1.) When Fixed Fee Payment Schedule and PGI Payment Instructions conflict, what takes precedence?
2.) When it is realized the Contractor is submitting Vouchers in accordance with the Fixed Fee Schedule, but NOT with the PGI Payment Instructions, what actions should be taken?
3.) When a Contractor submits Vouchers in accordance with the PGI Payment Instructions, but NOT the stated Fixed Fee Schedule, what actions should be taken?
4.) When DFAS pays Fixed Fee Voucher Billings in accordance with the Fixed Fee Schedule, but NOT with the PGI Payment Instructions, what actions should be taken?
5.) When DFAS pays Fixed Fee Voucher Billings in accordance with the PGI Payment Instructions, but NOT the stated Fixed Fee Schedule, what actions should be taken?
FAR 52.216-8 Fixed Fee states in paragraph (b) that payment of the fixed fee shall be made as specified in the contract schedule. In accordance with DFARS 204.7108 Payment Instructions, follow the procedures at DFARS PGI 204.7108 for inclusion of payment instructions in contracts. DFARS PGI 204.7108 applies to contracts and orders that are funded by multiple accounting classification citations and contain cost-reimbursement or time-and-materials/labor-hour line items. This appears to be your situation as you've described it in the background information. According to paragraph (b), for contracts and orders covered by DFARS PGI 204.7108, the contracting officer shall insert the table at (b)(2), or a link to the table at (b)(2) https://www.acq.osd.mil/dpap/dars/pgi/pgi_htm/current/PGI204_71.htm#payment_instructions) in Section G of the contract, or equivalent, including contracts with incrementally funded line items. Paragraph (d)(12) states if none of the payment instructions identified in paragraph (b)(2) of this section are appropriate (i.e., multiple lot progress payments), the contracting officer may insert other payment instructions, provided the other payment instructions provide a significantly better reflection of how funds will be expended in support of contract performance, and are agreed to by the payment office and the contract administration office. A copy of the agreement will be kept in the contract file.
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Bottom line: Due to the discrepancy between PGI 002 and the fixed fee payment schedule in the order, the payment instructions should probably be revised in the contract and/or order; DFARS 204.7108 permits revisions to the payment instructions in order to address the impact of changes to contract funding or significant disparities between existing instructions and actual contract performance. Furthermore, in accordance with DFARS 204.7108, the payment instructions can be changed prospectively so long as the CAO and the payment office (DFAS) reach agreement on appropriate payment instructions to incorporate in the contract or order via a contract modification. In order to submit their cost vouchers, the contractor should follow the revised payment instructions as changed in the contract and/or order.
For further guidance, I highly recommend that you contact your contracting officer and associated DFAS pay office and communicate with them regarding the specifics of this contract and how the payments need to be distributed to the appropriate ACRNs.