Payments by the Centers for Disease Control and Prevention to Vaccine Manufacturers and Suppliers

We found that CDC generally paid invoices for vaccines in a timely manner and calculated and paid required interest on late payments. Of the 179,129 invoices that CDC paid from April 2005 through August 2006, 172,566 (more than 96 percent) were paid within the required period. For the 6,563 remaining invoices, which were not paid within the required period, CDC paid appropriate interest or did not owe interest on 4,895 invoices but had not paid interest totaling approximately $1 million on 1,668 invoices as of August 31, 2006. In the absence of other contractual provisions, an agency generally must pay a proper invoice within 30 days of the later of the receipt of the invoice or the receipt of the supplies. If an invoice is not paid timely, the agency incurs interest from the day after the payment was due until the payment is made.

In addition, we determined that CDC had paid 46 invoices twice, resulting in duplicate payments totaling $2 million.

We recommended that CDC (1) pay $1.7 million in interest due one vendor; (2) recover $687,000 in duplicate payments (net of interest due) from four vendors; and (3) consider reviewing all replacement paper invoices paid after August 31, 2006, to identify any unpaid interest or duplicate payments. CDC disagreed with our findings and recommendations. In response to CDC's comments, we reviewed additional documentation and found that CDC had recovered some of the duplicate payments noted in our draft report. We reduced the number and dollar value of duplicate payments reported in our final report accordingly. We maintain that our findings and recommendations, as revised, are valid.