FAR 13.403—Preparation and execution of orders.
Plain-English Summary
FAR 13.403 addresses the required contents of orders, purchase orders, and blanket purchase agreements when the fast payment procedure is used. It covers three specific subjects: the requirement that supplies be shipped transportation or postage prepaid, the requirement for where invoices must be sent, and the required consignee notification language for nonreceipt, damage, or nonconformance. The purpose is to speed payment while still protecting the Government by ensuring the seller pays shipping costs up front, invoices go to the right office for prompt processing, and receiving activities report problems quickly. In practice, this section helps contracting personnel build orders that support fast payment without losing control over delivery, acceptance, and dispute reporting. It also creates a clear timeline for the consignee to notify the purchasing office, which is important for resolving shortages, transit damage, and quality issues before records and payments become stale.
Key Rules
Prepaid shipping required
Orders, purchase orders, and BPAs using the fast payment procedure must require that supplies be shipped transportation or postage prepaid. This shifts shipping cost responsibility to the seller and supports the simplified payment process.
Invoice destination specified
The order must direct invoices to the finance office or other designated office named in the order. For unpriced purchase orders, invoices must be submitted to the contracting officer, as referenced in FAR 13.302-2(c).
Consignee notice language included
The consignee’s copy must include a specific notification statement telling the consignee to promptly report nonreceipt, transit damage, or nonconformance to the purchasing office after the specified delivery date.
Sixty-day reporting expectation
Unless extenuating circumstances exist, the consignee should make the notification no later than 60 days after the specified delivery date. This creates a practical outer limit for reporting problems under the fast payment process.
Responsibilities
Contracting Officer
Ensure the order, purchase order, or BPA includes the required prepaid shipping language, the correct invoice submission instructions, and the consignee notification statement. For unpriced purchase orders, direct invoices to the contracting officer and make sure the fast payment procedure is properly structured.
Finance or Designated Receiving/Payment Office
Receive invoices when the order directs them to that office and process them under the fast payment procedure. The office must be prepared to handle invoices quickly and coordinate with the purchasing activity if issues arise.
Consignee
Inspect or monitor receipt of supplies and promptly notify the purchasing office if supplies are not received, are damaged in transit, or do not conform to the purchase order. The consignee should normally report these issues within 60 days after the specified delivery date unless extenuating circumstances exist.
Contractor/Supplier
Ship supplies transportation or postage prepaid as required by the order and submit invoices to the office identified in the order. The contractor must also understand that fast payment does not eliminate responsibility for delivery, damage, or nonconformance issues.
Purchasing Office
Receive consignee notifications, investigate reported nonreceipt, damage, or nonconformance, and take appropriate action to resolve payment or contract performance issues. The office must use the notice to protect the Government’s interests and correct records.
Practical Implications
This section matters because fast payment depends on clean paperwork and quick reporting; if the order does not contain the required language, the process can break down or create payment disputes.
A common pitfall is sending invoices to the wrong office, especially when the order does not clearly identify the finance or designated office or when an unpriced purchase order is involved.
Another frequent issue is delayed consignee reporting. If damage, shortages, or nonconformance are not reported promptly, it becomes harder to support a claim, recover funds, or resolve the issue with the contractor.
Contracting officers should make sure the consignee copy contains the exact notification statement, since missing or altered language can undermine the fast payment controls.
Contractors should watch for the prepaid shipping requirement and invoice routing instructions, because noncompliance can delay payment even when the supplies are otherwise acceptable.
Official Regulatory Text
Priced or unpriced contracts, purchase orders, or BPAs using the fast payment procedure shall include the following: (a) A requirement that the supplies be shipped transportation or postage prepaid. (b) A requirement that invoices be submitted directly to the finance or other office designated in the order, or in the case of unpriced purchase orders, to the contracting officer (see 13.302-2 (c)). (c) The following statement on the consignee’s copy: Consignee’s Notification to Purchasing Activity of Nonreceipt, Damage, or Nonconformance The consignee shall notify the purchasing office promptly after the specified date of delivery of supplies not received, damaged in transit, or not conforming to specifications of the purchase order. Unless extenuating circumstances exist, the notification should be made not later than 60 days after the specified date of delivery.