MP5332.6 Contract Debts

(1)  Contracting officers shall retain a copy of all contract debt documentation in the contract file and shall keep the contract file open until the debt is collected and/or written-off.

(2)  When the contracting officer issues a demand for payment against a contract that is paid by one DFAS office and accounted for by another DFAS office (i.e., the "cognizant" DFAS Field Site), the contracting officer shall provide a copy of the demand to both offices.

(3)  Whenever a contracting officer renders a final decision that results in a contractor being contractually indebted to the Government, the contracting officer shall issue a demand letter to the contractor. Simultaneously, a copy of the final decision and demand for payment letter shall be forwarded to the contract administration office and the cognizant DFAS Field Site. (Note: It is imperative that contracting officers issue demand letters as soon as a contract debt is realized and not delay this action based on actions being taken or actions planned by the contractor to provide additional information or to appeal the contracting officer’s decision.) Contracting officers shall confirm the identity of the cognizant DFAS Field Site with the local Air Force Financial Management personnel prior to forwarding debt documentation for collection by the cognizant DFAS Field Site.

(4)  Contracting officers shall request the cognizant DFAS Field Site to confirm receipt of the demand letter and the posting of the debt to the accounts receivable records. Subsequently, contracting officers shall track the debt until collection and/or write-off by following-up every 90 to 180 days with the cognizant DFAS Field Site.

(5)  When a request for deferment of a contract debt is received from a contractor, the recipient office, except for those under AFMC, shall forward the request for deferment to the Chief of Contracting at the MAJCOM. The MAJCOM Contracting Staff shall submit, on a priority basis, an evaluation of the contractor’s request with the necessary reporting information and recommendation through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPS. AFMC actions shall be submitted directly to SAF/FMPS in accordance with AFMC procedures. (Failure to have all of the required documentation that supports the deferment package should not delay the processing of the request to SAF/FMPS.)

(6)  For payments made as a consequence of a contract debt arising from a default termination, advise contractors to make payments by check made payable to the “Treasury of the United States” and mailed to the Defense Finance and Accounting Service, DFAS-BKRD/CC, P.O. Box 955515, St. Louis, MO 63195-5515.

(7)  Ascertaining and collecting delinquent contract debts is the responsibility of the DoD Debt Management Office (DFAS-BKRD) at DFAS-CO.