As much we all love Rihanna, it’s a real shame how many contractors have called me in the last few days with issues that remind me of her well-known “Pay Me What You Owe Me” lyrics. They’re brought to mind because contractors are – on an increasing basis – being denied payment on properly invoiced sums. In some cases, contractors have even been expressly advised by agency officials that they will not be paid at all for the foreseeable future. “Don’t submit any future invoices until you hear from us” is becoming a shockingly common refrain. And yet, the work being invoiced was properly performed. There is no allegation of delayed or deficient performance. Indeed, the amounts due are undisputedly owing to the contractor. So what is going on?!?

This spreading non-payment trend would appear to be due at least in part to the Implementing the President’s “Department of Government Efficiency” Cost Efficiency Initiative Executive Order, which was issued February 26, and which I wrote about here.

As predicted, certain agencies are taking the position, consistent with the EO, that no payments can be made to contractors until the agency sets up and gets running a new “centralized technological system,” meant to track and justify payments. In the meantime, contractors have been directed to continue to perform and absorb the costs. In other words, the government’s basically directing contractors to “throw it on my tab.” This is simply an untenable situation for contractors to be in, and it is particularly harmful for small businesses.

If you are facing this situation, consider the following:

First – check your contract, and review the clauses relating to payment. Confirm the invoicing requirements, and make sure that your invoices meet all applicable requirements. This will likely be governed by the FAR Part 39, as well as the Prompt Payment Act and its implementing regulations; these laws cumulatively provide guidance on what constitutes a “proper invoice,” and require the government to accelerate payments to small businesses. Check your applicable deadlines, make sure you are submitting your invoices in the correct way and through the correct systems, and familiarize yourself with the provisions relating to payment disputes.

Next, reach out to the agency, nicely, to see if you can determine what is going on. It is possible, even in the current climate, that the delay in payment is nothing more than an administrative error that can be easily resolved. If that is not the case, hopefully you can at least get some additional information about the reason the agency is withholding payment. If it is due to the February 26 EO referenced above, perhaps the CO can offer you some insight into the expected timeframe in which the agency expects to complete its “centralized technological system” and resume payments.

Finally, you have the right to submit a formal claim under the CDA. Like in any other CDA claim, you should lay out in detail the relevant facts and law, and demonstrate your entitlement to the monies owed. If there is no dispute as to the fact that the work being invoiced for was successfully completed, and it is simply a matter of non-payment due to EOs or other DOGE initiatives, this should be a comparatively easy lift as compared to other types of claims. Indeed, the government’s failure to pay monies that are undisputedly due and owing is generally considered a breach of contract. Still, you will want to make sure you submit all appropriate supporting documentation showing that you are entitled to payment, and the amount of such payment. Don’t forget to certify your claim. 

The contracting officer should issue its response – called a “Contracting Officer’s Final Decision” or “COFD” – in sixty days. (Technically, the government could, rather than issue a COFD within sixty days, state that it needs more time to consider the claim. In such a case, the agency still must issue a response in a “reasonable time.” In these extenuating circumstances, and given the relative simplicity of the issues in a claim for non-payment of sums undisputedly due and owing, I think sixty days would be considered reasonable.) Should the COFD deny your claim in whole or in part, or should the agency fail to issue a COFD within a reasonable time, you can appeal that denial to the CBCA/ASBCA or COFC, and litigate. Keep in mind that you would almost certainly be entitled to interest under the CDA and possibly also the Prompt Payment Act, to the extent it is ultimately determined that the government breached its obligation to timely pay amounts due and owing under a “proper invoice” for work performed.

All that to say, if you aren’t getting paid, it’s time to act. As RiRi would say, you call the shots (shots, shots); agencies need to pay you what they owe you, not act like they forgot. (And, you know, the rest of the lyrics, too. IYKYK.) In other words: Get those claims in and get your money!