13.402
Conditions for use
Fast payment procedures can only be used for eligible, lower-value supply purchases in challenging delivery environments, provided strict oversight and supplier accountability measures are in place.
Overview
FAR 13.402 outlines the specific conditions under which the fast payment procedure may be used for government purchases. This procedure allows for expedited payment to suppliers before formal Government acceptance, provided certain safeguards and criteria are met. The regulation is designed to facilitate timely procurement in situations where standard payment processes are impractical due to logistical or communication challenges.
Key Rules
- Dollar Threshold
- Fast payment procedures may be used for individual purchasing instruments not exceeding $45,000, unless a higher limit is authorized by an executive agency for specific cases.
- Delivery Location and Communication
- Supplies must be delivered to locations where there is both geographical separation and inadequate communication between receiving and disbursing activities, making timely payment based on acceptance evidence impractical.
- Transfer of Title
- Title to supplies passes to the Government upon delivery to a post office or common carrier, or upon Government receipt if shipped by other means.
- Supplier Obligations
- Suppliers must agree to replace, repair, or correct supplies that are not received, are damaged in transit, or do not meet purchase requirements.
- Contract Type
- Only firm-fixed-price contracts, purchase orders, or delivery orders for supplies are eligible.
- Oversight Systems
- Agencies must have systems to document contractor performance, provide timely feedback on deficiencies, and identify suppliers with a history of abusing the procedure.
Responsibilities
- Contracting Officers: Ensure all conditions are met before using fast payment procedures and monitor supplier performance.
- Contractors: Comply with replacement/repair obligations and deliver supplies as specified.
- Agencies: Maintain oversight systems and authorize exceptions to dollar thresholds as appropriate.
Practical Implications
This section enables faster payments in challenging logistical environments, reducing administrative delays. Contractors benefit from quicker payments but must meet strict performance and replacement requirements. Agencies must balance speed with oversight to prevent abuse and ensure supply chain integrity.