32.1103 Applicability
Source: FAR 32.1103 on acquisition.gov
EFT is the standard for government contract payments, but specific exceptions allow alternative payment methods under defined circumstances.
Overview
FAR 32.1103 outlines when the Government must use Electronic Funds Transfer (EFT) for contract payments and specifies exceptions where EFT is not required or feasible. The default requirement is that all contract payments are made via EFT, unless certain conditions apply, such as technical inability, payments outside the U.S. and Puerto Rico, payments in foreign currency, security concerns, emergency or military operations, infrequent payments, urgent agency needs, sole source situations, or other Treasury-authorized exceptions. This section ensures clarity on when alternative payment methods are permissible, helping both contracting officers and contractors understand when EFT is mandatory and when exceptions may be invoked.
Key Rules
- EFT as Default Payment Method
- All contract payments must be made via EFT unless a listed exception applies.
- Exceptions to EFT Requirement
- Exceptions include technical issues, foreign payments, security concerns, emergency operations, infrequent payments, urgent needs, sole source situations, or Treasury-authorized cases.
Responsibilities
- Contracting Officers: Must ensure EFT is used unless a valid exception applies and document the rationale for any exception.
- Contractors: Should expect EFT payments unless notified otherwise and provide necessary EFT information.
- Agencies: Must comply with Treasury regulations and ensure exceptions are properly justified and documented.
Practical Implications
- This section exists to promote efficient, secure, and standardized payments via EFT, reducing fraud and administrative costs.
- Contractors should be prepared for EFT as the norm but be aware of legitimate exceptions.
- Common issues include misunderstanding when exceptions apply or failing to document the justification for non-EFT payments.
The Government shall provide all contract payments through EFT except if-
(a) The office making payment under a contract that requires payment by EFT, loses the ability to release payment by EFT. To the extent authorized by 31 CFR Part 208, the payment office shall make necessary payments pursuant to paragraph (a)(2) of the clause at either 52.232-33 or 52.232-34 until such time as it can make EFT payments;
(b) The payment is to be received by or on behalf of the contractor outside the United States and Puerto Rico (but see 32.1106(b));
(c) A contract is paid in other than United States currency (but see 32.1106(b));
(d) Payment by EFT under a classified contract could compromise the safeguarding of classified information or national security, or arrangements for appropriate EFT payments would be impractical due to security considerations;
(e) A contract is awarded by a deployed contracting officer in the course of military operations, including, but not limited to, contingency operations as defined in 2.101, or a contract is awarded by any contracting officer in the conduct of emergency operations, such as responses to natural disasters or national or civil emergencies, if-
(1) EFT is not known to be possible; or
(2) EFT payment would not support the objectives of the operation;
(f) The agency does not expect to make more than one payment to the same recipient within a one-year period;
(g) An agency’s need for supplies and services is of such unusual and compelling urgency that the Government would be seriously injured unless payment is made by a method other than EFT;
(h) There is only one source for supplies and services and the Government would be seriously injured unless payment is made by a method other than EFT; or
(i) Otherwise authorized by Department of the Treasury Regulations at 31 CFR Part 208.