32.609
Delays in receipt of notices or demands
If the Government delays sending a demand letter for contract debt, the interest start date must be adjusted to ensure fairness to the contractor.
Overview
FAR 32.609 addresses situations where the Government delays the delivery of a demand letter related to contract debts, which can affect when interest on the debt begins to accrue. If the Government is responsible for an undue delay—such as holding the letter at the originating office or delays in mailing—the date from which interest accrues must be adjusted. The regulation requires that the accrual of interest be extended to a date that is fair and reasonable, considering the specific circumstances of the delay. This ensures that contractors are not unfairly penalized with additional interest due to government-caused delays in notification.
Key Rules
- Interest Accrual Adjustment
- If the Government delays delivery of a demand letter, the start date for interest accrual on the debt must be adjusted to a fair and reasonable date.
- Fair and Reasonable Standard
- The extension of the interest accrual date should reflect what is fair and reasonable under the particular circumstances of the delay.
Responsibilities
- Contracting Officers: Must ensure that interest accrual dates are adjusted if government-caused delays in delivering demand letters occur.
- Contractors: Should review interest charges and notify the contracting officer if they believe a delay in notification has occurred.
- Agencies: Must monitor and document the timing of demand letter issuance and delivery to ensure compliance.
Practical Implications
- This section protects contractors from being charged excess interest due to government administrative delays.
- Contractors should keep records of when demand letters are received and compare them to the date on the letter.
- Disputes may arise if there is disagreement over what constitutes a fair and reasonable extension, so clear documentation is important.