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How Does the Payment Process Work For Federal Contracts and Grants Secured Through SAM?


The payment process for federal contracts and grants secured through the System for Award Management (SAM) can vary depending on the specific terms and conditions of the contract or grant agreement, as well as the federal agency involved. However, there are common elements and procedures that apply to many federal payments. Here’s an overview of how the payment process typically works:

  1. Award Notification:
    • Once a business or organization has successfully secured a federal contract or grant through SAM, they will receive an official award notification from the federal agency. This notification outlines the terms, conditions, and payment details of the award.
  2. Payment Terms and Conditions:
    • The award notification specifies the payment terms and conditions, including the payment schedule, method of payment (e.g., electronic funds transfer, check), and any specific invoicing requirements.
  3. Invoicing:
    • In most cases, the recipient of the federal award (contractor or grantee) is responsible for submitting invoices for goods delivered or services rendered. Invoices must comply with the terms and requirements set forth in the award agreement.
  4. Invoice Submission:
    • Invoices are typically submitted to the designated payment office or point of contact specified in the award agreement. SAM registration ensures that the business or organization’s payment details are accurate and up-to-date.
  5. Invoice Review:
    • The federal agency reviews the submitted invoices to ensure they are accurate, complete, and compliant with the terms of the award. This may include verifying that the products or services have been delivered satisfactorily.
  6. Payment Processing:
    • Once the agency approves the invoice, it initiates the payment process. Payments are typically made electronically through the Automated Clearing House (ACH) system or by paper check, depending on the terms of the award.
  7. Payment Schedule:
    • The payment schedule varies based on the contract or grant agreement. Some awards may provide for advance payments, while others may be paid based on milestones, deliverables, or reimbursement of eligible expenses.
  8. Recordkeeping:
    • Both the federal agency and the recipient are required to maintain accurate records of all financial transactions related to the award. This includes invoices, payment receipts, and any other financial documentation.
  9. Reporting and Compliance:
    • Recipients of federal awards are often required to submit regular financial reports, performance reports, or progress reports to demonstrate compliance with the terms of the award.
  10. Auditing and Monitoring:
    • Federal agencies may conduct audits or monitoring activities to ensure that payments are made and used in accordance with applicable regulations and the terms of the award.
  11. Payment Disputes:
    • If there are disputes or issues related to payments, the recipient can work with the federal agency’s designated point of contact to resolve them through established dispute resolution procedures.
  12. Closeout:
    • At the conclusion of the award period, the federal agency and the recipient will go through a closeout process, which includes finalizing all financial transactions, reporting, and any necessary adjustments.

It’s important for businesses and organizations that secure federal contracts or grants through SAM to carefully review the terms and payment conditions outlined in the award agreement. Understanding and following the payment procedures and compliance requirements is essential to ensure that payments are processed smoothly and in accordance with federal regulations.

Additionally, businesses may need to consider cash flow management and budgeting to accommodate the payment schedule outlined in the award agreement, especially for larger or long-term federal contracts and grants.


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Contact the FPR Help Desk through the following methods:

  • Phone: 1-866-717-5267 (toll-free)
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