Getting Paid On Government Contracts

When it comes to the federal government, the way in which you are paid and the frequency in which you are paid are all based on the contract.?

When you first register your business, or if you work for someone in the GovCon space, the business is registered in SAM.gov.?

You are asked to provide a bank account. That's why your MPIN (Marketing Partner Identification Number) is so important. If you ever need to change your bank account, you're going to need your MPIN.?

The federal government, for the most part, will pay you electronically, directly to the bank account connected to your CAGE code that's in SAM.gov. That's how you receive your accounts receivable.?

In order to receive money from the government, there are different things that you're going to need to do. My goal is to help you avoid any kind of potholes and ensure that you have strong cash flow and can receive your money as quickly as possible.

IPP System

The first system is IPP (Invoice Processing Platform). This is a system that the USDA and a variety of federal agencies tend to use. When you log into this system, you're going to type in the information connected to your contract.?

Typically, these are contracts that could be one-off trainings, or it could be a multi-year effort where you're paid, let's say 30,000 or a million dollars a month for the services you're providing. It could be that perhaps you sold a product to a federal agency and they've instructed you to use the IPP system.

In order to gain access to this system, you will need to register. Is this something you need to do today? No, not at all. It's all based on the requirements in the contract. It doesn't make any sense to go ahead and register for any of these systems until you need to. Your time and energy should be focused on finding, bidding and winning federal government contracts.

Inside this system, you enter the key information and upload an invoice. What's important in terms of the federal government and invoicing is:

1. You're going to use the system that they indicate you use
2. You're going to need to confirm with your client how you intend to set up the invoice

Simply let them know, “Hey, I want to let you know based on the contract, I have line item one. That's what we're going to have in the invoice. Is there any kind of attachments or anything you want me to include with the invoice? Would you like to see a draft copy? Would you like for me to email you a copy and/or to notify you when we submit this into the IPP system?”

This is not a magical system where you upload an invoice and bam, you're paid within 15 days. Now, can you be paid or receive payment within 15 business days? Of course. The Department of Transportation paid my flagship company within 24 hours, yes, it's possible.?

But remember, if someone's on vacation, someone only works Monday to Thursday, and you submit an invoice and they're not there to process it, or they're not even made aware that you submitted the invoice, your funds will be held up.

So what we like to do and what I harp on is communication out the gate. Especially with IPP, you communicate with the client and let them know, “Hey, you know, I use QuickBooks Online, I use whatever accounting system. I'm going to create an invoice, I'd like to give you a copy, I'd like to email you, I'll notify you when I update or upload to the system. Anything else you want me to do? How else can I make your life easier?” That way, you're in this nice rhythm and you can predict your cash flow.

The other nice thing about this IPP system is that you can add other users. One drawback is, if you submit an invoice and it's wrong, you're going to have to notify the Corps because they're the only ones who can remove it. So you want to make sure you double check things. If you can avoid it, it's best to cut and paste rather than key in information. Because the last thing your core wants to do is to delete an invoice because you made a mistake.

PIEE System

Now when it comes to the defense side of the house, they use the PIEE System (Procurement Integrated Enterprise Environment). Again, when it comes to using the PIEE System, it's all based on your contract, the amount of money you are to invoice every month. It could be a flat rate, or it could be hourly.

One contract that my flagship company has is based on the number of hours that my employees work. So every single month, the dollar amount varies. There are times where my flagship company sold products to Maxwell Air Force Base, it was a flat rate. You must follow the instructions.

It's also very important, especially with this system, if the line item says admin 7852, you should put that in your invoice, and you want the line items to match what you have in the invoice. And again, you're going to need to ask, “Hey, I just want to find out do you have any preferences for the invoice? Here's the invoice that I want to submit. Here's what it looks like. Do you want me to notify you? Do you want me to send an email?”

By the way, that actually happened with one of my clients from my flagship company where they notified my team and said that they wanted an email every single time an invoice is submitted because there are times where a week will go by and they aren't notified that they have invoices to process in the PIEE System.?

Because again, they have jobs and responsibilities. They're focusing on the mission, not on processing this small business's invoice. You, the small business owner, must advocate for yourself. That's why it's important to ask permission, ask questions, and nurture the client's relationship. You want to work with them, not against them.

Also, keep in mind that his system is very sensitive to names. Normally when you are uploading an invoice, you can't have dots or dashes or spaces or long invoice names. It's also important in this system, as well as in IPP, to upload your invoice as a PDF. Fortunately, if you're using QuickBooks, you can easily convert your invoice to a PDF format.

As for attachments in PIEE, it's best to upload each one individually. You're also going to need to check all of the codes. There have been times where the codes don't work. That's the situation my flagship company has faced before. The codes that were listed in the contract don't match the PIEE System, and therefore an invoice. Thankfully, my team became aware of that by following the steps, and they worked with a client to come up with a remedy.

There may be times, especially in terms of a contract close out, where an agency will ask you for all of the invoices you submitted. And what's beautiful about these two systems, all of the information is there. In IPP, you can pull a report that shows all this information at once. And in PIEE, you have a breakdown of everything that you've been paid for.

Also, I want to add, at least in the PIEE System, if you have multiple businesses that you own that are in SAM.gov you can log in with one username and password and access all of your businesses. There will be a drop down and you can choose, which is really cool, because it's a pain to have multiple logins and things of that nature. It's much, much easier to have everything connected to one.

Security Measures

PIEE security, in my opinion, is stricter than IPP.?

So there are times it may be 30 to 90 days in which PIEE will send an email warning, you must log in, you must change your password. If you do not, your account will be locked. And then they proceed to send you an email every day until that time table has come to an end.?

A big thing to keep in mind is removing access for people who are no longer on your team. Even if you've disabled their company email, you should manually remove their access to these platforms.?

If needed, contact the platforms directly to ensure removal. These security measures are a must because billions of dollars are paid to government contractors annually, making these systems targets for fraud. That's why SAM.gov and other platforms have stricter security measures.

Invoice Best Practices

Also, in terms of your invoices, you want to make sure that you have the information as it appears in the actual contract, the client's name, all of the different contact information, the address, etc. to match what is in your invoice.?

You don't have to go out and spend a ton of money on an accounting subscription. I would say at least try out QuickBooks. I love QuickBooks. I have many QuickBooks Accounts. That's just my preference. Because everything looks very professional, you can brand it.

Also, we restate our banking information at the bottom of every invoice. This practice came from a lesson learned. Once, our banking information was changed in SAM.gov due to switching banks. The government paid the old bank account.?

Fortunately, it all worked out, but to prevent this from happening again, we now include our current bank account and routing number on every invoice.

Hopefully, this advice is helpful for you! If you would like more tips on how you can become a GovCon Winner, then subscribe to my official YouTube channel now.?

Click here today to subscribe to my YouTube channel.?

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I’m the author of the newly released book “The GovCon Winners Way: How To Win Government Contracts Faster Than Trying to Do It Alone!” At 28, I was awarded my first 5-figure federal government contract. I own and operate multiple government contracting businesses and have over $50 million in federal government contract awards. Today, I’ve helped my students win over $3M in Federal Government Contracts in less than 6 months, and I’ll help you, too!?

-#EverythingIsPossible