How does the government pay for what it buys?

One of the benefits of working with the Federal government is that if the contractor provides the goods and/or services and set forth in the contract, and submits the proper documentation as required, the government will pay promptly.

The Federal government pays its contractors electronically. The method is defined by the contract. The trend is to continue to decrease the volume of paperwork involved in processing acceptance / payment and continue to increase the use of web based applications and processes. As in the commercial sector, this results in substantial cost savings.

Three basic methods are currently being used:

Electronic Funds Transfer (EFT) – Electronic payment is made to the bank account identified in the System for Award Management (SAM).  There is no cost to register in SAM.

Purchase Card – Payment is made through use of a government credit card. This type of payment is generally for micro purchases (under $10,000). Businesses that accept commercial cards can accept government purchase cards for payment. Businesses may want to consider if they are losing sales by not accepting Government purchase cards.

Wide Area Workflow – A Department of Defense secure web-based system for electronic invoicing, receipt, and acceptance. WAWF allows vendors to submit and track invoices and receipt/acceptance documents over the web and allows government personnel to process those invoices in a real-time, paperless environment. WAWF is now part of the Procurement Integrated Enterprise Environment (PIEE) suite.