Attachment 9- HARCD Section H - Special Clauses.pdf

SECTION H

SPECIAL CONTRACT REQUIREMENTS

C-23 POTENTIAL FOR PROMPT PAYMENTS ON CERTAIN CUSTOMER DIRECT

CONTRACTS

(1) This solicitation may result in an award for items that will ship from the contractor’s location directly to a DLAs customer(s), thereby qualifying for the DLA Prompt Pay Program.

The DLA Prompt Payment Program allows for payment to the contractor to be facilitated via a two-way match process; contractor’s submission of a proper invoice on a DLA award. Payment to the contractor will not be contingent upon the receipt of a receiving report.

By submitting an offer, the contractor acknowledges that DLA contracting officers will evaluate and consider the following data when determining the contractor’s acceptance into the Program:

(a) Contractor’s Supplier Performance Risk System (SPRS) scores, reference DFARS 252.204-7024, Notice on the Use of Supplier Performance Risk System and,

(b) Historical records, if available, through DLA Finance and/or Defense Finance and Accounting Service (DFAS) of accurate and timely invoice submissions.

(2) If the contractor is approved for the Prompt Pay Program, the contractor will be required to utilize DLAs Vendor Shipment Module (VSM).

(a) For awards that are issued with free-on-board (FOB) terms of ‘Destination’, contractors will be required to provide the Standard Carrier Alpha Code (SCAC) and the corresponding carrier tracking number for all shipments through the online webpage when processing a shipment or via the Webservice Application Programming Interface (API) connection. Note: As of June 1, 2025, DLA is currently in the process of programming the SCAC and tracking number data fields. Contractors will not be required to provide the SCAC and tracking number until programming efforts have been completed.

(b) Awards issued with FOB terms of Origin,

a. Do not require that the contractor provide the SCAC or carrier tracking number since DLA arranges the carrier.

b. Before contacting the Government to advise that material is ready to ship, the contractor shall complete its VSM profile, to include regular business hours and observed holidays. The Government may request reimbursement for occurrences when the Government sends carrier equipment but is unable to pick-up a shipment because the material was unavailable or the contractor facility was closed.

(c) VSM is a web-based system for DLA contractors to obtain current shipping addresses, two-dimensional bar coded shipping labels in accordance with MIL-STD-129, bills of lading, packing lists, and other shipping documentation. Contractors using VSM do not need to contact the transportation office prior to shipping items. Contractors shall use VSM to print labels for f.o.b. destination contracts; and to print labels and arrange for shipping for f.o.b.

origin contracts. All contractors will use VSM to obtain shipping labels no more than two (2) days prior to shipment to ensure the current destination address is used.

(d) To obtain information for contracts administered by DLA or to register as a VSM user, the contractor shall contact the DLA VSM Helpdesk at (800) 456-5507 or via email to delivery@dla.mil.

(3) Contractors must agree that for any shipment(s) made during contract performance that fail to be received by the DLA customer, the contractor shall provide proof of delivery and receipt or replace the entire shipment at no charge.

H-900 PRICING AND PAYMENT

Material: Material priced at time of award of the contract represents the fixed commodity price for a twelve-month period. Those prices will be adjusted annually throughout the life of the contract in accordance with Economic Price Adjustments (EPA) pursuant to Procurement Note C09, Economic Price Adjustment (EPA) – Department of Labor Index and Note L24, Economic Price Adjustment (EPA) – Established Prices. The EPA will only apply to material. The bases to be used for the adjustment to each Federal Supply Class (FSC) are as follows:

FSC: Bureau of Labor Statistics (BLS) Category

Series ID FSC Series Title PCU326130326130 5325 Laminated plastics plate, sheet (except packaging), and shape manufacturing PCU332119332119 5355, 5365 Other metal stamping, except automotive PCU332510332510 5340, 5342 Hardware manufacturing PCU332613332613 5360 Spring manufacturing PCU332618332618 5315, 5335 Other fabricated wire product manufacturing

PCU336310336310 5331 Motor vehicle gasoline engine and engine parts manufacturing

PCU332722332722 5305, 5306,

5307, 5310, Bolt, nut, screw, rivet, and washer manufacturing

EPA Calculation Time Frame: Thirty (30) days prior to the end of each annual performance period, the EPA calculation process shall commence to determine the percentage of change that shall be utilized to change pricing for the next performance period. The same process shall continue every annual performance period throughout the life of the contract.

In the event that the end of a performance period falls on a weekend, or if a catastrophic event causes no index to be posted, the Government shall utilize the last day an index price was posted.

Contractual Price Change Time Frame: Within fourteen (14) working days after the start of each annual performance period, the Government shall amend the contract prices via a Government-issued, unilateral modification. The new contract prices shall be in effect for delivery orders issued in the 12-month period following the date of the modification.

H-901 PRICING OF ITEMS ADDED TO THE CONTRACT

The Government will notify the contractor at the time an item is contemplated to be added to this mailto:delivery@dla.mil contract. The contractor shall provide a proposal for the item(s) within 30 days of notification from the contracting officer. For emergency adds, the proposal will be due within five days of notification from the contracting officer. The negotiated price will be in effect for the remaining life of the contract and will be included in all future EPA adjustments.

H-18 PROMPT PAYMENT

Notwithstanding any other payment clause in this contract, the Government will make invoice payments under the terms and conditions specified in this procurement note. The Government considers payment as being made on the day a check is dated or the date of an electronic funds transfer (EFT). Definitions of pertinent terms are set forth in sections 2.101, 32.001, and 32.902 of the Federal Acquisition Regulation. All days referred to in this procurement note are calendar days, unless otherwise specified. (However, see paragraph (a)(5) of this procurement note concerning payments due on Saturdays, Sundays, and legal holidays.)

(a) Invoice payments-

(1) Due date.

(i) Except as indicated in paragraphs (a)(2) of this procurement note, the due date for making invoice payments by the designated payment office is the later of the following two events:

(A) The 30th day after the designated billing office receives a proper invoice from the Contractor (except as provided in paragraph (a)(1)(ii) of this procurement note). If the designated billing office fails to annotate the invoice with the date of receipt at the time of receipt, the invoice payment due date shall be the 30th day after the date of the Contractor's invoice; provided the Contractor submitted a proper invoice and no disagreement exists over quantity, quality, or Contractor compliance with contract requirements.

(B) The 30th day after Government acceptance of supplies delivered or services performed.

(ii) On a final invoice, when the payment amount is subject to contract settlement actions, acceptance is deemed to occur on the effective date of the contract settlement.

(2) Responsibility for Supplies.

(i) Notwithstanding any other provision of the contract, order or blanket purchase order agreement, the Contractor shall –

(A) Assume all responsibility and risk of loss for supplies not received at destination, damaged in transit, or not conforming to the purchase requirements; and

(B) Replace, repair or correct those supplies promptly at the Contractor’s expense, if instructed to do so by the Contracting Officer within 180 days from the date title the supplies vests in the Government.

(3) Certain food products and other payments.

(i) Due dates on Contractor invoices for meat, meat food products, or fish; perishable agricultural commodities; and dairy products, edible fats or oils, and food products prepared from edible fats or oils are-https://www.acquisition.gov/far/part-2#FAR_2_101 https://www.acquisition.gov/far/part-32#FAR_32_001 https://www.acquisition.gov/far/part-32#FAR_32_902

(A) For meat or meat food products, as defined in section 2(a)(3) of the Packers and Stockyard Act of 1921 ( 7 U.S.C.182(3)), and as further defined in Pub.L.98-181, including any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product, as close as possible to, but not later than, the 7th day after product delivery.

(B) For fresh or frozen fish, as defined in section 204(3) of the Fish and Seafood Promotion Act of 1986 ( 16 U.S.C.4003(3)), as close as possible to, but not later than, the 7th day after product delivery.

(C) For perishable agricultural commodities, as defined in section 1(4) of the Perishable Agricultural Commodities Act of1930 ( 7 U.S.C.499a(4)), as close as possible to, but not later than, the 10th day after product delivery, unless another date is specified in the contract.

(D) For dairy products, as defined in section 111(e) of the Dairy Production Stabilization Act of1983 ( 7 U.S.C.4502(e)), edible fats or oils, and food products prepared from edible fats or oils, as close as possible to, but not later than, the 10 th day after the date on which a proper invoice has been received.

Liquid milk, cheese, certain processed cheese products, butter, yogurt, ice cream, mayonnaise, salad dressings, and other similar products, fall within this classification. Nothing in the Act limits this classification to refrigerated products. When questions arise regarding the proper classification of a specific product, prevailing industry practices will be followed in specifying a contract payment due date. The burden of proof that a classification of a specific product is, in fact, prevailing industry practice is upon the Contractor making the representation.

(ii) If the contract does not require submission of an invoice for payment (e.g., periodic lease payments), the due date will be as specified in the contract.

(4) Contractor's invoice. The Contractor shall prepare and submit invoices to the designated billing office specified in the contract. A proper invoice must include the items listed in paragraphs (a)(3)(i) through (a)(3)(x) of this procurement note. If the invoice does not comply with these requirements, the designated billing office will return it within 7 days after receipt (3 days for meat, meat food products, or fish; 5 days for perishable agricultural commodities, dairy products, edible fats or oils, and food products prepared from edible fats or oils), with the reasons why it is not a proper invoice. The Government will take into account untimely notification when computing any interest penalty owed the Contractor.

(i) Name and address of the Contractor.

(ii) Invoice date and invoice number. (The Contractor should date invoices as close as possible to the date of the mailing or transmission.)

(iii) Contract number or other authorization for supplies delivered or services performed (including order number and line item number).

(iv) Description, quantity, unit of measure, unit price, and extended price of supplies delivered or services performed.

(v) Shipping and payment terms (e.g., shipment number and date of shipment, discount for prompt payment terms).

(vi) Bill of lading number (commercial or Government) and weight of shipment will be shown for shipments on Government bills of lading.

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(vi) Name and address of Contractor official to whom payment is to be sent (must be the same as that in the contract or in a proper notice of assignment).

(vii) Name (where practicable), title, phone number, and mailing address of person to notify in the event of a defective invoice.

(viii) Taxpayer Identification Number (TIN). The Contractor shall include its TIN on the invoice only if required elsewhere in this contract.

(ix) Electronic funds transfer (EFT) banking information.

(A) The Contractor shall include EFT banking information on the invoice only if required elsewhere in this contract.

(B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a proper invoice, the Contractor shall have submitted correct EFT banking information in accordance with the applicable solicitation provision (e.g., 52.232-38, Submission of Electronic Funds Transfer Information with Offer), contract clause (e.g., 52.232-33, Payment by Electronic Funds Transfer- System for Award Management, or 52.232-34, Payment by Electronic Funds Transfer-Other Than System for Award Management), or applicable agency procedures.

(C) EFT banking information is not required if the Government waived the requirement to pay by EFT.

(x) Any other information or documentation required by the contract (e.g., evidence of shipment).

(5) Interest penalty. The designated payment office will pay an interest penalty automatically, without request from the Contractor, if payment is not made by the due date and the conditions listed in paragraphs (a)(4)(i) through (a)(4)(iii) of this procurement note are met, if applicable. However, when the due date falls on a Saturday, Sunday, or legal holiday, the designated payment office may make payment on the following working day without incurring a late payment interest penalty.

(i) The designated billing office received a proper invoice.

(ii) The Government processed a receiving report or other Government documentation authorizing payment, and there was no disagreement over quantity, quality, or Contractor compliance with any contract term or condition.

(iii) In the case of a final invoice for any balance of funds due the Contractor for supplies delivered or services performed, the amount was not subject to further contract settlement actions between the Government and the Contractor.

(6) Computing penalty amount. The Government will compute the interest penalty in accordance with the Office of Management and Budget prompt payment regulations at 5 CFR Part 1315.

(i) For the sole purpose of computing an interest penalty that might be due the Contractor, Government acceptance is deemed to occur constructively on the 7th day (unless otherwise specified in this contract) after the Contractor delivers the supplies or performs the services in accordance with the terms and conditions of the contract, unless there is a disagreement over quantity, quality, or Contractor compliance with a contract provision. If actual acceptance occurs within the constructive acceptance period, the Government will base the determination of an interest penalty on the actual date of acceptance. The constructive acceptance requirement does not, however, compel Government officials https://www.acquisition.gov/far/part-52#FAR_52_232_38 https://www.acquisition.gov/far/part-52#FAR_52_232_33 https://www.acquisition.gov/far/part-52#FAR_52_232_34 to accept supplies or services, perform contract administration functions, or make payment prior to fulfilling their responsibilities.

(ii) The prompt payment regulations at 5 CFR1315.10(c) do not require the Government to pay interest penalties if payment delays are due to disagreement between the Government and the Contractor over the payment amount or other issues involving contract compliance, or on amounts temporarily withheld or retained in accordance with the terms of the contract. The Government and the Contractor shall resolve claims involving disputes and any interest that may be payable in accordance with the clause at FAR 52.233-1, Disputes.

(7) Discounts for prompt payment. The designated payment office will pay an interest penalty automatically, without request from the Contractor, if the Government takes a discount for prompt payment improperly. The Government will calculate the interest penalty in accordance with the prompt payment regulations at 5 CFR Part 1315.

(8) Additional interest penalty.

(i) The designated payment office will pay a penalty amount, calculated in accordance with the prompt payment regulations at 5 CFR Part 1315 in addition to the interest penalty amount only if-

(A) The Government owes an interest penalty of $1 or more;

(B) The designated payment office does not pay the interest penalty within 10 days after the date the invoice amount is paid; and

(C) The Contractor makes a written demand to the designated payment office for additional penalty payment, in accordance with paragraph (a)(7)(ii) of this procurement note, postmarked not later than 40 days after the invoice amount is paid.

(ii)

(A) The Contractor shall support written demands for additional penalty payments with the following data. The Government will not request any additional data. The Contractor shall-

(1) Specifically assert that late payment interest is due under a specific invoice, and request payment of all overdue late payment interest penalty and such additional penalty as may be required;

(2) Attach a copy of the invoice on which the unpaid late payment interest is due; and

(3) State that payment of the principal has been received, including the date of receipt.

(B) If there is no postmark or the postmark is illegible-

(1) The designated payment office that receives the demand will annotate it with the date of receipt, provided the demand is received on or before the 40th day after payment was made; or

(2) If the designated payment office fails to make the required annotation, the Government will determine the demand’s validity based on the date the Contractor has placed on the demand, provided such date is no later than the 40th day after payment was made.

(iii) The additional penalty does not apply to payments regulated by other Government regulations (e.g., payments under utility contracts subject to tariffs and regulation).

(d) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice https://www.acquisition.gov/far/part-52#FAR_52_233_1 payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall-

(1) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the-

(i) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);

(ii) Affected contract number and delivery order number if applicable;

(iii) Affected line item or subline item, if applicable; and

(iv) Contractor point of contact.

(2) Provide a copy of the remittance and supporting documentation to the Contracting

Officer. (End)