COR COR Invoice Review & Payment Processing 2 — Questions and Answers
Question 1: What type of billing is used on cost-reimbursement contracts where contractors bill as costs are incurred?
- Fixed-price progress payments
- Milestone billing
- Cost vouchers (Correct answer)
- Time-and-materials invoices
Correct answer: Cost vouchers
Cost vouchers are the invoicing mechanism used on cost-reimbursement contracts to bill the government as allowable costs are incurred.
Question 2: The COR discovers a contractor has overbilled for labor hours on the most recent invoice. What is the COR's first action?
- Approve the invoice to avoid delays
- Contact DCAA directly to audit the contractor
- Document the discrepancy and notify the Contracting Officer (Correct answer)
- Unilaterally withhold payment
Correct answer: Document the discrepancy and notify the Contracting Officer
The COR must document the overbilling discrepancy in writing and immediately notify the Contracting Officer, who has authority to reject or adjust the invoice.
Question 3: What interest rate applies when the government fails to pay a proper invoice on time under the Prompt Payment Act?
- Prime lending rate
- Federal Funds rate
- Renegotiation Board interest rate
- Treasury's Current Value of Funds Rate (Correct answer)
Correct answer: Treasury's Current Value of Funds Rate
Late payments under the Prompt Payment Act accrue interest at the Treasury's Current Value of Funds Rate, published quarterly.
Question 4: Progress payments on fixed-price contracts are typically based on what?
- Contractor's projected profit margin
- Costs incurred by the contractor to date (Correct answer)
- Completion of predefined milestones
- Subcontractor invoices submitted
Correct answer: Costs incurred by the contractor to date
Progress payments on fixed-price contracts are generally based on costs the contractor has incurred performing the contract.
Question 5: Which FAR clause governs payment terms for fixed-price contracts?
- FAR 52.232-1 (Correct answer)
- FAR 52.215-10
- FAR 52.222-26
- FAR 52.203-13
Correct answer: FAR 52.232-1
FAR 52.232-1, Payments, establishes the standard payment terms applicable to fixed-price supply and service contracts.
Question 6: A contractor submits an invoice with the correct dollar amount but uses the wrong contract line item number (CLIN). This invoice is:
- Acceptable because the amounts match
- An improper invoice that must be returned for correction (Correct answer)
- Grounds for contract termination
- A violation requiring debarment proceedings
Correct answer: An improper invoice that must be returned for correction
An incorrect CLIN makes an invoice improper; all required data elements including CLINs must be accurate before the government is obligated to pay.
COR COR Invoice Review & Payment Processing 2
What type of billing is used on cost-reimbursement contracts where contractors bill as costs are incurred?