32.603
Debt determination
Contracting officers must promptly and accurately determine contractor debts to protect government funds and ensure timely recovery.
Overview
FAR 32.603 outlines the responsibilities of contracting officers when there is an indication that a contractor may owe money to the Government under a contract. The regulation requires prompt action to determine whether a debt exists and, if so, the precise amount owed. Delays in making this determination can negatively impact the Government by reducing the availability of funds, making debt collection more difficult, or causing actual financial loss. The amount of debt determined must be justified by the facts of the case and must align with the terms of the contract.
Key Rules
- Prompt Debt Determination
- Contracting officers must act quickly to assess if a contractor owes money and determine the amount owed to the Government.
- Avoiding Delays
- Unnecessary delays in debt determination can result in loss of funds, collection difficulties, or monetary loss for the Government.
- Basis for Debt Amount
- The debt amount must be based on the merits of the case and consistent with contract terms.
Responsibilities
- Contracting Officers: Must promptly investigate and determine the existence and amount of any contractor debt, ensuring the determination is fact-based and contractually justified.
- Contractors: Should be prepared to provide information or documentation if a debt is suspected or identified.
- Agencies: Should oversee and support timely debt determination and collection processes.
Practical Implications
- This section exists to protect Government funds and ensure timely recovery of debts.
- It impacts daily contracting by requiring vigilance and swift action when potential debts are identified.
- Common pitfalls include delays in investigation, insufficient documentation, or failure to align debt amounts with contract terms.