32.607-2
Deferment of collection
Contractors must submit a detailed written request and comply with strict requirements to obtain a deferment of debt collection, even when a dispute is pending.
Overview
FAR 32.607-2 outlines the procedures and requirements for contractors to request a deferment of collection on debts owed to the government. The regulation specifies the information that must be included in a written request, the responsibilities of the contracting officer, and the necessary contents of any deferment agreement. It also addresses special considerations for contractors who have appealed the debt under the Disputes clause, as well as protections for small businesses and financially weak contractors. The section ensures that government interests are protected while providing a structured process for contractors facing financial hardship.
Key Rules
- Written Request for Deferment
- Contractors must submit a written request for deferment to the contracting officer, including detailed financial information unless an appeal is pending.
- Disputes Clause Considerations
- Filing an appeal does not suspend collection, but deferment may be considered to avoid overcollections.
- Contracting Officer Actions
- The contracting officer must notify the payment office, review the request, and forward recommendations and supporting documentation to the designated agency office.
- Deferment Agreement Requirements
- Agreements must include specific terms such as debt description, payment office, interest charges, access to records, and provisions for termination upon default or insolvency.
- Special Provisions for Appeals and Small Businesses
- Deferments may be granted to small businesses or financially weak contractors, and agreements must require diligent prosecution of appeals and payment upon resolution.
Responsibilities
- Contracting Officers: Review and process deferment requests, notify payment offices, and forward recommendations and documentation.
- Contractors: Submit complete written requests with required information, comply with deferment agreement terms, and prosecute appeals diligently if applicable.
- Agencies: Designate decision-making offices, authorize deferments, and ensure agreements protect government interests.
Practical Implications
- This section provides a clear process for contractors to seek relief from immediate debt collection, especially during financial hardship or pending disputes.
- It balances contractor needs with government protections, requiring thorough documentation and enforceable agreements.
- Common pitfalls include incomplete requests, failure to provide required information, or misunderstanding that appeals do not automatically halt collections.