Responsibilities
Contracting officers identify and demand contract debts, while payment offices handle collection and liquidation, ensuring proper separation of duties.
Overview
FAR 32.602 outlines the division of responsibilities between contracting officers and payment offices regarding the identification, collection, and liquidation of contract debts. The section clarifies that contracting officers are responsible for identifying and demanding payment of contract debts, except for those arising from payment office errors. However, contracting officers are not authorized to collect or liquidate these debts themselves. Instead, the payment office is tasked with collecting debts identified by contracting officers, identifying and collecting duplicate or erroneous payments, and authorizing the liquidation of contract debts according to agency procedures. This clear separation of duties helps ensure proper internal controls and accountability in the management of contract debts.
Key Rules
- Contracting Officer's Role
- Responsible for identifying and demanding payment of contract debts, except those due to payment office errors.
- Prohibition on Collection by Contracting Officers
- Contracting officers must not collect or liquidate contract debts themselves, including through offsets or allowing retention for future payments.
- Payment Office's Role
- Responsible for collecting contract debts, identifying and collecting duplicate/erroneous payments, and authorizing liquidation of debts per agency procedures.
Responsibilities
- Contracting Officers: Identify and demand payment of contract debts; do not collect or liquidate debts.
- Contractors: Respond to demands for payment and coordinate with payment offices as required.
- Agencies/Payment Offices: Collect debts, identify payment errors, and manage liquidation of debts per procedures.
Practical Implications
- Ensures clear separation of duties to prevent conflicts of interest and maintain financial controls.
- Contractors should expect to interact with both contracting officers (for debt identification) and payment offices (for payment and liquidation).
- Missteps in following these roles can lead to compliance issues or improper handling of government funds.