13.402
Conditions for use
Fast payment procedures can only be used when specific conditions are met, including dollar limits, delivery challenges, contract type, and supplier accountability.
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 $35,000, unless a higher limit is authorized by the agency for specific cases.
- Delivery Location Requirements
- 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 carrier or upon Government receipt, depending on the shipping method.
- Supplier Obligations
- Suppliers must agree to replace, repair, or correct supplies that are lost, damaged, or nonconforming.
- Eligible Contract Types
- 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 abuse.
Responsibilities
- Contracting Officers: Ensure all six conditions are met before using fast payment procedures and maintain oversight systems.
- Contractors: Agree to replacement/repair obligations and comply with delivery and performance documentation requirements.
- Agencies: Authorize exceptions to dollar limits, maintain oversight systems, and monitor supplier performance.
Practical Implications
- This section enables faster payments in remote or logistically challenging locations, reducing procurement delays.
- Contractors benefit from quicker payments but must be prepared to address any supply issues promptly.
- Agencies must balance speed with adequate controls to prevent abuse or payment for nonconforming goods.