1.1.
The ACO shall aggressively pursue voluntary refunds from contractors.
A voluntary refund is a payment or credit (adjustment under one or more
contracts or subcontracts) to the Government from a contractor or
subcontractor that is not required by any contractual or other legal
obligation.
(DFARS 242.71) A
voluntary refund may be solicited (requested by the Government) or
unsolicited. Generally, the Government may request voluntary
refunds only after
determining that no contractual remedy is readily available to recover the
amount sought and acceptance of unsolicited refunds does not
prejudice remedies otherwise available to the Government (PGI
242.7100). The final
approval authority for
solicitation of voluntary refunds is theHead of the Contracting Activity (Executive Director,
Contracts).
1.2.
Before soliciting a voluntary refund, or accepting an
unsolicited one, the ACO shall
assess the full impact of the refund, including obtaining and considering financial,
technical, property, and other
advice, as required by the
specific situation. The
ACO shall prepare and submit a written memorandum, with the rationale for
soliciting or accepting a refund,
for legal counsel to:
confirm
there are no readily available contractual remedies; and
obtain advice as
to whether the proposed action would jeopardize or impair the
Government's rights. (PGI
242.7100)
1.3. The ACO shall request
voluntary refunds only when concluding that retention
of the amount in question by the contractor or subcontractor would be
contrary to good conscience and equity.
(PGI 242.7100). One or more of the
following conditions must be met before the ACO requests a voluntary refund:
contractor overcharged under a contract,
or
contractor inadequately compensated the
Government for the use of Government-owned property, or
contractor inadequately compensated the
Government in the disposition of contractor inventory
1.4. The ACO may solicit voluntary
refunds during or after contract performance. (PGI
242.7100)
2.1. A contract
modification, rather than a check, is the preferred means of effecting a
solicited or unsolicited refund transacted before final payment.
(PGI 242.7100)
2.2. When refunds are offered prior to final
contract payment, the ACO shall reflect a credit to the contract by issuing
a modification to reduce the contract price, target price, or estimated
cost. The ACO shalldeobligate the funds after consulting with the buying command.
2.3.
If the voluntary refund is a check, the ACO shall advise the contractor
to
make the check payable to the agency that awarded the contract (PGI 242.7100). Upon receipt of a refund check, the ACO shall prepare a cash collection voucher,
DD Form 1131
, forsubmission to the payment office, or in the event of a subcontract, to the ACO for the prime contract. The ACO
shall submit a copy of the check and a letter identifying the voluntary refund
with the contract number, and, where possible, the appropriation and account
number to be credited, to the PCO.
