Claims for Payment

A claim for payment is a structured submission in which a supplier or contractor formally requests money owed under a contract. It is not a casual reminder or a bare invoice. It gives the responsible authority enough information to verify entitlement, certify the account and issue payment within set time limits.

In Canadian federal procurement, the expression appears most often in connection with progress payments, milestone payments and invoice processing. Contractors submit claims on standard government forms, such as PWGSC-TPSGC 1111, Claim for Progress Payment, so that Public Services and Procurement Canada (PSPC) or the client department can certify the work and arrange payment. The term is also used in health-benefit programs, where a claim is a filing that lets the administrator determine whether benefits are due and in what amount. This page focuses on the procurement meaning.

What the Standard Acquisition Clauses require in a claim

The Standard Acquisition Clauses and Conditions (SACC) manual makes an accurate and complete claim for payment a condition of progress and milestone payments. The contractor must submit the claim on form PWGSC-TPSGC 1111, Claim for Progress Payment, along with any other document the contract requires. The clauses are set out in the SACC manual on CanadaBuys.

Each claim must be completed in full, including a brief report of work progress. For milestone payments, it must also show the description and value of the milestone claimed. Contracting officers can require supporting documents where the contract calls for them, such as:

• time sheets
• invoices for non-consumable items
• travel and living expense vouchers
• monthly progress reports

PSPC publishes the form itself on its claim for progress payment page.

How a claim moves from contractor to payment

The CanadaBuys buyer's guide on claims, progress payments and invoicing describes the routing. Contractors normally send invoices directly to the client, with a copy to the procurement officer for the file. Claims for progress payments are normally routed through the procurement officer to the client for verification and authorization. Each must include the completed claim form named in the contract, which requires certification of contract expenditures.

The same guide sets the processing standard: claims for payment are to be processed within 30 days after invoicing or receipt of goods, whichever is later. Erroneous or incomplete invoices must be returned to the contractor within 15 days for resubmission. No payment other than a progress payment may be made unless a person authorized by the appropriate minister certifies that the work was performed, the goods supplied or the services rendered, and that the price charged is according to the contract or is reasonable.

Inside government, the Treasury Board's Manage Procure to Payment process shows what happens next. Account verification is performed under section 34 of the Financial Administration Act, a request for payment is prepared for financial services, and payment authority is exercised under section 33. The Receiver General then issues the payment.

Claims for payment compared with invoices

An invoice is a commercial document. A claim for payment in the public procurement sense is a more formal instrument that can include or reference invoices but follows government forms, routing and certification. The CanadaBuys guidance also addresses delivery: an invoice that bills for undelivered items is not due until all items are received. A contractor seeking payment for a partial shipment must invoice only the items delivered, in line with the contract conditions.

Financial claims: extra payment, overpayments and audits

CanadaBuys guidance on financial claims covers a wider use of the word. Contractors can make claims for extra payment, for example in firm price contracts where Canada caused changes. Canada can also raise claims, such as overpayments or overclaims found through audit, and disputes can arise from termination or bankruptcy.

Recovery and settlement of these adjustments is possible only where the contract contains clauses allowing for audit and recovery. The Assurance Services Group prepares notification reports that outline proposed adjustments to claims for payment, excess profit, accounting practices or internal controls.

What it means for a supplier bidding on Canadian public contracts

Read the payment clauses before you price and plan cash flow. If the contract provides progress or milestone payments, you will need to submit accurate and complete claims on the form it names, with the supporting documents it lists. Build the time sheets, vouchers and progress reports into your project routine so each claim is ready when a milestone closes. Send invoices to the client with a copy to the procurement officer, bill only for what has been delivered, and keep records that would hold up in an audit.