32.1101
Statutory requirements
All federal contract payments must be made via Electronic Funds Transfer (EFT) in accordance with statutory and Treasury regulations.
Overview
FAR 32.1101 establishes the statutory requirement that all contract payments by the federal government must be made using Electronic Funds Transfer (EFT), as mandated by 31 U.S.C. 3332 and implemented through Treasury regulations at 31 CFR Part 208. This requirement applies to nearly all federal contract payments, ensuring secure, efficient, and timely disbursement of funds. The regulation is designed to reduce fraud, minimize administrative costs, and streamline payment processes for both agencies and contractors.
Key Rules
- Mandatory Use of EFT
- All contract payments must be made via Electronic Funds Transfer unless an exception applies under Treasury regulations.
- Treasury Regulations Apply
- The specifics of EFT implementation are governed by the Secretary of the Treasury’s regulations at 31 CFR Part 208.
Responsibilities
- Contracting Officers: Must ensure contract payment provisions comply with EFT requirements and inform contractors of EFT obligations.
- Contractors: Must provide accurate EFT information and be prepared to receive payments electronically.
- Agencies: Must follow Treasury regulations for EFT and ensure payment systems are compliant.
Practical Implications
- This section exists to modernize and secure federal payment processes.
- Contractors must be prepared to receive payments electronically and ensure their banking information is accurate and up to date.
- Failure to comply with EFT requirements can delay payments or result in noncompliance issues.