There is nothing you can really do about the situation, if you get an agency to pay upfront, more power to you, but if someone gets wind of it and stops the practice you don't have a contractual leg to stand on. I remember years ago when software vendors use to call their prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay ment n. maintenance a software subscription since subscriptions to magazines and newspapers could be prepaid. It may even still be done to some extent but a smart agency isn't going to buy into it.
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion