32.1103
Applicability
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.