32.007 Contract financing payments
Source: FAR 32.007 on acquisition.gov
Contract financing payments are generally due within 30 days of a proper request, but no interest is paid for late payments and strict compliance with submission requirements is essential.
Overview
FAR 32.007 establishes the rules and timelines for making contract financing payments, such as progress payments or advance payments, to contractors. It sets a standard due date of 30 days after the designated billing office receives a proper contract financing request, unless agency policies specify otherwise or a shorter period is justified. The section also clarifies exceptions, such as when audits are required, and outlines requirements for proper submission and annotation of financing requests. Importantly, it states that interest penalties do not apply to delayed contract financing payments.
Key Rules
- Payment Due Date
- Payments are generally due within 30 days of receipt of a proper contract financing request, unless agency policy or contract terms specify otherwise.
- Audit Exception
- If an audit or review is needed, payment may be delayed beyond the standard due date.
- Agency Discretion on Payment Periods
- Agency heads can set shorter payment periods (not less than 7 days), but never longer than 30 days.
- Advance Payments and Loans
- For non-recurrent requests (like advance payments), payment is made per contract terms or as directed by the contracting officer.
- Proper Requests and Corrections
- Requests must comply with contract terms; defects must be corrected as directed.
- Date Annotation
- Both billing and payment offices must annotate the date each request is received.
- No Interest Penalties
- No interest is paid for late contract financing payments.
Responsibilities
- Contracting Officers: Ensure contract terms specify financing request requirements and direct corrections as needed.
- Contractors: Submit proper financing requests and correct any defects as directed.
- Agencies: Set payment periods within allowed limits, annotate receipt dates, and ensure compliance with audit requirements.
Practical Implications
- This section ensures timely contract financing payments while allowing flexibility for audits and agency-specific needs. Contractors must pay close attention to submission requirements and deadlines, as improper requests or delays in correction can impact payment timing. Agencies must balance prompt payment with necessary oversight, and contractors should not expect interest for late financing payments.
(a)
(1) Unless otherwise prescribed in agency policies and procedures or otherwise specified in paragraph (b) of this section, the due date for making contract financing payments by the designated payment office is the 30th day after the designated billing office receives a proper contract financing request.
(2) If an audit or other review of a specific financing request is required to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the specified due date.
(3) Agency heads may prescribe shorter periods for payment based on contract pricing or administrative considerations. For example, a shorter period may be justified by an agency if the nature and extent of contract financing arrangements are integrated with agency contract pricing policies.
(4) Agency heads must not prescribe a period shorter than 7 days or longer than 30 days.
(b) For advance payments, loans, or other arrangements that do not involve recurrent submission of contract financing requests, the designated payment office will make payment in accordance with the applicable contract financing terms or as directed by the contracting officer.
(c) A proper contract financing request must comply with the terms and conditions specified by the contract. The contractor must correct any defects in requests submitted in the manner specified in the contract or as directed by the contracting officer.
(d) The designated billing office and designated payment office must annotate each contract financing request with the date their respective offices received the request.
(e) The Government will not pay an interest penalty to the contractor as a result of delayed contract financing payments.