FAR 51.105—Payment for shipments.
Plain-English Summary
FAR 51.105 addresses how payment works when a contractor receives supplies ordered from Government stock under the Government property/furnishing system. It covers three core topics: when GSA, DoD, and VA may forward bills to contractors, what event establishes the contractor’s liability for the billed amount, and the contracting officer’s role in directing prompt payment. The rule is designed to align billing with shipment, so contractors are not charged before the supplies have actually been shipped. In practice, this means the contractor’s obligation to pay arises upon receipt of the billing, and the billing itself is treated as sufficient evidence of liability and a basis for payment. The section is short, but it is important because it sets the timing and evidentiary standard for payment disputes involving Government-stock shipments and helps agencies and contractors avoid premature billing or delayed payment.
Key Rules
Bill only after shipment
For GSA, DoD, and VA, bills for supplies ordered from Government stock are not forwarded to contractors until after the supplies have been shipped. This ties the billing cycle to actual shipment rather than to order placement or internal processing.
Billing establishes liability
Receipt of the billing is sufficient evidence to establish the contractor’s liability for the amount billed. The agency does not need additional proof before treating the contractor as responsible for payment.
Billing supports payment
The billing itself provides a basis for payment, meaning it is the operative document for collection and payment processing once it is received by the contractor.
Prompt payment expected
Contracting officers should direct contractors to pay promptly upon receipt of billings. The rule emphasizes timely payment and discourages unnecessary delay after the bill is received.
Responsibilities
GSA, DoD, and VA
Forward bills to contractors only after the supplies have been shipped from Government stock.
Contracting Officer
Direct contractors to make payment promptly when billings are received and ensure contractors understand the payment timing requirement.
Contractor
Pay the billed amount promptly upon receipt of the billing and treat the billing as the basis for liability and payment.
Practical Implications
Contractors should expect billing only after shipment, so an invoice received before shipment may indicate an error that should be checked immediately.
Once the bill is received, the contractor generally cannot argue that additional proof is needed before payment; the billing itself is enough to establish liability under this section.
Contracting officers should communicate the prompt-payment expectation clearly to avoid late payments and collection issues.
Agencies should coordinate shipment and billing records carefully, because mismatches can create disputes over whether the bill was properly issued.
This section is narrow but important in practice because it reduces ambiguity about when payment is due for Government-stock supplies and helps keep the billing process tied to actual delivery activity.
Official Regulatory Text
GSA, DoD, and VA will not forward bills to contractors for supplies ordered from Government stock until after the supplies have been shipped. Receipt of billing is sufficient evidence to establish contractor liability and to provide a basis for payment. Contracting officers should direct their contractors to make payment promptly upon receipt of billings.